English rugby’s financial crisis deepened on Thursday with Jersey Reds announcing they have been forced to stop trading and are on the brink of being wound up.
The club won the Championship last season and were due to play Cornish Pirates in the Premiership Rugby Cup on Friday, but said they have been forced to cease trading with no prospect of resuming unless fresh investment is urgently found.
A club statement read: “Jersey Reds regret to confirm that the club ceased trading at 5.30pm on Wednesday September 27th and is exploring the way forward. However, liquidation appears inevitable unless a solution can be found in the very short term.”
The club acknowledged they would be unable to pay wages for September that were due this week and would not be travelling to fulfil night’s fixture. The chairman of Championship Rugby, Simon Halliday, called the news a “tragedy”, adding that “persistent uncertainty” over Rugby Football Union funding was to blame.
In their statement, the club highlighted uncertainty about the future of English rugby’s second tier as one of the difficulties in securing funding. The Jersey Reds chairman, Mark Morgan, said: “We had been able to start the season and maintain sufficient funds to cover the summer, but regret that our conversations with potential new investors as well as existing ones have been unsuccessful.
“At one stage at the end of last season it appeared there was a viable way forward for the second tier once the new professional game agreement was implemented from summer 2024, but Championship clubs have been left in the dark since that point and this led to a growing fatigue among those who may have invested, but could not be given any concrete assurance about when the new structure would come in, or how it would be funded.”
Responding to Thursday’s announcement, the RFU said in a statement: “The RFU has been informed that Jersey Reds has taken the decision to cease trading following unsuccessful discussions with both existing and potential new investors. We, like their players, staff and supporters are deeply concerned by this news. The RFU is working with the Rugby Players Association to support the players.
“It is extremely disappointing that investors would take decisions at this early point in the season to place the club in such a position. Championship clubs had clear confirmation from the RFU on funding for the 2023-24 season and we have been working with the Championship and Premiership Rugby on the new Professional Game Partnership and shape of Premiership 2 with funding levels to be confirmed at the end of this calendar year. The Championship has been fully involved in these discussions since February which are aimed at stabilising and strengthening the professional game.”
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It is understood that Jersey Reds’ existing investors privately felt the lack of RFU assurances over the importance of Championship clubs’ survival – and the failure to restore their funding to pre-Covid levels – made it impossible to continue.
Halliday, said: “This is a tragedy for Jersey Reds, its players, staff, fans and investors, and the Championship sends its sympathy to the club and everyone connected to it. It is a disaster that our current champions, a standard-bearer for our values as a league, have had to take this decision.
“Anyone who loves rugby should listen very carefully to the message being sent by the investors in Jersey Reds, through their decision to withdraw support, about the funding of the crucial second tier of the game. The message is that persistent uncertainty over central financial support from the RFU for our league has made it impossible for them to carry on. In essence, they have said: ‘If the governing body won’t commit to you, why should we?’”
The impending collapse of the second-tier champions is just the latest heavy blow in a disastrous time for domestic rugby. In the Premiership, Worcester Warriors, Wasps and London Irish all ceased trading in the past year, leaving a reduced 10-team top flight that is scheduled to begin on 13 October.
The news will further increase scrutiny on the RFU chief executive, Bill Sweeney, and the chairman, Tom Ilube.
In a letter signed by 30 RFU council members sent on the eve of England’s opening Rugby World Cup match against Argentina, they were accused of inadequate leadership by almost half of the organisation’s council members.
Early in 2020 the RFU slashed funding for Championship clubs by 50% with further cuts made since, while relegation from the top flight is suspended, making life all the more difficult for clubs in the second tier.
