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Worcester Warriors' return provides 'litmus test' for professional club rugby finances
The return of Worcester Warriors to professional English rugby will provide a “litmus test” for how the game is being run, according to Prof Rob Wilson, co-author of the Leonard Curtis Rugby Finance Report.
The West Midlands club – who were suspended from the Premiership in September 2022 after entering administration with debts of around £25 million – will be part of a new expanded 14-team Championship next season.
Worcester have passed a tender process to enter the division and compete at their Sixways Stadium, with new owners Chris Holland and Junction 6 Limited providing a financial security guarantee, held by the RFU, as well as committing to paying off debts left by the previous owners to rugby creditors.
Prof Rob Wilson, who is a professor of applied sport finance, said: “Worcester’s return is a litmus test for English rugby’s ability to reform and retain professional clubs under tighter financial governance.
“It underscores the need for league-wide financial controls, robust owner vetting, and meaningful fan engagement, particularly ahead of any private equity reinvestment in the game’s second tier. This is less about sentiment and more about building a viable rugby economy.”
Critical time for English club rugby
The first edition of the Leonard Curtis Rugby Finance Report, published last September, came at a critical time for the sport, following the collapse of Worcester, along with Wasps, London Irish and Championship club Jersey Reds, due to financial difficulties in 2022 and 2023.
The report found that in the 2022/23 financial year, seven of the ten Premiership clubs could be classed as balance sheet insolvent, meaning they were reliant on financial support from their owners, as they were also loss-making.
Clubs racked up total losses across the league of £30.5 million during the year, with no team posting a profit, while the combined debt level across the Premiership amounted to £311.5 million.
The clubs’ financial data for 2023/24 will be included in the next edition of the report, due to be published this autumn.
Prof Wilson said the viability of Worcester’s return will largely depend on how the club manages its finances this time around as well as how its performance off the pitch is monitored.
“The key difference should be regulatory oversight and financial caution – especially given the findings of our report last year. Is there a clear intent to operate with leaner wage structures and enhanced cost control?
“The club will need to rely less on debt-led investment and more on sustainable income streams, including venue utilisation, academy development, and community engagement.”
Search for a sustainable business model
Worcester’s new owners have announced plans to increase the capacity of their stadium from 11,500 to 12,750, as well as open a new hotel, multi-storey car park, golf driving range and solar farm.
Alex Cadwallader, a Leonard Curtis director and former England U21 rugby union player, says that for Worcester to be financially sustainable it must also be able to balance the books of its rugby operations.
“Clearly, the owners are looking to generate as much non-rugby income as possible. We have seen this type of model developed in the US, where a team’s stadium is at the centre of a destination which attracts visitors itself.
“However, what our report established is that the business model for the rugby team itself needs to be sustainable. The opportunity is to demonstrate how to run a club within its means like their neighbours Gloucester, who are committed to not losing millions every season.”
Gloucester posted losses of £516,000 for 2023/24 and £544,000 for 2022/23 – comfortably the smallest loss in the Premiership that year – and their prudent financial management is widely viewed as a model for other clubs to follow.
Up to £1 million in value to league
The move to allow Worcester to play in English rugby’s second tier follows the confirmation that Ealing Trailfinders and Coventry have failed to satisfy the minimum stadium criteria for promotion into the Premiership next season.
Amid an uncertain outlook for the club game, Prof Wilson said the presence of Worcester could provide a “tangible boost” to the appeal and financial sustainability of the revamped Tier 2.
“This is clearly a strategic decision to stabilise the Championship and preserve its brand appeal – important given the failures of others to meet the requirements of the Premiership recently.
“Worcester’s presence can raise gate receipts across the league, elevate match day media interest, and potentially unlock regional sponsorships.
“If managed correctly, I’d estimate the club could contribute an incremental £500,000 – £1 million in combined value to the league ecosystem through increased commercial and broadcast engagement. There is a phoenix style story attached to this, which can generate eyes on screens, and bums on seats.”
Cadwallader added: “The infrastructure is at a level above most of the other teams and one suspects the new owners are banking on the crowds coming back to Sixways. If that is the case it will strengthen the second tier.”
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