seems to be in the mainstream media. 

a function of them doing something wonky or are they suffering from something else?

Worcester Warriors have confirmed that they remain in dialogue with HMRC over the threat of a winding-up petition over an unpaid tax bill. BBC Hereford & Worcester say several local businesses are also owed money by the Premiership club. But Warriors say they are on the brink of new funding and have suffered 'unavoidable delays' by health issues. The club said they are "working on solutions to secure the financial future and to pay outstanding tax".

Not just Wuss in trouble

Wasps are in default on their bond and in dispute with CCFC over the state of the pitch.

They have not entered a CVA or administration yet, but.

Is he also known as Shugs by any chance?

Losing 10 mil a year, even before covid, and defaulting on bonds is not a good look. It's difficult to see a way out for them.

City are apparently going to be paying for the pitch, with an arrangement for Wasps to pay it back. Good luck with getting blood out of a stone Joy.

Isn't Exeter's business model based around the Sandy Park complex, which perhaps took a hit during Covid.

Time for Premiership clubs to lose marquee players, cut foreign players and reduce salary cap

I think you'll find they already are. What is really needed is an RFU that knows what it's doing, puts in place proper checks like soccer does and enforces them..........oh and ditch the Gin and Prawn sarnies.

Quite deep

Quite. Dream on though.

Not a chance

It's already bad enough, either scrap the salary cap or up it!.

How far do we want to fall behind?

The plain and simple truth is that clubs are still spending too much money on players and this leads to all their financial problems. Covid is a smokescreen - and for some a godsend as it opened up new financial packages. 

Until clubs - at all levels - realise this, the same thing will keep happening. 

The interesting thing is what happens at the next RFU/Premiership deal. Will the RFU finally stand up to the demands of the clubs and decrease the amount of subsidiaries they give - or will it be another cave in to the detriment of the 'community game'?

£45million according to Google. 

Is that quite deep? It's certainly a lot deeper than mine but you can quickly burn through that with big losses each year. 

What is London Irish's deal with Brentford over the stadium revenue - especially bars - for each game? 

£3.5M (rounded up) loss on last accounts, £5.5 accounts before. 

The Premiership clubs are living in fantasy land.

Wasps need to increase revenue by £500,000 every home game - that is what 25,000 extra fans at £20 a ticket, £25 with VAT.

They cannot give away that many tickets.

That is with the RFu funding them to the tune of several million a year.

Unfortunately, Rugby is a minority sport in England, with 10% of the market at best. The French clubs, play in a larger country where there is less interest in Soccer. So they can get bigger gates and more TV money.

Our clubs are never going to be able to compete on salary with that.

I've understood from speaking to business partners of his he's around the 300m mark. 

They wanted £300,000 a year for the shirt sponsorship he was covering.

I'd imagine a split of bar monies and ticket sales, and not much more then that...

https://www.coventrytelegraph.net/sport/rugby/wasps-reportedly-being-chased-hmrc-24795511" rel="nofollow - https://www.coventrytelegraph.net/sport/rugby/wasps-reportedly-being-chased-hmrc-24795511

As far as I am aware Irish get all monies from ticket sales as they pay a fixed cost for use of stadium. Bar and catering is split unlike deal with Madejski.

The press are rightly stating the Barcelona are mortgaging their future by borrowing money against future sales, but that is precisely what the Premiership and Six Nations have done with CVC, but it is sold as an investment.

They have paid off some debts by selling future income -on the pretence that CVC will help them gain more lucrative TV contracts out of the ether.

They are also putting a value on the Premiership shares, apparently the premiership is worth an extra £60m this season, permitting Wasps to claim £3.7m in profit on their P-shares.

Thus reducing their nominal loss to £6m.

I didn't get past Worcester, the first club I looked at. WRFC Players Limited is a subsidiary of WRFC Trading Limited which is a subsidiary of Worcester Sport Limited which is owned by Bond Group Sixways Limited.  

Which is the one that HMRC have an interest in?

 I have that some of those companies are brand new.......................................less than two months old.

I don't know what you are looking at but Trading and Players registered  in 1996, Sport and BGS in 2018. All have submitted accounts. 

There are other connected companies plus companies no longer live from previous ownerships.

You can't live on capital alone. Not for long, anyway.

