Worcester and Wasps should lose their Perpetual Shares in Premiership Rugby after going into administration, says Exeter boss Rob Baxter.

Both Wasps and Worcester were ‘P Share’-holders in the league.

The pair have been suspended from the Premiership and relegated as a result of their financial problems.

Supporters of both financially stricken clubs have urged Premiership Rugby to allow them to keep their ‘P Shares’ in order to make them more attractive for potential new investors.

Exeter were promoted in 2010 without a ‘P Share’ and paid Leeds around £5m a decade ago to take theirs – which at the time accounted for around 25% of the money the clubs got from central revenues.

The shareholding allows clubs who are relegated to the Championship to still have a financial gain from the top flight – Bristol retained their ‘P Share’ money for the eight seasons they were in the Championship between 2009 and 2018.

“The alternative is a rugby club in the Premiership can go into administration, can organise a pre-pack with somebody so they don’t lose their position in the Premiership, they don’t lose their ‘P Share’, and they wipe their debts,” Baxter told BBC Radio Devon.

“Are we saying that’s what we should have done? That’s what seems to be suggested. Are we really saying that?

“Because if that’s the truth then why doesn’t every club in the Premiership that’s got debts organise a pre-pack with an administrator, go into administration, keep their ‘P Shares’, basically keep everything that’s going to be of value to them and wipe the debts of everyone they owe money to?

“That’s in effect what everyone’s saying. If you do it for one club, you’re saying that’s the right thing to do.”

Baxter says if there are no meaningful repercussions for sides that go into administration – such as taking away their ‘P Shares’ – the sport itself could run into problems in the future.

“I feel for the people at Wasps and I feel for the people at Worcester, and more than anything else I really feel for their supporters, because their supporters are just giving,” he said.

“When you’re a supporter you give your money, you give your time, you give your emotion to it, and what you get back is your entertainment and your buy-in, and that’s why you do it.

“But to sit here and go ‘we should have a system where you can wipe off your debts, but keep your ‘P Shares’ and keep your place in the Premiership’ – how can Premiership Rugby run a business that says it’s OK to go into multiple administrations every time you run into debt?

“We’d have no confidence in the business, we’d have no confidence in a TV deal. Why would a sponsor ever come in to sponsor a rugby club where, in theory, once you feel like it, you can just go into administration and wipe your debts?

“There has to be some repercussions and that was why those rules were put in place. Those rules were put into place at the start just so we couldn’t as a businesses do exactly that, we couldn’t just wipe our debts and start again with no repercussions.”