English Premiership rugby clubs who “have been teetering on the edge” are set to come under further scrutiny by the British government over the repayments of their £124 million Covid bailout loans.
A report by the UK’s National Audit Office details how the Department for Digital, Culture, Media and Sport (DCMS) awarded 26 per cent of its £474 million loans to Premiership clubs, including £41.6 million to Worcester, Wasps and London Irish, who have all since gone bust. According to the report, they are three of nine borrowers who in total received £46.1 million and their collective demises mean the DCMS does not expect to recover up to £29 million in loans awarded.
The terms of the loans mean all borrowers should have made a first repayment by September 2025 and the report warns the “DCMS may be required to respond to a greater number of difficult cases”. It is understood some Premiership clubs have renegotiated the terms of their loans but league insiders insist none of the 10 current clubs have missed repayments.
The report from the UK’s independent public spending watchdog reads: “Acknowledging its ongoing role as a key stakeholder, DCMS is closely monitoring the remaining Premiership clubs to identify any which may be behind on their repayments and facing financial difficulties. In doing so DCMS is monitoring the risk it faces to protect its investment on behalf of taxpayers.”
In the summer of 2023, around the time London Irish were being wound up, the British government asked two independent advisers – Ralph Rimmer, the former chief executive of the Rugby Football League, and the current UK Sport board member Chris Pilling – to address the need for “urgent work to help secure rugby union’s immediate future”.
London Irish received a loan of £11.8 million, Wasps were given £14.1 million and Worcester were handed £15.7 million. In June 2023, the administrator of the insolvent estate for Worcester Warriors made an insolvency payment of £9.8 million and in October 2024, the administrators of Wasps paid £0.3 million. DCMS is still in discussion with administrators over further insolvency settlements and expects to receive a further £7.3 million to £11.1 million from all insolvencies so far.
Given the parlous state of finances across the league, however, there are fears over the remaining 10 clubs with Newcastle and Exeter recently making moves to seek investment.
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The chair of the committee of public accounts Geoffrey Clifton-Brown said: “The government stepped in to lend just shy of half a billion pounds to the sports and culture sectors during the pandemic, saving many organisations from near-certain failure.
“Although progress has been made in recovering initial repayments, it is concerning that up to £29 million of taxpayer money could be lost from borrowers who have since gone under. DCMS should continue to keep a close eye on English rugby union clubs that have been teetering on the edge. Given the public money at stake, the department has more to do to show it has a long-term plan for managing and recovering loans across the sectors.”
A Premiership Rugby spokesperson said: “Since the pandemic the clubs and Premiership Rugby have worked hard to move back into a period of growth and stability, which is well under way. Premiership Rugby strengthened its financial regulation and governance with the formation of an independent Financial Monitoring Panel, which was set up with the help of former government and financial advisers. Our clubs are fully committed to repaying all taxpayer money and we continue to work closely with DCMS, for whom we are thankful for their ongoing support.” – Guardian
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