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Author Topic: Wasps facing relegation  (Read 60678 times)

BlackAndGoldSunglasses

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Wasps facing relegation
« on: September 21, 2022, 04:31:43 PM »
Breaking: Wasps face relegation after filing notice in the High Court of their intention to appoint an administrator, as the financial crisis in English club rugby deepens.

https://twitter.com/AlexMLowe/status/1572607938480558080


BlackAndGoldSunglasses

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Re: Wasps facing relegation
« Reply #1 on: September 21, 2022, 04:32:42 PM »
From the article:

Wasps face relegation from the Gallagher Premiership after filing notice in the High Court of their intention to appoint an administrator as the financial crisis in English club rugby deepens.

The club had been due to pay back £35 million in bonds, which helped finance their relocation to Coventry from London in 2014, in May but were unable to meet the deadline.

Wasps had been looking for refinance options but this afternoon issued notice of intention to appoint an administrator.

Under RFU rules, a team that goes into administration faces automatic relegation unless they can demonstrate that the financial crisis was not their fault.

Worcester Warriors are close to being in the same boat. They have debts of £25 million and will be suspended from all competitions unless they can demonstrate “a credible plan to take the club forward” by Monday lunchtime.

Worcester face a winding-up court hearing on October 6, at which HMRC is expected to demand full payment of a £6 million tax bill.

Wasps and the RFU have both been approached for comment.

BlackAndGoldSunglasses

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Re: Wasps facing relegation
« Reply #2 on: September 21, 2022, 04:39:24 PM »
Under RFU rules, a team that goes into administration faces automatic relegation unless they can demonstrate that the financial crisis was not their fault.

As quoted with Worcester, I think we might have to rely on the "pandemic / act of god" clause in the regulations....

If it's as is being reported.

hopwood

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Re: Wasps facing relegation
« Reply #3 on: September 21, 2022, 04:43:11 PM »
If The Times are running this story....which they are...then it seems things are unfortunately coming to a head.

Very sad.
And no idea what the future holds.

Feel for the players and staff, as the uncertainty will be unsettling for them and their families.

baldpaul101

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Re: Wasps facing relegation
« Reply #4 on: September 21, 2022, 04:44:53 PM »
Quote
I think we might have to rely on the "pandemic / act of god" clause in the regulations....

Worth a try, but not sure borrowing £35million and not being able to pay it back really comes under the "Pandemic" heading!

Incredibly sad if true

coddy

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Re: Wasps facing relegation
« Reply #5 on: September 21, 2022, 04:48:33 PM »
This is very sad news, what was Dallaglio talking about last week that Wasps were imminently about to announce good news on their finances!

NellyWellyWaspy

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Re: Wasps facing relegation
« Reply #6 on: September 21, 2022, 04:51:37 PM »
That would trigger the clause in the bonds that the bondholders then fall back on their equity, which is the stadium, yes? I think some of the government debt is similarly secured. Now we know why the shenanigans as to who owns the training ground and the separate academy house might have taken place.

As I have said before, a potential buyer would want to avoid/offload much of the debt and will likely not want to buy until it went in to administration.

One thing you can be sure of, Wasps will have had long discussion with the Premiership about what doing this would precipitate. Wasps directors are doing the right thing given their financial situation. Worcester directors should have done the same already.

I have little doubt other clubs are working towards the same end. The Premiership could face a situation of half the league going in to administration and being relegated. They may be forced almost to trigger the 'Covid' clause and levy a points penalty only. If a whole bunch of clubs do the same, BT could well cancel its broadcast contract, and the Premiership cannot afford that.

Sad times, but we have been saying for some time that things look bleak for Premiership Rugby finances.

WonkyWasp

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Re: Wasps facing relegation
« Reply #7 on: September 21, 2022, 04:52:42 PM »
Owh dear.  Can only stick with the Club and hope for the best for it.

NellyWellyWaspy

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Re: Wasps facing relegation
« Reply #8 on: September 21, 2022, 04:53:10 PM »
This is very sad news, what was Dallaglio talking about last week that Wasps were imminently about to announce good news on their finances!

Maybe this IS the good news. Maybe somebody is lined up to buy it at a knock down price from the administrators.

backdoc

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Re: Wasps facing relegation
« Reply #9 on: September 21, 2022, 04:53:57 PM »
Good summary, Nelly. Thanks

Rifleman Harris

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Re: Wasps facing relegation
« Reply #10 on: September 21, 2022, 04:57:47 PM »
This is very sad news, what was Dallaglio talking about last week that Wasps were imminently about to announce good news on their finances!

Maybe this IS the good news. Maybe somebody is lined up to buy it at a knock down price from the administrators.

Possibly, but what would happen to the ground? Would that still go to the bond holders anyway?

DGP Wasp

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Re: Wasps facing relegation
« Reply #11 on: September 21, 2022, 04:58:42 PM »
This is very sad news, what was Dallaglio talking about last week that Wasps were imminently about to announce good news on their finances!

Maybe this IS the good news. Maybe somebody is lined up to buy it at a knock down price from the administrators.

Surely if the bonds are secured against the stadium, then they won't have a fat lot left to buy.  Will we not end up exactly where we were before moving?  No ground of our own, and no assets other than the Wasps name?

NellyWellyWaspy

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Re: Wasps facing relegation
« Reply #12 on: September 21, 2022, 05:10:08 PM »
This is very sad news, what was Dallaglio talking about last week that Wasps were imminently about to announce good news on their finances!

Maybe this IS the good news. Maybe somebody is lined up to buy it at a knock down price from the administrators.

Possibly, but what would happen to the ground? Would that still go to the bond holders anyway?

The ground is complicated, as it is leased, and I suspect that the lease has an insolvency clause (they often do), where the property reverts back to its owners. The lien the bondholders and the government have may only be over the lease, as the freehold belongs to Coventry Council. There might be some clawback to those debtors if the council then sell a new lease.

Nothing will happen too quickly, as that is the point to appointing an administrator. Once appointed, creditors can no longer take action, and all debts go on hold and unpaid, but the administrator can choose to trade on. Typically, a buyer is already lined up, who provides the administrator with a 'going concern' guarantee (to meet costs like power, wages, utilities, and other services/supplies as are absolutely needed). We are not playing at home now until October 9th, so that gives an administrator enough time to sort it out whilst paying the relatively minimal costs of playing away.

Now you see why I was musing before about Wasps and Worcester merging. If the same buyer bought both clubs, and with Premiership permission, could merge them, with Wasps/Worcester playing at Sixways, training at Henley, and leave the CBS Arena for CCFC to play at.

These times will be very worrying for staff, players and fans. And they will learn nothing for a while.

DGP Wasp

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Re: Wasps facing relegation
« Reply #13 on: September 21, 2022, 05:13:00 PM »
Now you see why I was musing before about Wasps and Worcester merging. If the same buyer bought both clubs, and with Premiership permission, could merge them, with Wasps/Worcester playing at Sixways, training at Henley, and leave the CBS Arena for CCFC to play at.

You might not be a million miles away there.

Rossm

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Re: Wasps facing relegation
« Reply #14 on: September 21, 2022, 05:24:36 PM »
SLAVA UKRAINI!
HEROYAM SLAVA!