The key as to why Wasps and Worcester failed, and more will, is this line:
Clubs are not allowed cash windfalls under the loan terms, but without windfalls many can?t survive.
I would say all, not many, not most, cannot survive without cash injections.
This means that, the owners cannot inject cash (to cover losses), without risking DCMS calling in the loan. I would bet both at Wasps and Worcester the clubs broke that term of the loan, and DCMS called in the entire loan. Rowe has likely wanted to inject cash (I will cover that later) and asked DCMS if he could, without them calling in the loan, to which they said 'No.' You might remember Wasps saying that they had agreed with HMRC new repayment terms (but I bet they though DCMS would be included in that agreement, and they did not), and then DCMS called in the loan (I am guessing that HMRC were their collection agent).
So, in order to keep the loan on the 10 year repayment term, a club would have to run trading at break even or a profit (Rowe claims Chiefs were running at a small profit). For every club, the only way to run at a profit is to cut costs, and shed their most expensive (one might argue, best) players. This is why we are seeing an exodus at some clubs.
DCMS are playing hardball. Pay ALL the loan back, and you can then inject cash to keep or buy in players. Those clubs whose sugar daddies can afford to pay DCMS back in full will do so as soon as DCMS demand the money back as a results of the owner injecting funds. It is likely some have already had to do that.
The other clubs will be cutting their player wages, in effect spending nowhere near the cap. So, you then have a two tier premiership, where some clubs will have a small squad on maybe as little as ?2m a year budget and no marquee players, and some clubs cheating the ?5m cap with abandon.
Remember, the clubs with DCMS loans have to pay back that loan from their operating profits. They cannot use a 'loan' from the owner to meet that annual bill of maybe ?1m or more.
No wonder he is railing. He bought that hotel from the club as a sneaky way to inject funds, but I bet DCMS are saying it is still a cash windfall, as it was not part of normal trading. I wouldn't mind betting they have called in the loan in full. Ouch. That is going to hurt. That's the problem when you stand back and let the weakest be picked off by bullies. Eventually, the bullies turn on you, and when they do, nobody will stand by you. The other less uber wealthy owners are probably panicking right now. The RFU are probably fully aware, and are quietly humming away enjoying their wine, with cheese in their ears. Like in 'Allo 'Allo, where Edith is singing with the pianist, and Ren? says:
He's a very bad pianist, but when my wife sings, nobody notices. The customers stuff cheese in their ears.
This saga has some way to go, but I can see more than a few more clubs going under. No wonder Newcastle want to voluntarily exit the Premiership. Just how many of the clubs have owners that can treat the repayment of that loan as petty cash? CVC might just end up with 30% of nothing.