Dire 'will not survive' warning issued on Worcester

A parliamentary committee has been told Worcester will not survive under any ownership without retaining its P share.

The Sixways club were relegated from the Gallagher Premiership on October 6 after the partial liquidation of their holding company WRFC Players Ltd a day earlier, owing to unpaid tax in the region of £6million being pursued by HM Revenue and Customs.

While a consortium led by former Worcester chief executive Jim O’Toole was chosen last month as the preferred bidder to rescue the club by administrator Begbies Traynor, the debate over what happens with their P share continues.

The P share entitles clubs to a slice of Premiership Rugby’s central revenue and relegated teams from English rugby’s top flight are able to hold onto it for a season but Worcester’s collapse into administration has left them liable to losing a potentially key revenue stream under a pre-emption right.

Carol Hart, head of Worcester Warriors community foundation, appeared in front of the Digital, Culture, Media and Sport select committee on Thursday in an evidence session and highlighted the importance of the P share.

Hart said: “(Former Worcester chairman) Cecil Duckworth spent 20 years building financial value into our P share and if we lose the P share, the club will probably not survive under any ownership.

“That is my personal opinion. I think we owe it to Cecil’s legacy and the legacy of the Allen family to make sure the P share is protected.”

Robin Walker, an MP for Worcester, echoed Hart’s calls and showed a letter to DCMS chair Julian Knight that had been written to Premiership Rugby and Rugby Football Union asking them take into account the “very strong moral case” the Sixways club have to retain their P share.

“What has happened here is no fault of the rugby club, or the people at the rugby club and only of the directors who were there but are no longer there,” Walker told the committee.

“I have here a copy of a letter that I am happy to give to the committee that has gone to Premiership Rugby Limited and the Rugby Football Union signed by all six Worcester MPs, the five current or former mayors of Worcester, all heads of departments and a number of the players which is urging them to allow the club to keep its P share.

“We recognise that PRL has a pre-emption right and a team that is relegated as a result of administration, they have the legal right to pre-empt but in this case there is a very strong moral case to say the people at Warriors have done everything they possible can to meet their rugby obligations.”

Premiership Rugby chief executive Simon Massie-Taylor also faced the parliamentary committee later in the day at Portcullis House and insisted letting Worcester and fellow financially stricken club Wasps hold onto their P shares would send out a bad example to its current teams.

Massie-Taylor insisted: “P shares are not a perpetual right.

“When you get relegated and fail to come up after a second year, those P shares can be acquired off you, so all clubs as part of their shareholder agreement sign up to pre-emption rights where if a club goes into administration, the P shares can be acquired off them by the other clubs.

“Wasps and Worcester have knowingly signed up to this. While I completely understand the emphasis that some potential bidders wanted to retain that asset within the administration process while getting rid of as many liabilities as possible in terms of debt, I don’t think that is a particularly strong message to send to the rest of our clubs that essentially you can go into administration and retain assets while getting rid of liabilities.”

MP Walker did conclude that his talks with the O’Toole’s consortium, the preferred buyer for Worcester, indicated they could get the club running again without its P share.

“Having spoken to some of the potential investors, they are clear they will try and make this work with or without the P share,” he said.

“They will make sure there is a team playing in the Championship aspiring to get it back up into the Premiership through performance but obviously that is a much more difficult task if we lose the income that comes with the P share.”

Meanwhile, DCMS chair Julian Knight concluded the evidence session by revealing he would write to the Serious Fraud Office concerning the activities of former Worcester owner Colin Goldring.