I suspect HMRC would give a business a Time to Pay arrangement to see them through short term difficulties. Proceedings such as winding-up would only be considered if the business failed to honour that agreement, or the chances of paying off the debt within a reasonable timescale were not there. Banks are also unlikely to loan money to pay off debts, unless there was the prospect of new money coming into the business.

kingsheathlad wrote: The days when HMRC allowed a time to pay agreement appear to have gone, its a case  of  approach your bank for funds.

WRFC Trading Limited according to https://www.cityam.com/premiership-club-worcester-hit-with-hmrc-winding-up-order-reports-suggest/" rel="nofollow - https://www.cityam.com/premiership-club-worcester-hit-with-hmrc-winding-up-order-reports-suggest/ , which also says that company's accounts are/were overdue.

tigerburnie wrote: Richard Lowther wrote: I was looking at the Companies House site to see how the clubs declared the CVC monies and any Covid related help they received. I didn't get past Worcester, the first club I looked at. WRFC Players Limited is a subsidiary of WRFC Trading Limited which is a subsidiary of Worcester Sport Limited which is owned by Bond Group Sixways Limited.   Which is the one that HMRC have an interest in?  I have that some of those companies are brand new.......................................less than two months old.

From what I read, Worcester had already defaulted for over a year. How much longer should they be granted? Perhaps it is time for them to fall on their sword, or fall to a level that they can sustain until such time as they are ready to climb back up the league.

Companies House.

Eventually, when accounts are filed.

As you say, how long would you be prepared to wait for a debt to be settled. One assumes that over the year the debt was coming down, so one marvels at what it might have been when the agreement was first made. Or it could be they weren't paying new liabilities as they arose, so the overall debt wasn't coming down as fast as HMRC would have expected. Who knows.

 

Bet nothing happens before the season starts, at which point a points deduction etc etc is applied but as no relegation what will happen? I suspect we won’t see a London Welsh (although justified), could a two season penalty be applied?

Makes a mess of the whole salary cap and of the league if 1 or even 2 premiership sides go bust this season....

Reading this does not look good. Looks like the directors might be asset stripping before administration by the fact their other companies are now magically buying up Worcester's money making assets like the car park.

Exactly my thoughts when I read the piece in the BBC just now. Strip the income-generating assets, increase the rent to the Rugby Club, force it into administration, pay creditors a small proportion of what they are owed and restart with no debt. Isn't that how it goes? Except that HMRC may have cottoned on and, hopefully, the RFU won't allow it. Not holding my breath over the latter .....

Discussion here of the same issues and the possible RFU response.
http://www.rugbypass.com/news/how-worcester-might-escape-35-point-reduction/" rel="nofollow -  

To be frank it is how a lot of entrepreneurs operate these days. Just read Private Eye's coverage of the Pandemic Profits.

I suggest that in this case they think that they are entrepreneurs......pair of rogues more like!

If a layman like you and me can see it, then no doubt HMRC can see it too. The problem is what can the RFU do about it? 

Worcester are an individual club who just hold membership, its not like the American franchises where the league can directly intervene if the people running it are doing something shady with the inner workings. And as for HMRc, if they flog off all the assets before going into administration, do the administrators have any jurisdiction over that which was sold ex post facto?

It's still available on the BBC, linking working 

The link has a trailing %20 - this is a space. Trim that off and it finds the correct page

https://www.bbc.co.uk/sport/rugby-union/62630861" rel="nofollow - https://www.bbc.co.uk/sport/rugby-union/62630861

Also what would happen to P shares. 

https://www.worcesternews.co.uk/news/20252755.worcester-warriors-colin-goldring-banned-failed-car-deal/" rel="nofollow - https://www.worcesternews.co.uk/news/20252755.worcester-warriors-colin-goldring-banned-failed-car-deal/

Well if that did happen and the owners were to stay in place they could charge them with bringing the game into disrepute and ban them from the game.

But this is the RFU who are seemingly quite happy for those who orchestrated the cheating at Saracens for at least seven seasons to remain in place so you can forget that.

