The 155-year-old Premiership Rugby club Wasps has warned it is likely to enter administration within days, risking becoming the second side to do so in a matter of weeks.
The rugby union side pulled out of a league match scheduled for Saturday as it fights to survive. It said it was “confident” of finding new owners to save the group and its rugby and netball teams.
But the sports governing body, the Rugby Football Union, said on Wednesday that Wasps had been suspended from the league.
Coventry-based Wasps has struggled financially after losing out on revenues because of the pandemic and becoming more indebted.
Wasps Holdings made a net loss of £7.4mn on revenues of £13mn in 2021, following a net loss of £11.1mn on revenues of £21mn in 2020.
Rugby teams were left particularly exposed when Covid restrictions prevented live crowds at games because they are more reliant on ticket sales than football teams, which command billions of pounds in broadcast income.
The UK government provided £88mn in loans to Premiership Rugby clubs in March 2021 under a so-called Sport Survival Package.
Wasps, the two-time European champions, would be the second rugby union side in little over two weeks to enter administration, following Worcester Warriors.
Negotiations to save Wasps’ teams are ongoing, the club said, though it has so far been unable to obtain bridge financing from investors to avoid administration.
Wasps and Worcester are among the 12 members of Premiership Rugby, the highest level of the union game in England. However, their financial struggles have plunged the game into crisis.
The RFU, the sports governing body, suspended Worcester after the club failed to provide evidence of insurance cover, funds to meet monthly payroll, and a “credible plan” to take the club forward.
The body said of the latest club’s difficulties on Wednesday: “We appreciate this is a very difficult time for Wasps players, staff and supporters who will be concerned at news that the club is likely to enter administration. The RFU will continue to work with the club, PRL and any potential administrator or future investors to find the best possible outcome for the club.”
Wasps, which once claimed to generate more revenue than any rugby club in Europe, raised £35mn through a retail bond issue in 2015. The bonds were due to be repaid in May. The UK government is also a creditor.
“While the companies within the group all represent strong and viable businesses, the reality is that they have insufficient cash at this time to continue to fund operations until these complex negotiations have concluded,” Wasps said.
CVC Capital Partners has owned a 27 per cent stake in Premiership Rugby, the top tier of English club rugby union, since a deal in 2018, with clubs holding the remaining shares.
Wasps last won the Premiership in 2008.
