Steve Diamond, the most experienced director of rugby in the Premiership, is facing the toughest 10 days of his career and has asked his Worcester Warriors players to continue training despite the looming threat of closure as the club enters administration.
If the Worcester players and staff are not paid their wages at the end of the month with the club in administration they will, effectively, be out of contract and able to look for new clubs and the Premiership will revert back to 12 teams.
The squad includes British and Irish Lions Duhan van der Merwe and Rory Sutherland and England internationals Ted Hill and Ollie Lawrence who would attract considerable interest from other Premiership clubs but with 80 players left without a contract at the end of last season, the collapse of Worcester could leave the majority of the squad out of work.
If Worcester go out of business they will join London Welsh, London Scottish and Richmond in suffering that fate and any new club would have to start at the bottom of the English leagues.
Attention is now focussed on owners Colin Goldring and Jason Whittingham who bought the majority shareholding in 2019 from a business consortium. Any potential saviour will be watching to see what the owners put into administration and if it is solely the rugby club without the considerable land the club owns around their Sixways Stadium, then a rescue become less likely.
Diamond said: “If the financial issues cannot be resolved then potentially the club could stop being a Premiership side and that is worrying. In the current economic climate it is not as if there is a Knight on a white horse going to ride into town on Monday morning.
“The owners are attempting to find a solution with HMRC (over unpaid tax) and they have kept me in the loop and I have done the same with the players and staff. I have asked the players to keep knuckling down and we will see where we are in 10 days. Any solution that can be put in place won’t happen overnight and our payroll isn’t for another 10 days.
“Everyone was paid at the end of last month and so it is ‘keep our heads down and carry on’ – obviously not as normal because there is anxiety in the place. Myself, Nick Easter (forwards coach) and some new players have all moved down and bought properties. It is a worrying time and we have to just keep on going.
“I can’t speak for the owners but they are open to all avenues of keeping the business running. The players have shown great enthusiasm through this difficult time and I am able to compartmentalise it and concentrate on getting ready for the start of the season in three weeks time.”
The Worcester crisis along with Wasps’ inability to pay back a £35m bond scheme, comes as one Premiership club borrowed £19m under the Government’s Sport Winter Survival Package which must be repaid.
However, amid the gloom, there is some good news for the Premiership clubs with a much needed £20m cash injection this season thanks to their eight year funding deal with Rugby Football Union but it will only be a temporary relief from mounting debt.
Under the current Professional Game Agreement, signed in 2016 between Premiership Rugby Limited (PRL) and the RFU, clubs are guaranteed funding from the union each season. For the first four, they received a fixed amount of £25.5m, however, the pandemic had a devastating effect on income which is largely based on RFU revenue from Twickenham matches. As a result of internationals having to be played without crowds, the clubs received less than £10m last year as the Union suffered a loss of more than £20m.
With four England test matches taking place this November – against New Zealand, South Africa Argentina and Japan- the Union’s income will be significantly increased and each Twickenham test match is estimated to generate more than £10m thanks to hospitality sales, tickets revenue and television deal income. As a result the clubs will share around £20m this season – double the figure received last season.
The Premiership clubs are currently operating under a £5m salary cap, designed to restrict losses following the impact of the pandemic with squad sizes being cut to meet that target.