Wasps facing relegation

[Shugs]

Club rugby has to be
self-financing (from funds generated within the game), it cannot be funded at the whim of very wealthy people. There needs to be a re-balancing, but you suspect that even if that happens some clubs may try and play the system.

Which is all well and good, but when a club tries to do exactly that and is shut down for 2 years because of a pandemic they are pilloried for not having £100M in the bank.

The more I think about that the more it seems insane that the “non cause clause” can’t be satisfied. The cash from govt was just loans so really just a bridging device. Diversifying income streams rather than being dependent on an individual is where all teams should try and get to. We did and, as you say, have suffered for it. Not that I imagine anyone with a semblance of power in the game will reflect on that - those funding their playthings with huge sacks of cash have too much influence for that to happen.

Isn't that too simplistic.
Given the business model was reliant on cash generation to pay back/refinance all the money borrowed, you'd have to display that prior to covid, the model was in fact sound. The fact that financials markets have contracted due to economic pressure, I'm not sure that is a sellable narrative.
I believe covid fckd us in the shorter term..but I do wonder where the refinancing would have come from in the current climate regardless.

Yes, completely fair point. Unfortunately the initial debt was too high. In terms of the clause it will depend on what the authorities really want to do. If they want a 10 team league it will be lip service. If they want “an out” to keep it at 12-13 they’ll accept it.

[Andywasp50]

Mulling this over this morning, I can’t help thinking a lot of this could have been somewhat mitigated by a football transfer system. How much time, money and resources have we dedicated to bringing through academy stars and got absolutely nothing in return when they leave.

Football clubs consider it part of their business model to sell such players to balance the books. We’ve got nothing for the likes of Billy V, Daly, Cipriani etc. We’ve developed some superstars and had no return on investment. Imagine right now if we were able to sell Jack Willis and pay HMRC? Not great, he’d be missed and I know the finances are a lot more complex that that, but surely it would make more sense. It would also ensure bigger clubs were more inclusive in order to increase the development of new talent.

I think that does exist in rugby... Just to a much lesser extent due to the economies involved in the game


In football, those with the money and the need will buy a player out of their contract. The transfer fee is whatever the 2 clubs agree on to negate the existing contract


In rugby, the same could happen, and I believe there have been a couple of examples a few years ago.
There was something funky involved when Johnny May moved mid contract.
I think there was also something with George North at one point.
And I also remember a prop at Saints, I think, who had to be bought out of a contract


However, as most clubs haven't got any money, and we have a salary cap it's incredibly rare.




Also, given the minimal financial awards for winning the league or domestic cup competition in rugby, who would pay a significant sum of money for an additional player?

I can think of a certain club that would find a way to do it (and get away with it)..

[NellyWellyWaspy]

Club rugby has to be
self-financing (from funds generated within the game), it cannot be funded at the whim of very wealthy people. There needs to be a re-balancing, but you suspect that even if that happens some clubs may try and play the system.

Which is all well and good, but when a club tries to do exactly that and is shut down for 2 years because of a pandemic they are pilloried for not having £100M in the bank.

The more I think about that the more it seems insane that the “non cause clause” can’t be satisfied. The cash from govt was just loans so really just a bridging device. Diversifying income streams rather than being dependent on an individual is where all teams should try and get to. We did and, as you say, have suffered for it. Not that I imagine anyone with a semblance of power in the game will reflect on that - those funding their playthings with huge sacks of cash have too much influence for that to happen.

Isn't that too simplistic.
Given the business model was reliant on cash generation to pay back/refinance all the money borrowed, you'd have to display that prior to covid, the model was in fact sound. The fact that financials markets have contracted due to economic pressure, I'm not sure that is a sellable narrative.
I believe covid fckd us in the shorter term..but I do wonder where the refinancing would have come from in the current climate regardless.

Yes, completely fair point. Unfortunately the initial debt was too high. In terms of the clause it will depend on what the authorities really want to do. If they want a 10 team league it will be lip service. If they want “an out” to keep it at 12-13 they’ll accept it.

