Premiership Clubs’ Collapse Leads to Over £30m in Unpaid Covid Loans for Taxpayers

The financial collapse of London Irish, Wasps, and Worcester has resulted in taxpayers losing over £30m due to unrecovered Covid loans. Wasps’ last match before ceasing operations was a 40-36 loss to Northampton at the Ricoh Arena in October 2022. These three Premiership clubs ceased trading during the 2022-2023 season, having received £41.6m in emergency funding from the Department for Culture, Media and Sport (DCMS). This funding was intended to offset revenue shortfalls from games and broadcast agreements impacted by the pandemic. Worcester Warriors had a total debt of £15.7m, with their administrators returning £9.8m in June 2023. Wasps’ administrators have reimbursed £300,000 from their £14.1m loan. However, no funds from London Irish’s £11.8m loan have been repaid to the public, as stated in a National Audit Office (NAO) report. The DCMS anticipates recovering an additional £7.3m to £11.1m in total from these three clubs and six other entities that have failed since obtaining loans. London Irish, Wasps, and Worcester have each submitted applications to rejoin the Championship, which is set to expand from 12 to 14 clubs next season. Although all rugby creditors must be fully reimbursed for these clubs to resume professional rugby, outstanding government debt might persist. Sir Geoffrey Clifton-Brown, who chairs the Public Accounts Committee, stated: “Although progress has been made in recovering initial repayments, it is concerning that up to £29m of taxpayer money could be lost from borrowers who have since gone under.” Clifton-Brown further commented that the DCMS ought to implement a more comprehensive strategy for retrieving the remaining £123.8m that was lent to Premiership clubs throughout the pandemic. He also remarked: “DCMS should continue to keep a close eye on English rugby union clubs that have been teetering on the edge.” He continued: “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.” The NAO’s report observed: “DCMS accepted that some borrowers were already financially risky before the pandemic.” The report further noted: “It nonetheless considered it needed to provide loans to some organisations in both the culture and sports sectors despite their financial vulnerability as otherwise the bodies would almost certainly have failed, and its overriding intention was to protect the sectors through the pandemic.” Premiership clubs represented 57% of the loans issued to the sports sector by the DCMS during the pandemic, with rugby union collectively comprising 64% of the overall amount borrowed. Following these, rugby league (£24.2m), horse racing (£21.5m), and tennis (£14.3m) were the subsequent largest recipients, while non-league football clubs obtained £13.4m.