London Welsh Liquidating

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OXFORD, ENGLAND - APRIL 12: Matt Corker of London Welsh competes for the line out ball with James Cannon of Wasps during the Aviva Premiership match between London Welsh and Wasps at Kassam Stadium on April 12, 2015 in Oxford, England. (Photo by Jan Kruger/Getty Images)

7Today broke the news that iconic club side, London Welsh are to enter liquidation, after announcing to its 40 players and staff that their jobs are gone.

HISTORY

Formed in 1885 and based in Old Deer Park, the ‘exiles’  have contributed 177 players to the Wales team and 43 players for the British and Irish Lions. On the famous 1971 tour to New Zealand, they set a record still held today with seven players going on the tour.

London Welsh last saw Aviva Premiership rugby in 2015/16, where they only took 1 losing bonus point all season. The now reside in the Championship where they lie in fifth place after 11 rounds.

LONDON WELSH TO LIQUIDATE

The club are seeking voluntary liquidation due to not being able to afford a playing budget of £1.7m with crowds as low as 400. Club chairman Gareth Hawkins called his club’s current business model ”totally unsustainable”.

The Exiles were unable to meet the December 12 deadline for paying off a £250,000 bill to Her Majesty’s Revenues & Customs, and so will have to liquidate.

London Welsh liquidating means that in the new year they will have to come up with a sustainable programme for a semi-professional structure and provide it to the RFU, along with a £300,000 bond in order to exist as a company. They can still play during liquidation, and will hope to remain playing at Old Deer Park, according to Chairman Hawkins. Entering liquidation however will see the side deducted 20 points. This would currently put them bottom, and in the relegation spot.

If this is approved they will stay in the Championship, unless relegated. If the plans are not approved they will drop out of the league system altogether.

Hawkins still maintains hope for his club, however, stating that ”Richmond have proved that a club can compete in the Championship with a semi-pro model, and I firmly believe we can make this work in 2017.” Although, Richmond currently lie rooted firmly to the bottom of the table.

ANALYSIS

This is a very sad day for one of the most historical clubs in Britain, but it holds a lesson to those who chase the Premiership dream. You MUST stay within your financial limits or face losing the club altogether down the line.

It again posts the questions of whether the Premiership should be ring-fenced or extended and then ring-fenced. The Championship is not a financially stable stepping stone into the Premiership with Jersey, Richmond and the Cornish Pirates all struggling with financial difficulty this season or in seasons past.

With hindsight, London Welsh should have thought more carefully about chasing the premiership dream without having a backer who could support the hefty costs it employs.

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2 COMMENTS

  1. Robert, please correct the last paragraph of your analysis. Jersey and Pirates have indeed had their financial problems recently, which speaks to the unsustainable format and structure of Tier Two English rugby. However, nothing could be further from the truth in the case of Richmond. The club is in rude financial health and was wholly sustainable even without the RFU’s payment to Championship clubs (although the additional costs of playing at this level make that money absolutely necessary). The true picture is that Richmond may well be the ONLY Championship club that is financially secure because its players all have careers outside rugby and are not professional sportsmen. I would be happy to explain this to you in greater detail. As it stands your post is completely wrong about a club which the RFU acknowledges represents an admirable model for rugby clubs below the Premiership. Please amend it. Many thanks.

  2. I would add that where your post talks about “seasons past”, if that is supposed to refer to Richmond, it is unjustified and misleading without considerable further clarification by you. Richmond’s “financial struggles” occurred about 18 years ago, were in the Premiership not the Championship and in fact were the precise reason why the club rebuilt itself on its current model, and therefore cannot fall into the tragic position of London Welsh.

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