The house used by academy players has apparently been repossessed.

https://12ft.io/proxy?ref=&q=https://www.telegraph.co.uk/rugby-union/2022/08/22/worcester-players-fury-threat-administration-looms-stricken/" rel="nofollow - https://12ft.io/proxy?ref=&q=https://www.telegraph.co.uk/rugby-union/2022/08/22/worcester-players-fury-threat-administration-looms-stricken/

Worcester Warriors could be saved from going into administration following an approach from a consortium led by former chief executive Jim O'Toole. Irishman O'Toole, who still lives in the city, has told BBC Hereford & Worcester he has had serious interest from an American investor, which would also involving local businesses. Warriors remain in dialogue with HMRC over their unpaid tax bill. "I just don't want this city without a professional rugby club," said O'Toole. "I still have a big emotional attachment to Worcester and I just want to be able to help in some small way. It's about saving the club, but in a sustainable fashion.

Surely the first question is what happened to the approx £15 mill Worcester should have received from the CVC deal?

How can a club receive around £15 mill a couple of years ago, yet supposedly now owe the tax man around £6 mill. Am I missing something?

After the Saracens farce and the ongoing situation at Wasps, this really doesnt look good for the rfu. The Rugby Paper are also reporting that two other clubs might have similar problems. I assume all of these clubs received approx £15 mill via the CVC deal?

I am sceptical that any deal can be done this side of Administration. Any buyer, buying before Administration will have to pick up all the known and unknown liabilities of the company. For that to be something a sensible buyer would contemplate would require many weeks if not many months of due diligence examination by accountants and lawyers.

In the circumstances that Worcester Warriors are in, 99% of the time a sensible purchaser would treat with the Administrator and only buy the assets they wanted and 'Tupe' across the staff and players.

It is a smart move to flag interest at this stage because you could place yourself at the head of the queue in negotiating with the Administrator.

I would be pretty certain that any deal that is done will be via a Pre-Pack Administration

Just to provide everyone with a bit more understanding of  the practicalities of what happens when companies get close to insolvency:

1. Sensible directors will take insolvency advice to ensure they are not 'wrongfully trading' if they were wrongfully trading then they expose themselves to potential personal liability from the creditors

2. The advisors (usually insolvency specialists) see this advisory appointment as an opportunity to get into position to get the Administration gig

3. The insolvency advisors will work with the directors and potentially interested parties to work out the shape of a pre pack administration deal

4. Once this is agreed the directors put the company into Administration and the Administrator will convey those assets (for value)  from the company into a Newco phoenix company owned by the new investors 

5. This pre -pack could be challenged by the unsecured creditors who usually come out with nowt

6. The employees are tuped (transfer of undertaking) across to the Newco

7. In Worcester's case there are a number of complications in that there is a regulator involved ('the RFU') and HMRC are all over it and the directors and the insolvency advisors face additional scrutiny so everyone will be treading very carefully.

A Pre Pack Administration is a legitimate route to save the 'goodwill' in the business and to try to preserve some continuity .......in Worcester's case the imminence of the new season means that a deal has to happen swiftly and from a reading of the press reports it is probably unlikely that Worcester have the money to pay August salaries and after the media attention creditors will be screaming for payment.

It will be interesting to see what the RFU do given that last time this happened to a Premiership club they were dropped to the bottom of the pyramid. 

New owners are unlikely to invest if there was little chance that Worcester warriors could remain in the Premiership or quickly get back into i

Of course the proposed New Consortium could just but the shares in the Worcester Warriors company but that is very very unlikely.

From my reading of the press reports  it is likely that a lot of work has been going on in the background but I still think an Administration with all that entails is a more likely scenario than a sale of the shares in Worcester Warriors.

Just my opinion of course 

People keep mentioning administration, but the HMRC has submitted a winding up petition.

Which is why the accounts are frozen.

Unless someone pays HMRC, I believe we are looking at liquidation.

And it is not stopping here, HMRC wants its money and every club will need to pay up, or face a similar situation.

You could be right Camquin.......but HMRC would accept something rather than nothing so new investors could possibly do a side deal with HMRC ......as long as that was legally tenable under insolvency law........that aspect is definitely beyond my knowledge

I am not sure that a winding up order stops the Directors putting the Company into Administration though. You may know better than me Camquin

I think I have found the flaw in  your argument Eddie. No sensible buyer would ever buy a rugby club.

WEvans..........you are absolutely spot on! 

Commercially it is a bonkers proposition and with a number of class actions in the pipeline even more so.

Working on the principle that I can’t take it with me and none of those mentioned in my will need it, I might buy a rugby club. As the current Mrs Halliford keeps telling me as she gives me the latest holiday brochure - you can’t take it with you!

