What's next for Wasps?
The club has been suspended from Premiership matches and is on the brink of administration.
Last updated 13th Oct 2022
Financially troubled Wasps have followed the Worcester Warriors in being suspended from the Gallagher Premiership, after announcing their “within days” of administration.
It came after the club announced it was withdrawing from Saturday’s game against the Exeter Chiefs.
Why are Wasps in trouble?
Like Worcester, the Coventry based club has debts that run into the tens of millions of pounds, including a £2 million unpaid tax bill from HMRC.
It also has an outstanding payment to make on a £35 million bond which helped finance the club’s relocation to Coventry eight years ago.
The Wasps Holdings limited filed twice to bring in insolvency experts to help with their debts.
What’s been the reaction?
The fan reaction has been one of sadness over shock.
Chris Wain has been a supporter for over 15 years, writing a rugby blog.
He said: “I think its news that isn’t surprising but to see it in black and white has realised our worst fears.
“The overwhelming feeling, I have is sadness for the good people around the club.”
He said: “If they get the next decision wrong, in terms of the investment, that could be curtains for the clubs”.
What does that mean for the club?
Under Rugby Football Union rules, a club that goes into administration will automatically be relegated in the next season.
The Worcester Warriors has been relegated to the Championship, something which it is appealing.
To avoid this, the RGU says the Wasps much demonstrate the means and commitment to pay its creditors before it reapplies for the suspension to be lifted.
The club's only hope of remaining in the Premiership if they go into administration would rest on them proving a "no fault" solvency event because of the global pandemic.
But Dan Plumley, Senior Lecturer in Sport Finance at Sheffield Hallam, says the problems are not just down to the Covid-19.
Plumley says the problems at Coventry and Worcester “should have seen coming for a long time”
He said: “There has been instances in Rugby union and other team sports when they are loss making entities and they spend beyond their means as well”
What happens next?
The Rugby Football Union (RFU) said on Wednesday it will continue to speak to administrators, potential buyers and Premiership Rugby in order to "find the best possible outcome for the club".
They have been in talks with potential investors, including American tech billionaire John McEvoy who was said to be considering a bid to buy the stadium and its other tenant, Coventry City football club.
Former Newcastle United owner Mike Ashley is understood to be another interested party.
The freehold of the CBS Arena is held by Coventry City Council, who granted Wasps on a 250-year lease when the club bought the stadium's operating company in 2014.
The council has warned that if insolvency problems continue, they will take back the ownership of the ground.