Wasps, of English rugby union’s top-tier Premiership Rugby, have officially entered administration and immediately ceased to trade.
The club announced this was impending last week after being suspended from the Premiership, and their subsequent relegation has now been confirmed.
Coventry-based Wasps become the second top-flight team to be placed into administration in a matter of weeks after Midlands rivals Worcester Warriors suffered the same fate.
They have made 167 players and staff redundant as a result.
However, Arena Coventry Limited (ACL), which operates the Wasps-owned Coventry Building Society Arena (CBS Arena), has not gone into administration and will “continue to trade as normal.”
While Wasps Holdings Limited is the firm to have actually entered administration, ACL, also part of Wasps, has filed a new notice of intention to appoint administrators with the High Court in London.
That would allow ACL, which holds the Coventry City Council lease to operate the stadium, a two-week grace period, which will give time to find further funding so that the CBS Arena remains operational, and the tenants of the stadium Coventry City, the second-tier English soccer side, can continue to play their home matches.
The CBS Arena is also due to stage matches at the Rugby League World Cup but the organizers said they had "received written assurances" that Friday's match between Australia and Scotland at the stadium would go ahead as planned.
In a statement, ACL said: "The arena is a profitable standalone business with huge potential and therefore is attracting strong interest from a number of parties. We have filed a notice of intention to appoint administrators and we will be aiming to use this period to complete a deal with a venue operator.
"It would also allow the arena to continue to generate funds and would also mean the Rugby League World Cup game and Coventry City fixtures will go ahead as planned, which is in everyone's interest."
Wasps filed a notice of intention to appoint administrators on September 21 to help with their debts but stated last week (October 12) that, despite negotiations ongoing to secure the future of their teams, “it has become clear that there is likely to be insufficient time to find a solvent solution for the companies within the group.”
The club had been hopeful of securing new funding to help with a £35-million ($38.7-million) debt owed to bondholders following their relocation from London in 2014.
According to GlobalData Sport analysis, over $150 million worth of Premiership Rugby television deals are now at risk following Wasps’ administration.
Conrad Wiacek, head of sport analysis at GlobalData, commented: “While over 150 employees at Wasps Holdings Ltd have now lost their jobs, including players and coaches, administrators and commercial teams, the ramifications of this could reach far beyond the club itself.
“Premiership Rugby, whose deal with BT Sport expires at the end of the 2023-24 season, could lose out on close to $100 million in revenue if fixtures cannot be fulfilled. Additionally, international broadcasters like NBC in the US will look unfavorably at Premiership Rugby with Wasps following Worcester into administration this season alone.
“With Premiership Rugby trying to make strides in growing the game internationally, losing one of its most famous teams will dent that ambition. Additionally, The Coventry Building Society Arena, now owned by Wasps Holdings and home to Coventry City FC, will likely be seen as a prize asset by anyone looking to buy the club.
“Given the recent turmoil in ownership of the arena, most sports fans in Coventry will be hoping the situation is resolved and the venue can still play host to soccer and rugby moving forward.”
Meanwhile, England's Rugby Football Union (RFU) national governing body and the Premiership will face questions from members of parliament (MPs) to address the financial issues in the sport.
Representatives from the respective organizations will be quizzed by the government’s Digital, Culture, Media, and Sport Committee (DCMS).
The session, which will take place in November, will “examine issues around the financial structure and viability of the game,” as well as “the role of the national governing body and top-flight organizing body in supporting clubs and ensuring the health of the sport.”
Julian Knight, DCMS committee chair, said: “The fact that two of the country’s top clubs have now suffered the fate of falling into administration raises serious concerns about the future of the sport and its financial viability.
“The RFU and Premiership Rugby have acknowledged the need to set a more sustainable path for club rugby. We will be pressing them to ensure they are putting the foundations in place to guarantee the health of the sport from the top level right down to the grassroots.”
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