Just a matter of days after Worcester Warriors were forced into administration to try and find a solution to their mountain of debt, Wasps have also been plunged into chaos as a genuine crisis engulfs top-tier rugby union in England.
The six-time Premiership Rugby champions have been left with no choice but to follow Worcester into administration, and some 167 staff – including players and coaches – have effectively been made redundant.
They are now free agents that are allowed to join a new club after Premiership chiefs decided to suspend Wasps from all domestic competitions, while taking the step of relegation means that both Wasps and Worcester will automatically be relegated into the Championship next season.
It reveals the depth of the financial back hole that top-tier clubs have effectively brought on themselves – albeit not aided by the health crisis on 2020, which saw them lose millions in ticket sales and matchday revenue.
However, a recent report found that nearly all top-flight clubs are spending more on player wages than they are generating in revenue, and the former Harlequins chief executive Mark Evans has described English rugby as a ‘broken business model’.
Wasps continued to sign and keep marquee players despite the fact they were losing money season after season following their controversial move to Coventry, which saw them drop the ‘London’ moniker from their name. They paid around £20 million for the Ricoh Arena, despite the fact their average attendance was around 15,000 – less than half of the stadium’s capacity.
The overall picture in the Premiership is so bleak that the government is reportedly ready to step in – for better or worse. Chiefs from the Premiership and the Rugby Football Union (RFU) will be hauled in front of the Digital, Culture, Media and Sport committee to explain how things have gone so badly wrong.
Let’s just hope they don’t hand over their budget to Liz Truss….
Could Central Contracts Be the Answer?
In cricket, the best talents in England are effectively employed by the ECB (English Cricket Board), and then loaned out to their respective counties when the international schedule allows.
It means that the cash-poor county teams don’t have to pay their wages, but still benefit from their talents on the rare occasions when they are allowed to play.
It’s a system which could benefit rugby too, and it’s believed that both the Premiership and the RFU are open to such a concept being introduced.
Bill Sweeney, the head of the RFU, has confirmed that either full or partially-funded central contracts could be on the table as part of a major overhaul of domestic rugby.
An alternative option is to increase the fees that are paid to those who represent England, which currently stand at £25,000 per game. If that stipend was increased, international players would be more inclined to negotiate ‘cheaper’ salaries at their club sides.
Eddie Jones, England’s head coach, has revealed that he believes central contracts will be introduced, while former international flanker James Haskell has stated his belief that the Premiership should have ‘everything centrally contracted, almost like an NFL model’ to avoid financial armageddon.