Premiership rugby clubs that have been struggling financially are set to face increased scrutiny from the government over the repayment of their £124 million Covid bailout loans. A report by the National Audit Office reveals that 26% of the £474 million in loans granted by the Department for Culture, Media and Sport (DCMS) went to Premiership clubs, including £41.6 million to clubs like Worcester, Wasps, and London Irish, which have since gone bankrupt. The report highlights that these three clubs, along with others, received a total of £46.1 million, but their financial collapses mean that the DCMS may not recover up to £29 million of this sum.
The loans were designed to help clubs survive the financial impacts of the Covid-19 pandemic, with repayment terms requiring all borrowers to make their first repayment by September 2025. However, the report warns that the DCMS may face a growing number of difficult cases as some clubs are struggling to meet these obligations. It is understood that some Premiership clubs have renegotiated their loan terms, but none of the current 10 clubs are reported to have missed repayments yet.
The report emphasizes that the DCMS is closely monitoring the remaining clubs to identify any that may be falling behind on their repayments or facing financial difficulties. The department is responsible for safeguarding taxpayer money, and its oversight is critical as it seeks to protect its investment.
In the summer of 2023, as London Irish were being wound up, the government appointed two independent advisers Ralph Rimmer, the former chief executive of the Rugby Football League, and Chris Pilling, a UK Sport board member to address the urgent need to secure the future of rugby union. These advisers were tasked with assessing the financial health of the league and ensuring that the sport’s future was not jeopardized by mounting financial pressures.
London Irish, Wasps, and Worcester Warriors received significant loans from the government, with London Irish receiving £11.8 million, Wasps £14.1 million, and Worcester £15.7 million. Following their insolvencies, administrators for these clubs made partial payments on the outstanding loans, with Worcester Warriors’ administrator paying £9.8 million in June 2023, and Wasps’ administrator paying £0.3 million in October 2024. The DCMS is still in discussions with administrators to recover additional funds, expecting to receive between £7.3 million and £11.1 million from these insolvency settlements.
The financial instability within the league is concerning, and there are fears that other clubs may follow in the footsteps of those that have already gone under. Newcastle and Exeter have recently sought investment in a bid to secure their futures, highlighting the precarious financial state of the league. The chair of the Public Accounts Committee, Sir Geoffrey Clifton-Brown MP, expressed concern over the potential loss of taxpayer money, stressing that the DCMS should continue to monitor the situation closely and develop a long-term plan for managing and recovering loans across the sector.
The government’s intervention during the pandemic was crucial in preventing many sports and cultural organizations from collapsing, but the ongoing repayment challenges show that the recovery process is far from over. While Premiership Rugby and its clubs have worked hard to return to a period of growth and stability, the road ahead remains uncertain. The formation of an independent Financial Monitoring Panel to strengthen financial regulation and governance in the league is a positive step, but much remains to be done to ensure that the loans are repaid and that the financial health of the clubs improves.
In another blow to the sport, England full-back George Furbank is now a doubt for next year’s Six Nations after suffering a broken arm during Northampton’s recent Champions Cup match against the Bulls in Pretoria. Furbank, who had started three of England’s four autumn Tests, may require surgery, and his absence would be a significant setback for Steve Borthwick’s side. England’s Six Nations campaign begins on 1 February against Ireland in Dublin, and the team will be hoping for positive news on Furbank’s recovery.
