ReSolve to oversee administration of rugby club London Irish

13 June 2023 Consultancy.uk 4 min. read
Profile

London Irish has become the second top-tier rugby union club in a year to fall into administration, following a financial crisis that saw it suspended from all leagues for the following season. Professionals from ReSolve have been appointed to explore the options of the club’s remaining assets.

Competitive sports of all forms were rocked by the Covid-19 pandemic – particularly in 2020, when the lockdown months meant organisers were unable to gather ticket revenues. While the highest echelons of English football have since bounced back from the financial implications of that, the elite of rugby union has found it far more difficult to do so.

Earlier in the 2022/23 season, the economic pressures this heaped on Wasps saw the historic club suspended from the Premiership division – England’s rugby union top-tier – after falling into administration in mid-October.

ReSolve to oversee administration of rugby club London Irish

Now, the same fate has befallen London Irish – having been suspended by the Rugby Football Union from all leagues after failing to provide proof of funds and ownership for next season, it has entered into administration.

Nicknamed The Exiles, London Irish was founded in 1898, following the creation of London Scottish and London Welsh for the same reason – allowing Irish immigrants the chance to play rugby union with their fellow countrymen in the English capital. In the years since, the club has often featured in the sport’s top-tier, with its highest finish seeing it end runner-up in 2009, having also won the knockout Premiership Rugby Cup in 2002.

Mick Crossan has owned London Irish since 2013, but after failing to secure a takeover from US consortium NUE Equity, headed by Californian lawyer Chip Sloan, he penned an open letter to staff, suggesting it was no longer “feasible for me to continue absorbing the multi-million-pound losses of the club”. The club’s debts stand at over £30 million, while it is also facing a wind-up petition from HMRC for an unpaid tax bill.

“Over the last seven months, I have been working closely with the RFU, PRL and representatives of NUE Equity to complete a widely publicised deal to acquire the club,” said Crossan in a statement. “As we neared the completion of the deal, I continually received promises, from both NUE Equity and Redstrike, that the acquisition would be completed imminently, and that funds would arrive within days… Sadly, the promises have failed to materialise, and, despite our very best efforts, it was not possible to meet the conditions set by the RFU Club Financial Viability Group”.

Following the news, ReSolve – an insolvency and restructuring advisory firm – has been installed to preside over the administration of London Irish Holdings and London Irish Scottish Richmond Limited. Joint administrators Lee Manning and Simon Jagger have been appointed to explore options for the business, and welcome any approaches from interested parties.

Manning, who is a partner at ReSolve, commented, “I know that this will be a very difficult day for London Irish fans, players and staff who love and support this historic club. London Irish’s company directors and major shareholders worked tirelessly to try to find a successful buyer for the club but this, sadly, was not possible. Our objective will be to ensure that as much value as possible can be preserved in the hope of securing the future of this much loved club.”

Founded in 2006 by Cameron Gunn and Mark Supperstone, ReSolve is a boutique business advisory practice specialising in corporate rescue and turnaround work. The firm was recently listed as one of the UK’s top restructuring consulting firms by Consultancy.org.

Growing concerns

With London Irish joining Wasps as the casualties of a grim financial picture for rugby union clubs, Crossan’s note to fans, staff, players and the public also warned that other clubs were also in a precarious position following the crises of recent years. With inflation and spiralling energy costs also hitting rugby union clubs hard as they struggle to recover losses from the lockdown era, Crossan called on the administrators of the game to “urgently review their practices from top to bottom.

Suggesting that owners of clubs were already working “very hard to transform their models,” Crossan alluded to a “lack of real support” from authorities in rugby union which was “at times… non-existent”.

At the start of June 2023, the Department for Culture, Media and Sport announced former Rugby Football League CEO Ralph Rimmer and UK Sport’s Chris Pilling would support the Rugby Football Union and Premiership Rugby in their efforts to reshape the game’s “future strategic financial and sporting direction” – something which Crossan said “speaks volumes”.

He concluded, “The professional game in this country needs to be radically transformed. And the current leadership must urgently review its practices from top to bottom if it has a desire to see professional rugby continue in England.”