Wasps and Worcester Warriors have had their applications of ‘no fault insolvency’ to avoid automatic relegation from the premiership declined.
The applications were made by the administrators for Wasps Holdings Limited and WRFC Trading Limited, respectively, with the Rugby Football Union revealing that both clubs cited the Covid-19 pandemic as the main reason they entered administration.
The RFU concluded that there was not enough evidence that the club was not at fault and that their business plan was not resilient enough to sustain the club.
Meanwhile, with Worcester, the RFU concluded: “a business model which did appear to be perpetually funded by debt”, adding that “the directors of the club had allowed the club to be in such a precarious position that a shock such as Covid, the challenging debt markets or another external event would have created a real and increased likelihood of an insolvency event happening”.
RFU chief executive Bill Sweeney said: “We are all deeply concerned by the insolvency of Worcester Warriors and Wasps rugby clubs.
“We appreciate this decision will be disappointing for the clubs and their fans, but it is clear from the club financial viability group’s investigation that there were factors beyond Covid that resulted in the clubs entering insolvency.
“This has reinforced the need for greater financial transparency between clubs, Premiership Rugby and the RFU to enable both organisations to have better visibility of how these businesses are run.
“We are already working on plans with Premiership Rugby to explore how to improve the structure, governance and business model of rugby union in England and support the clubs in becoming more sustainable.”