If they DO accept it and let Worcester and Wasps stay, after going through pain and punishment and a long drawn out process to make sure the other teams get to ransack the squads, they will then face an onslaught from the other sides that are so desperate to dump their debt. It will not look good to the outside world. In a position of their own making they are, but the RFU lose both ways. If they do force Wasps and Worcester to lose their squads and do relegate them, it will signal a long and tragic end to the way English Rugby is currently organised.

[Shugs]

Well we’re actively headed to that scenario already. Reform has to follow this whatever happens. It’s a fine balance for the other teams. Take your point about the other teams jettisoning their debt but they also need a competitive and interesting league. It would feel a bit uncomfortable if we were allowed to do it - even though it’s legal. In the round ball game Leicester did a similar thing and some years later won the title - pisses on the chips of those that manage their finances carefully.

[mike909]

If they DO accept it and let Worcester and Wasps stay, after going through pain and punishment and a long drawn out process to make sure the other teams get to ransack the squads, they will then face an onslaught from the other sides that are so desperate to dump their debt. It will not look good to the outside world. In a position of their own making they are, but the RFU lose both ways. If they do force Wasps and Worcester to lose their squads and do relegate them, it will signal a long and tragic end to the way English Rugby is currently organised.

So are we suggesting that unless reality is faced up to, English rugby is either going to have a big problem in the short term if it tries to make the impossible work, or a long decline that ends up at the same place?

I'm not for one moment suggesting that I have an idea of what needs to happen, but is does seem that Wales, Scotland and Ireland faced up to their reality - financially - and at least have a plan/strategy. Whereas it seems that England thought itself "beyond all that" and didn't need to have a grip of club finances. (Might have phrased that poorly) as the pro game was in "rude health" - at least in their minds....

[wasps]

If you're centrally funded by the RFU, how much better for the game is that?


You're still not a financially viable business, and you lose a lot of the autonomy of your own club so that an organisation can cover some of your costs and move your best players to other cou be a if they feel it necessary. How much better is that really than an individual businessman who may actually have an affinity for the club?




My fear is financial issues on top of potential law suits for concussions etc. and repeated tinkering with the laws starts to see the game actually shrink rather than grow.
In 10 years we could really be discussing the end of the game, rather than the end of some clubs

[Shugs]

If they DO accept it and let Worcester and Wasps stay, after going through pain and punishment and a long drawn out process to make sure the other teams get to ransack the squads, they will then face an onslaught from the other sides that are so desperate to dump their debt. It will not look good to the outside world. In a position of their own making they are, but the RFU lose both ways. If they do force Wasps and Worcester to lose their squads and do relegate them, it will signal a long and tragic end to the way English Rugby is currently organised.

So are we suggesting that unless reality is faced up to, English rugby is either going to have a big problem in the short term if it tries to make the impossible work, or a long decline that ends up at the same place?

I'm not for one moment suggesting that I have an idea of what needs to happen, but is does seem that Wales, Scotland and Ireland faced up to their reality - financially - and at least have a plan/strategy. Whereas it seems that England thought itself "beyond all that" and didn't need to have a grip of club finances. (Might have phrased that poorly) as the pro game was in "rude health" - at least in their minds....

Bang on.

[Hymenoptera]

If they DO accept it and let Worcester and Wasps stay, after going through pain and punishment and a long drawn out process to make sure the other teams get to ransack the squads, they will then face an onslaught from the other sides that are so desperate to dump their debt. It will not look good to the outside world. In a position of their own making they are, but the RFU lose both ways. If they do force Wasps and Worcester to lose their squads and do relegate them, it will signal a long and tragic end to the way English Rugby is currently organised.

So are we suggesting that unless reality is faced up to, English rugby is either going to have a big problem in the short term if it tries to make the impossible work, or a long decline that ends up at the same place?

I'm not for one moment suggesting that I have an idea of what needs to happen, but is does seem that Wales, Scotland and Ireland faced up to their reality - financially - and at least have a plan/strategy. Whereas it seems that England thought itself "beyond all that" and didn't need to have a grip of club finances. (Might have phrased that poorly) as the pro game was in "rude health" - at least in their minds....

Bang on.

