Just now in the Times:
Why London Irish 'need a miracle' to avoid collapse
Exiles on the brink of being third Premiership club to go out of business this season
Will Kelleher, Alex Lowe
Monday May 22 2023, 9.45pm, The Times
London Irish are on the brink of collapse. The RFU has set the club a hard deadline of May 30 to prove their viability for next season or be suspended from the English league pyramid.
One of two things must happen by next Tuesday if London Irish, who do not own their stadium and are saddled with ?30 million of debt, are to be saved:
● a proposed takeover by an American consortium, which has been in discussion since last October, is completed and approved by the RFU;
● the present owners of the club demonstrate they will continue to fund London Irish through the 2023-24 season.
Fail and London Irish will become the third professional club this season to collapse, after Worcester Warriors and Wasps.
Will London Irish survive?
Not one senior official in the English game has any confidence that the takeover will amount to anything. The consortium has missed multiple deadlines set by the RFU to provide key documentation, including proof of funds.
The RFU must approve any takeover and the union first requested information from the prospective owners five months ago.
It has emerged in recent days that the consortium is headed up by Alfred 'Chip' Sloan, an American former sports agent who previously expressed an interest in buying Saracens but did not close the deal. A group of former NBA and NFL players are part of the consortium?s leadership team.
One industry source said that the deal should have been thrown out on day one if the consortium was unable to demonstrate its funds, business plan and investors from the outset.
It is understood that the RFU has been frustrated by a series of unfulfilled commitments from the consortium, including statements that payments had been sent when they had not.
The consortium has insisted that there will be 'big progress' in the coming days but was unable to provide any evidence to support its 'great positivity'.
Regarding the second demand, there is a widespread expectation that Mick Crossan, who owns London Irish via his company, Powerday, will not be prepared to continue bankrolling the club.
The average losses of a Gallagher Premiership club each year are ?4 million. London Irish do not have the facility to generate income outside match days because they do not own a stadium.
In March, Crossan had to find emergency funds to cover the club?s monthly wage bill of ?500,000. The April salaries were paid a week late, minutes before the players were due to hand in breach-of-contract letters.
The most likely situation now is that Irish are suspended next Tuesday and drop out of the league, meaning the Premiership becomes a ten-team division a year earlier than planned.
'We need a miracle, one source said.
'I think it?s game over,' added another.
What happens after May 30?
The prospective buyers must state to the RFU in the next few days who the owners of the club would be, so that an external agency can complete a due diligence check before the May 30 deadline passes.
If the deadline is not met, London Irish will be suspended from the Premiership and could drop into administration, with the players permitted to leave. The club themselves, or one of their creditors, can place them into administration, not the RFU.
Player and staff salaries are due on May 31. If the wages are not paid and the club are still a going concern, players would have to submit breach-of-contract letters to be able to leave. That would give the club 14 days to come up with the money before players can walk away.
However, the players have been in discussions with the Rugby Players Association (RPA) trying to clarify whether they could leave immediately after the club are suspended. Matt Rogerson, the club captain, has been leading the discussions with club executives and the RPA.
The Times revealed that players have been lining up moves elsewhere for a number of weeks. It is understood that some of Irish?s England internationals have a 'respectable queue of quality employers' ready to sign them; others have secured provisional moves to France.
Could London Irish return if they are bought out after the deadline?
If this situation follows the Wasps blueprint from October, the collapse of the club could be brutally quick. Wasps entered administration and made 167 people redundant on the same day.
With other Premiership squads tight and the salary cap reduced to ?5 million, from ?6.4 million, there will be little room for a swathe of London Irish players in the league.
One idea is that the surviving ten Premiership clubs could be given dispensation to sign Irish players and afforded extra salary cap space. A benevolent fund could also be set up for unemployed players.
London Irish can be bought out from administration. If that happens, they would not be eligible for the 2023-24 season in any league.
Always a Wasp