Seriously there is already an impediment to a pre-pack whic( is the break-up of the land and the sale of the Car Park, and other elements to companies not covered by any Administration.

PS Halliford . . . loads of clubs are available :-)

PPS ALL OF THE ABOVE IS SAID " WITHOUT PREJUDICE"!!!!

If I remember my insolvency law correctly, any insolvency practitioner would have to investigate pre-insolvency transaction to ensure that any such transaction was at market value and for the benefit of the company. Again, if I remember correctly, The presence of a Winding Up petition carries a separate and more onerous investigation when compared to liquidation.

But then I haven't undertaken any insolvency work for 35 years 😎

Just saying ......

According to the Worcester message board, the club has to provide the RFU with sufficient assurances they can complete the season by the end of August, or they will be ejected.

I assume the other clubs also have to provide this guarantee.

Worcester Warriors players and staff remain in a "state of limbo" with a pre-season fixture just over a week away. Earlier this month, HMRC hit the Premiership club with a winding-up petition over unpaid tax, believed to be in excess of £6m. While the coaches and playing group have continued to train, the non-playing staff have been told not to come into work. It is understood the club's bank accounts have also been frozen. On Monday, co-owners Jason Whittingham and Colin Goldring released a statement saying they were "working through a number of options with our advisors", adding "these include solutions for keeping rugby at Sixways". It is thought club staff have had little direct dialogue with the owners, and only saw the statement shortly before it was released. Sources have also told the BBC their wages have been paid sporadically for the past few months, and that they are not expecting to receive their wages on time next week.

required is for most players not rewarded sufficiently. 

If correct, there is legalisation in place to reverse the sale

Hi, totally agree but its not only the £6 mill owed to HRMC and the £14 mill loan , there is also the question of £15 mill from CVC.

Surely there must be something we are not being told and someone must be looking into it from various different angles.

and the circa £2m chipped in by the RFU each year and any furlough payments made by HM Govt 

looks like in the last couple of years WW have probably chewed through some £45m+ because they will have also received revenues from spectators and catering/bars etc......

With the well dry it must be north of £45+ million in expenses over a couple of years and with the salary cap at something like £7m per annum over those years some how overheads and administration costs must have accounted for circa £15m per annum

that is a lot of admin costs........worthy of the RFU itself

Apparently, they had a time to pay arrangement for the income tax bill, then missed a VAT payment.

Hence, the move to a winding up order.

There are some tweets from the owners, who sound upbeat, but I am not sure how much room they have.

At least the room doesn't have a locked door and a window with bars. Not yet anyway.

What should the RFU be doing?

Is it their job to help out clubs who can't control their finances?  If it is they will be very busy.

More aptly what are the Premiership clubs doing to help one of their own? 

I cannot see where or when the RFU has stepped back and said what the F.... are we doing!

According to the Telegraph, the Worcester players will not be paid.

So nearly 250 people not getting paid. 

We need a new structure for rugby,

One where a premiership club can survive on the income it receives

and can cope with relegation

That may be one where the French win the European cup and many English player play in France.

But we cannot go on with clubs losing £6m each year.

Richardson would probably be over the moon if he could get annual losses down to £6m pa at Wasps tbf.

So so right. The current situation is absolutely bonkers

A closed shop Premiership was meant to provide financial stability for the clubs but it won't as they still haven't worked out they are paying too much out on players. 

They will try to use Covid as an excuse but that is just a smokescreen in which they want to hide their poor business plans. 

The RFU should centrally contract a group of players, therefore removing one of the biggest costs from the clubs, then loan them back. You could go as far as having a draft, the newly promoted* team gets first dips, the previous winners the last.

* Goes without saying I would have automatic promotion with no artificial boundaries. 

Senior French clubs have to submit monthly accounts based on a standard accounting structure so that variations can be seen and HMRC debts highlighted immediately

One of the biggest benefits of a ring-fenced Premiership is that it prevents other clubs from being dragged into a totally unsustainable competition which will almost inevitably destroy some of its members.

Another benefit is that it keeps reputable clubs from being Lovelyed by playing in a competition that has been Lovely for at least seven of the last nine seasons.

Of course it shouldn't be like this and there should be automatic promotion and relegation but until we get an honest and sustainable Premiership I reckon other clubs are better staying well clear.   

Completely agree ............that is why Caldy will be scaling back their ambitions this year.........