'Lack of safeguards': Premiership clubs warned over 'unsustainable' finances
NEWS: English Premiership clubs have been warned that their financial situation is “clearly unsustainable” in a damning report on the cash crisis crippling the domestic game.
English top-flight clubs Wasps and Worcester Warriors went into financial meltdown earlier this season in a shocking development that has been labelled a “stain on the reputation” of the Rugby Football Union (RFU) and Premiership Rugby.
With annual losses averaging around £4 million ($4.8 million) per Premiership side, there are fears English club rugby is teetering on the brink of collapse.
Members of Parliament in the Digital, Culture, Media and Sport (DCMS) committee said RFU chief executive Bill Sweeney and his Premiership Rugby counterpart Simon Massie-Taylor held a “very complacent belief” that plans to increase revenues and improve collaboration would solve existing financial problems.
Sweeney and Massie-Taylor appeared in front of the select committee in November after Wasps and Worcester had entered administration, a fate which resulted in both clubs losing their Premiership status amid many job losses.
The committee concluded that poor oversight from Rugby Union’s governing bodies contributed to Wasps and Worcester collapsing.
MPs criticised “a lack of safeguards in place at the highest levels of the game” to help prevent such issues.
“The demise during the playing season of two Premiership clubs is a stain on the reputation of the RFU and PRL. It is not indicative of a healthy professional set-up,” the committee said.
“We welcome the planned reforms to prevent similar occurrences in the future, but such alarming circumstances should not have been required in order for the RFU and PRL to realise the necessity of these reforms.
“The financial situation of Premiership clubs is clearly unsustainable, and we are surprised by the very complacent belief of Bill Sweeney and Simon Massie-Taylor that further growth in club revenues will solve these problems.”