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Why there isn’t 'mass panic' at London Irish - Andy Goode
By Andy Goode
It’s not good at all that players and staff at London Irish are reportedly yet to be paid their April wages but people should be careful likening this to the Worcester saga. The current financial climate in English rugby and the clamour for headlines mean that phrases like ‘financial meltdown’ are being bandied about and it is being suggested that they could go bust – but that isn’t what I’m hearing.
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Any deal of this magnitude is difficult to conclude. There are so many fine details to iron out before everything is in place. Of course, it could still fall through but people are rushing to judgement because of everything that has happened elsewhere already this season.
The optics aren’t good when the takeover has already been protracted and has been talked about for a number of weeks and then somebody suggests that the delay with the wages is because of the bank holiday, yet payment still hadn’t gone through on Wednesday morning.
Indeed, it isn’t just optics and the reality of that situation will have made life very difficult for a lot of people at the club who have outgoings at the start of the month and will be struggling to make ends meet during the delay.
However, there is a big leap from that to claiming that the Exiles are on a financial precipice and are about to go under imminently, so a bit of balance wouldn’t go amiss.
Having spoken to people at Irish, I know there have been regular meetings with representatives of the US consortium that is attempting to complete the takeover and fingers crossed they are as good as their word. You can understand why people would worry when you factor in what missed payrolls led to at Worcester and the mistruths that were told there, but every situation is different and this one could yet turn out to be very positive for London Irish.
They have been brilliant on the pitch this season, have an excellent training complex at Hazelwood and a top-class academy – all ingredients that are clearly very attractive to potential investors.
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The fact that they don’t own their own stadium is negative and there were rumours recently about a long-term ground share with AFC Wimbledon as opposed to the current deal to play at Brentford’s Gtech Community Stadium.
That would be something that you could envisage being tricky to iron out for the consortium but it’s imperative that the club is able to keep what they generate on match days or it will likely be getting into more and more debt all the time.
Due diligence also has to be done on both sides and the RFU, who have contacted Irish to seek reassurance that staff and players will receive wages imminently, will be conducting their fit and proper owners’ test but Premiership Rugby seem confident that everything will be okay.
“I do think it’s different (to the situations at Worcester and Wasps),” chief executive Simon Massie-Taylor told BBC Radio 5 Live. “Between Premiership Rugby and the RFU, we have been engaged for quite a while with both the current ownership and the future buyers and there are lots of very positive signals coming from both sides.
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“It’s been reported that the new ownership have been in front of the players and the staff last week and today [Tuesday], which is a positive signal of their intent. And if it comes off then clearly you have got a new breed of investor. They are from across the pond and they have got interest in other sports, so it is a positive news story.”
Deals like this always take longer than anticipated to get over the line. The US consortium wanted to have everything signed, sealed and delivered by the end of April, which clearly hasn’t happened, so there is now an amount to cover in the meantime.
It’s abundantly clear that the financial situation at most Premiership clubs isn’t great at the moment but Irish do not have HMRC chasing them – as Worcester and Wasps did – and there is a big difference between a deal taking a frustrating amount of time to be concluded and them going to the wall.
Hopefully, the good news of a done deal and a few details will be just around the corner, with the April wages also landing in bank accounts imminently, and the headlines of the last day or two will be tomorrow’s fish and chip paper.
Only time will tell whether it does get over the line and Exiles fans can start looking forward to a potentially even brighter future, but the word from inside the camp is that there isn’t mass panic about the situation. Far from it.
This is a big deal. They'll be in breach of pension law and probably late with HMRC payments as well. The RFU should be taking sanctions - deducting points etc. But they'll sweep it under the carpet as ever.
I hope you're right - nice to see this more positive analysis. I would love (and am waiting to see) a Rugby Pass article about the RFU's $50 million debt. Thanks!