London Irish crisis deepens after winding-up petition issued against club

London Irish have been pushed closer to the brink after being hit with a winding-up petition by HMRC with the government on Friday also appointing two independent advisers in an effort to drag rugby union out of its financial crisis.

Irish are expected to be suspended from the Premiership next Tuesday and become the third club in the space of eight months to be kicked out of the league. The chances of the protracted takeover by a US consortium being completed before next Tuesday’s deadline are rated as slim with the Rugby Football Union still waiting key information from buyers, as it has been for months. The initial deadline was last week but was extended by the RFU primarily to allow for players and staff to be paid May’s wages.

The current owner Mick Crossan could still step in and commit to funding the club for another season but HMRC’s intervention for an unpaid tax suggests the end is nigh. Worcester and Wasps both went into administration last year and it was widely acknowledged that winding up petitions ultimately precipitated their downfalls.

Against that backdrop, the Department for Culture, Media and Sport has felt compelled to act by appointing Ralph Rimmer, the former chief executive of the Rugby Football League, and current UK Sport board member Chris Pilling to address the need for “urgent work to help secure rugby union’s immediate future”.

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[ Little green left at troubled London Irish ]

As part of the government’s Covid-19 winter sport survival package, Premiership clubs received loans totalling £124m and it is believed they could be renegotiated as part of the intervention to ease the mounting financial crisis. The intervention comes to “further protect [the government’s] investment on behalf of taxpayers”.

When Wasps and Worcester both fell into administration, the Rugby Football Union chief executive, Bill Sweeney, and his Premiership Rugby counterpart, Simon Massie-Taylor, were summoned to a parliamentary inquiry and skewered by MPs. Sweeney was accused of being “asleep on the job”, while he and Massie-Taylor were also blamed for “failure on an epic scale”. The subsequent report went on to label the demise of Wasps and Worcester as a “stain on the reputation” of rugby authorities.

“Following the recent failures of several clubs and the wider challenges stemming from the Covid-19 pandemic, rugby union has a unique opportunity to reshape its future strategic financial and sporting direction,” read a DCMS release. “The Government supports the RFU and PRL’s work to stabilise professional rugby union including attracting new capital investment. It shares the concerns of fans about where the game goes next, and has appointed two independent advisers to work with the RFU and PRL on their plans to restructure the Professional Game Agreement.

“The issues at Worcester, Wasps and London Irish have laid bare the challenges facing the sport of rugby union. The inability of rugby clubs to raise capital investment and the financial challenges at various levels within the game have contributed to the need for urgent work to help secure rugby union’s immediate future and advise on its future direction.”

The inquiry last November heard that Premiership clubs lose around £4m a year and the concern is that Irish would not be the last to be suspended given the financial outlook across the league. “This is a challenging time for rugby union and Ralph and Chris have agreed to utilise their experience to help the game develop a clear path for the future,” said the sports minister, Stuart Andrew. “We have seen several high-profile clubs and their fans left devastated in recent times and this additional independent advice will be of huge benefit to the RFU and PRL as they look to implement a new strategic direction for rugby.”

Rimmer and Pilling will work alongside Sweeney and Massie-Taylor in formulating the next Professional Game Agreement, which comes into force next summer and governs the domestic game. There is a plan afoot for a 10-team Premiership – if London Irish are, as expected, suspended next week that will be accelerated – but the PGA will also dictate club funding and player release for England duty. Both PRL and the RFU welcomed the appointments.

Sweeney said: “The restructuring of the Professional Game Agreement into a strategic partnership provides a great opportunity for all stakeholders to set aside self-interest and collaborate to reset and secure the future long-term sustainable growth of the professional game including developing the strongest possible second tier.”

PRL is due to shortly announce its new sporting commission – designed to give the organisation greater autonomy while the former government adviser Sir Nigel Boardman has also started work on formulating new financial regulations, as part of a financial monitoring panel. “We welcome the government acknowledging the role that they play in helping stabilise the future of the Premiership,” said Massie-Taylor. - Guardian