Wasps facing relegation

[hopwood]

Well, if FRP and the Board etc front up at training tomorrow....that's a healthy sign that something good might still evolve.
At least they are showing their faces.

[Bloke in North Dorset]

In America, which gets a lot of press as this route is most often used, they call it Chapter 11 Bankruptcy, but over there it can last for years. A lot of big businesses, like car makers and airlines, have used this method to gain some breathing space. A new owner,

It became such a problem with some of the airlines that the joke was that they were going in to Chapter 33.

[jamestaylor002]

Thanks everyone for helping me understand - I'm not well versed in this area!

So, these 14 days are massive. Yes, it's good to see Wasps don't appear to be hitting the panic button but I'll take this with a huge pinch of salt due to the statements that have come out in the past.

I agree with everyone about the state of rugby. All clubs will struggle unless you have a moneybags behind you (Bristol, Bath, Saracens).

[BrackenandMacken]

Thanks everyone for helping me understand - I'm not well versed in this area!

So, these 14 days are massive. Yes, it's good to see Wasps don't appear to be hitting the panic button but I'll take this with a huge pinch of salt due to the statements that have come out in the past.

I agree with everyone about the state of rugby. All clubs will struggle unless you have a moneybags behind you (Bristol, Bath, Saracens).

Just to confirm, whilst we haven't hit the panic button we have hit the only button that was available to us.

Unfortunately if you look at the cash flow that the Wasps group generates currently the only way the club gets out of the financial mess its in is through a new owner who can write off £35m of debt like Nigel Wray did at Saracens. Until that occurs, we are a rugby club at the mercy of it's creditors.

[wasps]

If you were a rich potential owner, why would you write off £35m+ ?


Presumably you'd only do that if you had an affinity for the club.
So, the next question would be "where were you ~10 years ago?"




I worry that there isn't a rich benefactor with enough love for Wasps to write off that kind of debt

[NellyWellyWaspy]

I am with Jamestaylor on this. In business is this an acceptable practice, or are we kicking the can down the road?

AIUI, not only is acceptable practice from what we understand it is prudent and best practice.

True.

But.

Who is going to lend money to Wasps? Nobody in their right minds. I do not believe any financial institution would dump over £50m (which is what is needed, and probably then some) in to a black hole, with no hope of repayment (and, let's face it, there would be no hope of repayment).

So, I look to the statements made, including that email. 'Refinancing package'. Not loan, investment or bonds or anything indicating a traditional injection of funds from a financial institution seeking to make a financial gain on capital investment made.

All refinancing package means is, it is one sum of money to consolidate and pay off a number of debts and loans. Refinancing does not indicate the source of funds, nor what will be given in return. Any money given will, in my opinion, be lost, so whatever is given in return must be non-financial. Ownership maybe? It is a poisoned chalice (because any owner would likely have to inject more funds in to the future).

Rather like buying a pint of beer. I don't need to, I don't really gain from buying it, but I want to. I get the warm glow that you get from meeting a desire. Granted, £50+m is a bit more than a fiver, but that rather depends on who you are.

We all know Derek has loved and worked hard for Wasps, cost him a lot of money. But, all things come to an end at some point.

Cecil Duckworth isn't in charge at Warriors either, yet look what he did for them.

[BrackenandMacken]

If you were a rich potential owner, why would you write off £35m+ ?


Presumably you'd only do that if you had an affinity for the club.
So, the next question would be "where were you ~10 years ago?

I worry that there isn't a rich benefactor with enough love for Wasps to write off that kind of debt"

You do get a stadium in return for that £35m+, but your point is exactly the problem, there doesn't appear to be a person that meets the criteria of obscenely rich and loves Wasps rugby club.

It's a league of rich mens toys and you either have an ultra wealthy benefactor or you don't.

[Vespula Vulgaris]

I guess the fundamental question is: are Wasps good for the £35M?

And to answer that we need to know whatvthe current situation is (we don't) and what the future business plan looks like.

