Premiership Rugby club finances are ‘clearly unsustainable’, a damning parliamentary report has concluded.
The Digital, Culture, Media and Sport (DCMS) Select Committee report said the recent disappearance of Wasps and Worcester Warriors puts a “stain on the reputation” of sports authorities.
The committee heard from rugby personalities after the two clubs took office in the fall.
MP Damian Green has said elite club rugby “is in disarray”.
Green, who is acting chairman of the committee, added: “The inert leadership of the Rugby Football Union [RFU] and Premiership Rugby [PRL] allowed mismanagement to bring down two of England’s top rugby teams.
“Thousands of loyal fans have been deprived of their clubs and hundreds of jobs have been lost.”
The committee was told annual losses averaged £4m per Premiership club and their report highlighted a “lack of safeguards” at the highest level.
A joint statement from the RFU and PRL in response to the report says the organizations are “working hard” to “create a sustainable league”.
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The DCMS committee added that “the unscrupulous owners of the Worcester Warriors mismanaged the club’s finances while attempting to strip the club of its assets”, and that they had gone more than a year without filing accounts, the players being paid late for several months.
The committee said “one of the most salient facets of Worcester Warriors’ problems was the lack of corporate due diligence of its owners, particularly Colin Goldring”.
Last May, club co-owner Goldring was banned from working in the legal profession without permission from the Solicitors Regulation Authority.
“It was apparently not enough for the Rugby Football Union (RFU) to intervene and end Mr Goldring’s ownership of Worcester Warriors,” the DCMS committee added.
At that time, the club released a statement saying: “All regulators have expressed to Goldring that they are satisfied that he is fit and suitable to own and run a sports club.”
Goldring, who was a trainee attorney at the time the incident took place, said at the time he had been cleared of “any allegations of dishonesty or lack of integrity”.
In response to the DCMS report, which Goldring said he had not seen, he denied the asset stripping allegations.
Goldring added that the committee “lost the opportunity to have a constructive assessment of what really drove the Warriors into administration and, in doing so, to understand and address the challenges that others still face.” club”.
RFU and Premiership Rugby reputations ‘sullied’ – report
Meanwhile, the committee said Wasps had been experiencing mounting problems for several years, linked to debt from what it called a “disastrous and ill-thought-out move to Coventry”.
The report concluded that the two clubs’ ‘debacle’ could have been avoided with ‘better governance structures, financial monitoring and proactive intervention by the RFU and PRL’.
While Green welcomed the planned reforms, including a “new and more comprehensive” test for owners and directors, he said “the root of the problem remains”.
RFU chief executive Bill Sweeney and PRL chief executive Simon Massie-Taylor spoke about their ambitions to increase rugby revenue for English national clubs.
However, these did not appear to allay the concerns of the committee, who said they had seen ‘preciously little evidence’ that increased collaboration between PRL, RFU and other key stakeholders would significantly increase revenue. .
“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 revenue will solve these problems,” the report said.
“The disappearance during the playing season of two Premiership clubs is a stain on the reputation of the RFU and the PRL. It is not indicative of a healthy professional setup.”
Once its annual report was published, the RFU was asked to provide “a detailed commentary on its financial situation and the measures it will take to prevent new clubs from collapsing, with consequent damage to players, staff and local communities”.
A “lack of attention” to the welfare of Worcester Warriors and Wasps players was another area criticized by the committee.
The report states “the introduction of a form of benevolent fund [is] a pressing need” and recommended that the RFU adopt measures “to give players a greater say in all matters relating to their well-being”.
The RFU and PRL said player welfare “is a top priority” and added that plans are in place for a financial oversight committee which would include a third-party financial review of all clubs.
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