RFU Statement - Wasps and Worcester Warriors

The RFU Board today decided on the outcome of the regulatory assessment of the applications of bidders to form “phoenix entities” to take over the positions of Wasps RFC and Worcester Warriors RFC in the league structure.  This followed an extensive due diligence process overseen by the RFU Club Financial Viability Group.  This included reviews of financial information, considerations of the bidders and their business plans for the clubs, and external background checks in order to understand the level of risk with each proposed bid.   

This enhanced process included the setting of conditions that would be necessary for any approval to be given.  These conditions were designed to mitigate the particular risks attached to each club, and facts emerging through the due diligence process.  These conditions were in addition to the “special measures” conditions that result from a club entering insolvency.  Together, these conditions are intended to ensure that clubs who have gone into insolvency are more closely monitored and that the risk of future insolvency is minimised.    

The RFU Board concluded that the application for Wasps was approved subject to a number of specific conditions being met and that it would continue to work with the bidders through the satisfaction of those conditions over the coming weeks.  These include a range of financial commitments to ensure that the club remains funded, the lodging of a significant bond, the regular provision of financial and other information, swift payment of rugby creditors, and corporate governance requirements including relating to the club’s board of directors and risk management process. 

The RFU put forward a number of conditions that the bidders for Worcester Warriors would need to meet to protect against the particular concerns relating to the club and what had emerged through the due diligence process.  These include commitments not to dispose of the land around the stadium, thereby securing it for the club and the local rugby community, swift payment of rugby creditors and other key governance conditions, including relating to the club’s board of directors and risk management process.   The bidders, selected by the administrators of the insolvent WRFC Trading Limited, have informed us that they are not prepared to meet these conditions, and therefore the RFU Board was unable to approve their application. 

The RFU Board was also not satisfied with the information provided, in particular relating to the financial position of the buyer and their ability to continue to fund the club and to deliver on the business plan provided which included significant development at the Sixways site. 

The RFU has not been provided with sufficient evidence of funding.  While some information has been provided, this has been only internal P&L information which appears to cover only part of the business of the main shareholder and the RFU was told that no further information could or would be provided.  This means that there is no information as to debt levels or shareholder funds and no externally verified financial statements have been provided.  Evidence of a non-binding heads of terms for external off-shore financing has been provided, but this is not committed.  For these reasons the RFU does not have comfort that the business plan can be funded, nor that rugby is at the centre of the proposal for the business which is an American medical services company.   

The RFU is also concerned by the public statement from the bidders that they are prepared to acquire the site and develop it without a rugby offering.  

The bidders for Worcester Warriors have not accepted the regulatory position and have not sufficiently engaged with the necessary conditions required and have therefore put themselves in a position where the RFU Board could not approve their bid.  

The RFU will now work with the administrator to enable alternative bids that would secure professional rugby at Sixways and to work together in a timetable to enable that to happen.  The RFU urges the administrator not to progress any sale that does not guarantee a future for rugby within the local community. 

RFU CEO, Bill Sweeney, said: “We are pleased to be able to proceed with the approval for Wasps and thank the bid team and the administrator for the open and collaborative approach working with us through the process.   

“We understand that the decision will not be the news that Worcester Warriors’ former staff, players and fans will want to hear; the best long-term interests of the club and rugby in Worcester is our key priority.   

“In the coming days we will be in touch with the administrator to discuss other bid options as our goal remains to support the continuation of the rugby club in Worcester.  We are prepared to extend the deadlines to explore if an alternative bidder can be found who has the continuation of rugby in Worcester central to its business plan.”  

The RFU would again like to place on record its sincere thanks to the administrators of both clubs, given the substantial amount of work that has taken place to secure the future of each club. 
 
 
Background 

• Wasps’ bid does not include the women’s team which is a separate club and which will continue to play as part of the amateur club, Wasps FC, at Twyford Avenue.   
• The conditions around approval of non-disposal of land is similar to that placed on community clubs when the RFU funds development at their grounds. 
• The preferred bidders for both clubs were determined by the administrators – neither the RFU nor DCMS were able to choose which bidder was selected. 
• The Club Financial Viability Group is made up of suitably qualified members of the RFU Board, Council and Executive Staff, with representatives from Premier Rugby, the Championship and National League Rugby.  It includes specialist insolvency experts.