Premiership club Worcester Warriors are understood to be on the verge of administration following a winding-up petition over unpaid tax.
BBC Hereford & Worcester report that it could happen this week, possibly even as early as Monday.
Warriors are owned by Jason Whittingham and Colin Goldring, who are directors at EFL football club Morecambe.
The club have sought new funding but have had “unavoidable delays” following positive Covid-19 tests to key people.
If Warriors are forced into administration, they would be the first Premiership club to do so since Richmond in 1999.
It comes at a time when fellow Midlands club Wasps are also in dialogue with HMRC – and there are also reports that other Premiership clubs might be in financial trouble too.
Financier Whittingham and lawyer Goldring became co-owners of Warriors in December 2016 – six months after they took over Morecambe.
Neither of the two directors, nor the club, have yet responded to requests for comment from BBC Hereford & Worcester.
Part of the club’s Sixways site lies within the constituency of Sports Minister Nigel Huddleston.
He has told BBC Hereford & Worcester that he has not had any direct role relating to Worcester, but that he is “concerned and paying attention to developments”.
As a local MP he is sidelined from being part of any decision-making process on Warriors – but the Department for Culture, Media and Sport have confirmed that the club benefited from an undisclosed-sized loan from Sport England, as part of the government’s sports survival package to help clubs through the coronavirus pandemic.
The Rugby Players Association, which represents over 800 players in England, said it is “monitoring the situation closely” at Worcester and in contact with Warriors, the RFU and Premiership Rugby about any further developments.
“The wellbeing of our members is at the forefront of our minds and we are in contact with the players about this,” the union added. “We will continue to be there to offer advice and support.”
Unpaid tax could be £6m
BBC Hereford & Worcester’s James Pearson
After a weekend of rumours and speculation, it’s widely expected the club will be put into administration this week, possibly as early as Monday.
On Tuesday, 16 August the company running Warriors’ operations – WRFC Trading Limited – was handed a winding-up petition by HMRC.
While the company’s accounts for 2020 show it had yet to pay £2.3m in taxes, its 2021 accounts are now overdue. The current figure for unpaid tax has been reported by some newspapers as being as high as £6m.
The day after Warriors were hit by legal action for unpaid taxes, the directors used another of their companies to purchase the club’s car park, for just £50,000.
As well as being directors of WRFC Trading Limited, Colin Goldring and Jason Whittingham are also directors of a number of other companies, including Mq Property Ltd.
On Wednesday, 17 August Mq Property Ltd completed the purchase of the freehold of the club’s car park. This was paid for with a loan from another company, Triangle Estate & Petroleum Ltd.
Separately in June, training pitches owned and used by Warriors were sold to a newly-created real estate company, Worcester Capital Investments Ltd, for £350,000.
The car park and pitches are sizeable parts of the Sixways site.
Warriors’ accounts for 2020 state that as a whole the site had been independently valued at £16.7m. That estimate includes Sixways stadium; the freehold of which also now belongs to Mq Property Ltd.
Unlike indebted WRFC Trading Ltd, Mq Property Ltd is not known to face a winding-up petition, yet it now owns the bulk of the land the club sits on.
It’s unclear whether the £50,000 purchase of the car park was an undervaluation. Its value – and that of the training pitches – will depend on what restrictions are in place on the land, as well as how easy it is to develop.
Warriors’ 2020 accounts describe how the planning potential for the Sixways site had been ‘significantly improved’.
In recent months Goldring and Whittingham have also set up three other new companies, Sixways Medical Limited, Sixways Property Limited and Sixways Stadium Limited. They have not revealed the purpose of these firms.
‘Never kicked on’
Worcester began their journey to try to become a force in English club rugby when former owner Cecil Duckworth got involved with the club in 1997. He injected the funds to engineer a first promotion to the Premiership under coach John Brain in 2004.
But Warriors have never kicked on from there, have twice been relegated – and have never finished higher than eighth in their 16 years in the top flight.
In that time, Exeter, a club of a similar stature, have won the Premiership twice and conquered Europe.
Long-time benefactor Duckworth reduced his involvement in 2013, when Sixways Holdings Limited took over, under Greg Allen.
Duckworth remained part of the new board as club president, until his death in 2020. By then, the club had been sold to a four-man consortium fronted by Jed McCrory in October 2018, until he left in June 2019.
Dressing room reaction – ‘Careers are being affected’
Worcester’s seven-times capped England centre Ollie Lawrence responded on Twitter to the growing rumours in the media and social media.
“Before anyone decides to state/complain that I’m slating the reputation of the people that pay our wages… I’m really not!
“They invested in the club & tried to “create change” so can’t fault that. But Cecil Duckworth created a legacy for this club, and that is close to being tarnished currently.
“There just comes a point where people’s careers/livelihoods/families are being affected. I believe that should be answered for.
“I have nothing but respect for the whole players and staff for continuing to pitch up every day with all this uncertainty.
“The rumour mill will continue but it’s above us now as to what happens. For now, we’ll crack on as a team and wait to see what unfolds.”