We have no idea what projections there are, and so all we can do is speculate.

Pre covid, did people think Wasps were good for the bond based on assets and future business projections? The answer is clearly yes.

And so could we not be good for it given time in a post covid world?

I'd say possibly.

And so there may well be a financial institution or investment group willing to provide funds up front to clear the immediate problem.

Which only leaves the question how many people's souls have to be sold to secure it?

I guess we'll see.

[Shugs]

I think it’s right that this was the only option given the HMRC pending action. It’s the right thing for Directors to have done. I think this is shaping up more like a takeover than a loan etc. One things for sure we’ll know the outcome very soon as it has to play out in the next 20 days or so.

[NellyWellyWaspy]

If you were a rich potential owner, why would you write off £35m+ ?


Presumably you'd only do that if you had an affinity for the club.
So, the next question would be "where were you ~10 years ago?"




I worry that there isn't a rich benefactor with enough love for Wasps to write off that kind of debt

9 years ago a man named Jim Ratcliffe had been busy buying up petro chemical facilities that the big companies, like ICI and BP, were trying to get out of, and he was hugely in debt as a result. Reportedly hundreds of millions. He paid that debt off, but it took him a few years. Around 2015 he started to make headway and started to make substantial positive cashflow. Now, he is estimated to have a personal wealth of £20+bn. Right now, with the current crisis, he is making as much as £50m a week.

He is known to be able to buy Man Utd with petty cash, if the Glazers were willing to sell (they are not). He is, as they say 'in the market'. Is he a rugby fan? I do not know. He attended Beverley Grammar School and most likely would have played rugby there.

He sponsors a cycling team. He owns two football clubs. He has a willingness to invest in sport.

[wasps]

The other thing is that someone interested in premiership football ownership can afford to run a rugby club without blinking.


A high number of premiership footballers earn more than £100k per week.
That £100k per week is essentially the entire annual salary cap for a rugby club.

[Shugs]

Could well be a pre cursor to a takeover - no idea what that field of people looks like. Think we need to hold tight on the doomsday scenario predictions - if you read between the lines on what are more reliable sources there are some nuggets of hope in there.

[BrackenandMacken]

The other thing is that someone interested in premiership football ownership can afford to run a rugby club without blinking.


A high number of premiership footballers earn more than £100k per week.
That £100k per week is essentially the entire annual salary cap for a rugby club.

If SISU weren't an absolute nightmare to deal with I imagine the potential of owning Wasps and CCFC would be appealing to certain people.

You get a premier league level ground, an area with fantastic footballing academy talent, you get to split the running costs with the rugby club and you would do away with al ot of the bad blood between the two clubs.

If only!

[Vespula Vulgaris]

The other thing is that someone interested in premiership football ownership can afford to run a rugby club without blinking.


A high number of premiership footballers earn more than £100k per week.
That £100k per week is essentially the entire annual salary cap for a rugby club.

If SISU weren't an absolute nightmare to deal with I imagine the potential of owning Wasps and CCFC would be appealing to certain people.

You get a premier league level ground, an area with fantastic footballing academy talent, you get to split the running costs with the rugby club and you would do away with al ot of the bad blood between the two clubs.

If only!

That would be my days as a Wasps fan finished.

[Raggs]

The other thing is that someone interested in premiership football ownership can afford to run a rugby club without blinking.


A high number of premiership footballers earn more than £100k per week.
That £100k per week is essentially the entire annual salary cap for a rugby club.

If SISU weren't an absolute nightmare to deal with I imagine the potential of owning Wasps and CCFC would be appealing to certain people.

You get a premier league level ground, an area with fantastic footballing academy talent, you get to split the running costs with the rugby club and you would do away with al ot of the bad blood between the two clubs.

If only!

That would be my days as a Wasps fan finished.

Any owner, or SISU?

I'd certainly not be against a joint owner, but wouldn't fancy SISU. However CCFC is up for sale I believe, so a joint owner coming in could be beneficial.