Wasps are facing the prospect of relegation after moving towards administration, and because of that, English club rugby has plunged into turmoil.
Rugby Football Union told Worcester Warriors that if they cannot produce a credible plan to take the club forward by Monday, they will be suspended.
After Wasps have filed a notice to appoint an administrator, the financial hardship of Premiership clubs has been exposed. The Coventry-based club also joins Worcester in turmoil after he failed to repay a debt of £35m that was due to bondholders in May.
The club recently stated that they were in advanced discussions to refinance the bond, which helped them move from London to the Midlands in 2014 through the fund.
In a Wasps statement, it is said that Wasps Holdings Limited has taken the difficult decision to file a notice of intention to appoint administrators to protect its interests due to the impending threat of action from HMRC.
RFU regulations state that a club that enters administration during the season will be relegated for the following campaign as it is classed as an insolvency event, and notice of intention to appoint an administrator is also considered an insolvency event. These regulations paint a bleak picture for Wasps.
The governing body said in a statement that the RFU is in dialogue with Wasps, and we will work with them to understand their sustainability plans, the current action, and what the next steps will be.
Wasps have started the Premiership season with consecutive defeats that’s why the administration would likely lead to a player exodus and relegation to the Championship next season.
On Monday, 5 pm, RFU gave a deadline to Worcester to show they have the necessary funds and long-term plan to lift the club from the crisis. The union also ordered Worcester to provide guarantees by midday on Thursday to safely go ahead with Saturday’s home Premiership fixture against Newcastle.
The English club must provide safety guarantees and evidence they have the necessary medical provisions to host Newcastle.
In developments on Wednesday, the Warriors were forced to call on the 37-year-old former England deaf international player Mat Gilbert and the 41-year-old academy coach Jonny Goodridge for their 22-man squad for the Premiership Cup match at Gloucester.