Government at odds with Premiership rugby clubs over ?150million Covid-19 loans... as some seek deferrals ahead of first repayment date
Mail Sport has learned first payments on loans are due to be made imminently
Some Premiership clubs are seeking to put back the first repayment date
The Government want to impose tougher terms on clubs with rich owners
By Matt Hughes
Published: 14:01, 27 March 2024 | Updated: 21:14, 27 March 2024
The government are at loggerheads with Premiership rugby clubs over their attempts to secure deferrals on the repayment of over ?150million of Covid-19 loans.
Mail Sport has learned that the first tranche of payments on loans given to keep professional rugby alive during the pandemic are due imminently, with some clubs seeking to put back the repayment date.
The government are understood to have indicated a willingness to extend the loans in returning for securing a longer repayment period, but want reassurances that the clubs have sustainable business plans and are not simply seeking to put off meeting their financial obligations to taxpayers.
It is understood that there is some frustration in government that having provided loans at low interest rates with a lengthy repayment period some clubs are looking to alter the terms at the first opportunity.
Mail Sport has been told that the Department for Culture, Media and Sport want to impose tougher terms on clubs with the richest owners.
Premiership rugby are attempting to secure deferrals on the repayment of Covid-19 loans
Premiership rugby are attempting to secure deferrals on the repayment of Covid-19 loans
All the clubs owe different amounts to the government, but Premiership Rugby Limited are adamant they should all be treated equally and that the wealth of individual owners is irrelevant given the sport?s salary cap restrictions.
Rugby?s financial problems have worsened considerably since the pandemic with Wasps, Worcester and London Irish all going out of business over the last 18 months to leave the Premiership with just 10 clubs. While all of the clubs have been involved in talks with government only a handful have formally requested an extension.
The problem of four fewer league games each season and reduced ticket and hospitality revenue has been compounded by a drop in value of Premiership rugby?s TV deal with TNT Sports, who as Mail Sport revealed last month have agreed a two-year extension on reduced terms.
In talks with government PRL are understood to have pointed out that in addition to the important community work provided by the clubs they also contributed significantly to the national economy, paying around ?80m in tax each year.
The clubs? negotiating position with government has not been helped by the controversial decision to increase their individual salary cap from ?5m to ?6.4m next season as it has created the impression that some clubs have money to spare, although the PRL are hopeful that they can convince their members to reduce the cap again the following season.
Rugby?s financial problems have worsened since the pandemic with Wasps, Worcester and London Irish all going out of business over the last 18 months
The government?s position is being reinforced by the fact that the clubs are one-third owned by CVC Capital Partners, a private equity firm who are preparing to float on the Amsterdam stock market with a valuation of ?12billion, so there is reluctance for UK taxpayers to further subsidise their investment in rugby.
The insolvencies of Wasp, Worcester and London Irish have already cost the government over ?50m in unpaid taxes and other debts to public bodies.
The clubs? negotiating position with government has not been helped by the controversial decision to increase their individual salary cap from ?5m to ?6.4m next season as it has created the impression that some clubs have money to spare, although the PRL are hopeful that they can convince their members to reduce the cap again the following season.
Always a Wasp
Topic: Government at odds with Premiership rugby clubs over ?150million Covid-19 loans. (Read 1137 times)