Cork-born insurance magnate Derek Richardson’s foray into rugby club ownership appears to be nearing a painful and extremely expensive conclusion, with the collapse into administration of his English Premiership club Wasps.
Richardson, a former insurance broker who cofounded 123.ie, is estimated to have pocketed well over €30 million when the firm was sold to Royal & Sun Alliance for €80 million in 2010. He invested up to £20 million (€23 million) of his fortune in Wasps, previously London Wasps before it moved to Coventry in 2014, the year after Richardson bought the club. That investment now looks to be in peril.
On Monday, 167 of its staff, including all players and coaches, were made redundant as it entered administration when a rescue deal failed to emerge. The club is on course to be relegated from the Premiership to the Championship following a major financial hit from the pandemic.
What can be done to ease the pressure on the restaurant industry?
That will be painful for its supporters and squad, but its financial backers look likely to be hit where it hurts, too. Secured bondholders are owed about £35 million, while UK tax authorities are owed about £2 million. If, as expected, the assets such as the stadium are sold off and the club itself is let go under, the numbers suggest there will little or nothing left in equity. Richardson’s entire investment may be gone.
The Irish man, who co-founded life assurance brokerage hello.ie after selling 123.ie, pumped cash into Wasps in recent years in an attempt at keeping it afloat. As recently as a year ago, it opened a new training ground while, until recently, Richardson remained bullish about its future.
He surely will be devastated by what has happened. The cut-throat world of sports club ownership is a far cry from the financial returns of the insurance world.