So..PRL will have a decision to make (if we &/or Worc got backing), whether it's viable for the long term futre of the game to remove 2 clubs from and existing pool that on the face of it, could go from 11 to 9 or even 8 at the drop of a hat if the media are correct. I hope that they play the numbers game and choose to retain more given the risk of loving more so as to actually maintain some sort of league at all...at this rate, they might have to join the URC...can you imagine that!
It's all hope and guesswork at this point.

[bigad82]

There's an awful lot of poacher turned gamekeeper about to happen.
I can think of 3 clubs.

[Sussex Wasp]

I'm just gutted. Been flagging this for years with our incredible £10m annual losses since 2014, been shot down every time. Gives me no pleasure to say it's been coming a long time.
I'm not sure if we are still banned from saying anything negative abut Wasps, but if I am banned it doesn't matter now anyway.
My point is I am amazed no-one here is angry with the useless incompetant Wasps board who has presided over this debacle, Eastwood Vaughan and Richardson in particular.
They have watched the disaster unfurl. £60M losses in 6 years. Waited until we hit the buffers and screwed the bond holders and loyal suppliers, with no plan B in 7 years of clear sight Coventry did and could not work.
Lied to people - quote Richardson recent statement
https://www.coventrytelegraph.net/sport/rugby/wasps-owner-derek-richardson-breaks-24747475
So 160 years of history thrown under the bus. Yes we were going under in 2014, but all we have done is extend the pain whilst ruining our reputation with the financial community and rugby community, and taken money from good people with false promises - virtually nothing in the 2014 bond prospectus came to fruition
I was interested to see what hey had to say tonight, but the Wasps website is down
It's not over, possible we can rise but not with the current 3 bids I am aware of. All three want the stadium and not the  rugby club, even Armstrongs backers are venture capitalists who will be out for a fast buck
For me if we can find a proper rugby backer soon, who can honour the debts to the bondholders, sell the stadium and retain some staff and players, then get us back to within the M25 or near as hell, we can get back into premiership rugby with a future. And an 18,000 capacity stadium

Apart from disagreeing with almost every word you wrote...a couple of things.
Your claiming foresight of which almost every rugby support already knows, they all run at huge losses, so you're foresight isn't unique as much as you claim it to be.
I am not sure we'd be here if Covid hadn't gutted our financial model for 2 years, not just in in-flow but decemated in out-flow..
Related to the taking money from good people - purchasing a staggering 6.5% return bond is no different to buying ultra high risk stocks. If you know anything about finance, you'll know what I am saying.

Agreed 100%. I don't think the statement is lying that the businesses are viable in the long-term.

This is the man who boldly stated Lima Sopoaga would be Wasps all time great player. Always gets it right like this new one.

[Sussex Wasp]

Let’s be clear - there’s still a huge amount to happen here. We don’t know if we’ll be relegated or lose our P share. Once the emphasis shifted from financing the debt to seeking a takeover that was always going to happen in administration. People with the sort of money to buy the level of assets in the mix don’t get that much of it by spaffing it up the wall on a regular basis when they don’t have to. So now we’ll see if any of them are serious. There’s a huge mix of alternatives with Wasps the rugby entity not being of standout appeal but we don’t know. There is a huge amount to happen in this yet.

On the other site we call this gent the Dark Knight. Just a flesh wound this is.

[Shugs]

Happy to debate with you Kent. So, do you think there is not lots to happen then? There’s a huge amount. I didn’t say it would all be positive - just that lots has to be decided. In the history of the club it may be a flesh wound. It may be fatal. You don’t know and neither do I. But it’s always easier just to predict failure - especially in sport - as invariably you’ll be right more than you are wrong.

[JWasp]

If the court session is on Monday, would we expect announcement of a deal before then?

[NellyWellyWaspy]

If the court session is on Monday, would we expect announcement of a deal before then?

No. A deal can only be 'made' after the Court appoints an Administrator. It can be prepared before then. It may already be prepared. It is preferable to have the deal prepared, agreed and ready to sign before the Court hearing.

[Vespula Vulgaris]

Sussex Wasp, I'm not sure what you're trying to achieve by making personal digs at people.

A lot of people are hurting right now, if you want to start an online fight about it I am not the person, and this is not the place.