Premiership Rugby

Worcester Warriors On Verge Of Administration

Worcester Warriors On Verge Of Administration

The Worcester Warriors are teetering on the edge of oblivion after reports Saturday indicated the club soon may enter administration.

Aug 23, 2022 by RugbyPass
Worcester Warriors On Verge Of Administration

The Worcester Warriors are teetering on the edge of oblivion after reports Saturday indicated the club soon may enter administration.

The news comes a week after the Premiership side was given a winding-up petition by HM Revenue & Customs for an unpaid tax bill. 

The club claimed a Time-to-Pay arrangement already was in place between them and HMRC, but now that the situation has been made public, added pressure to swiftly resolve the financial matter has arisen.

However, it now seems the lump sum will not be repaid, with the Times reporting the Premiership club has asked the Department for Digital, Culture, Media & Sport if they can enter administration.

This step must be taken, as the club received a taxpayer bailout during the COVID-19 pandemic to the tune of around £14 million. Other top-flight clubs received similar financial assistance, but the Warriors were in need of the most propping up and, therefore, were the biggest beneficiaries.

If the Warriors enter administration, not only would the club's future be placed in certain jeopardy, so too would the repayment of that £14 million taxpayer loan.

In an official club statement, Worcester Warriors attributed their financial downturn to the challenges brought about by the pandemic and the developing cost-of-living crisis.

Notwithstanding, the club owners and board have assured fans they are committed to keeping the Warriors in the Premiership for the foreseeable future.

"A solution, which would secure the long-term future of the club, has been approved. Unfortunately, there have been unavoidable delays beyond the club's control to the final tasks required to complete the funding," the statement said. "Having kept HMRC fully apprised of the situation, we are disappointed that they have taken the decision to issue a winding-up petition. The club's directors are in continuing dialogue with HMRC in an attempt to find a speedy and satisfactory resolution."

Even if the club enters administration, majority owners Jason Whittingham and Colin Goldring plan on devising a way to keep the turnstiles open.

They received a boost in delivering this aim, after RugbyPass revealed the RFU would be doubling the money administered to its top clubs this season. This means around £20 million will be divvied up between the 13 Premiership sides, with those possessing more players in the England squad set to receive more funding.

The money will be welcomed, but in truth it will not be nearly enough to prevent the Worcester's current financial trajectory.

Marcello Cossali-Francis, the sports editor of Worcester News, made this crystal clear when giving a bleak Twitter update on the untenable position the club finds itself in.

"So, it sounds very much as if the club will go into administration, likely to be public knowledge on Monday morning.

"I believe we've hit a point where there is serious unrest as the club and a real worry about the future of it. There are people within the club who no longer are on side with the owners, and there is a big worry for staff over their jobs."

One option available to the ownership is for them to sell the club and its debt. This would quickly rectify the problem but requires an investor to overlook the financial downturn the club is experiencing.

The job of selling has been made even harder, with the owners allegedly refusing to part ways with the land surrounding Sixways Stadium. Instead, it is alleged that Whittingham and Goldring wish to only sell the stadium.

In the eyes of sports journalist Chris Jones, there is absolutely no chance a sale goes through unless the surrounding land is included in the deal.

"The Worcester Warriors scenario is simple; If the owners put the club up for sale without the surrounding land (which would be attractive as a distribution hub/nhs site etc.), there's no chance of survival," he wrote on Twitter. "With the land, there's a fighting chance of new owners."

Cossali-Francis came to similar conclusions, foreseeing no chance of a sale if all the land is not on offer.

"There remains concern about the fact Warriors the club and the land are now separate businesses. Makes it tricky for a buyer if that's the case.

"What needs to happen now is a full sale of all assets to ensure the club does not go bust. But what buyer would take the club and not the land?

"And the tax bill is big. It's a real mess folks."

Inevitably, with so much uncertainty surrounding the club, the futures of their star players remain up in the air.

Fans will hope that Warriors captain Ted Hill, fly-half Fin Smith, the England capped Ollie Lawrence and Scotland international Duhan van de Merwe will be among those that stay loyal.

However, Cossali-Francis has reported that the disruption brewing in the building means numerous players may ask to leave the club, regardless of the financial end result.

"Players need stability for their families and can't be sat wondering where the next pay packet is coming from," he said. "Ahead of the new season, this is so damaging."

To make matters worse, Worcester Director of Rugby coach Steve Diamond has told the Times his players could look for new clubs if their salaries are not paid within 10 days as a result of the club entering administration.

And, in addition, according to the Telegraph, the Premiership may remove salary cap restrictions to allow for other teams to bring in Worcester players.

As of now, no new owners have come to light, though Cossali-Francis assumes Diamond could lead a consortium of individuals in buying the club. 

For now, the fans and all those involved with the club, remain clueless as to what the future holds.  

Written by Stefan Frost