London Welsh will go into liquidation after the chairman admitted the club’s business model is “totally unsustainable”.
The Daily Telegraph reports that the 145-year-old club, who are currently plying their trade in the Championship, were given until December 12 to pay £250,000 to England’s Revenues & Customs but they have already conceded defeat.
London Welsh now hope to reform as a semi-professional side in 2017, playing at their current Old Deer Park ground.
“London Welsh has reached a difficult point in its illustrious history,” chairman Gareth Hawkins said.
“Due to a playing budget of £1.7m and gates at games numbering as low 400, the club’s current business model is totally unsustainable.
“The debts accrued from trading in this way have left the club with no alternative but to seek liquidation. Having to break that news to 40 staff members yesterday was extremely difficult. All creditors of London Welsh Rugby Club will be contacted by the liquidator.
“In the New Year, it is the hope and intention of the board that London Welsh will be able to return to playing at Old Deer Park, however it will first be necessary to change the club’s business model to a semi-professional set-up and form a new company, and then raise £300,000 so that the Club can regain a position within the Championship.
“Richmond have proved that a club can compete in the Championship with a semi-pro model, and I firmly believe we can make this work in 2017.”
The club, who were relegated from the Premiership at the end of the 2014/15 season, will receive a points deduction from the Rugby Football Union if it goes in to administration. Earlier this year, Plymouth Albion were docked 30 points after they went in to administration and a similar punishment would be catastrophic for London Welsh as it would leave them at risk of being relegated to the National One competition.
Liquidation will allow them to re-form the club, should it be able to keep its famous name, at the bottom of the English rugby ladder.