What's really going on at Wasps - Rugby Insider

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Having twice suffered heavy defeats at Allianz Park last season, injury-hit Wasps will be delighted to welcome their international contingent back to face Saracens next weekend.

However, when the time horizon shifts from months to years, based on events of recent weeks, it is hard to be as positive about Wasps’ situation.

A few days after they declared 2017/18 losses of £9.7 million, which increased their overall debt level to a whopping £55.8 million, the Rugby Paper linked British Lion Daly with a move to English champions Saracens.

Director of rugby Dai Young quickly advised the media that his prize asset, who has been at the club since leaving Whitgift School, is contracted beyond this season. But while this is undoubtedly the case, it still may not signal the end of the matter due to the uncertainty surrounding the club’s medium-term viability.

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Six years ago, Wasps were rescued from death row by former online insurance entrepreneur Derek Richardson, only a matter of hours before they were to be wound up.

Since then the club has relocated to Coventry, where a £35 million bond issue enabled it to buy the Ricoh Arena from Coventry City Council and a local charity who had co-owned the 32,000-capacity venue since its inception.

By and large the people of Coventry and Warwickshire have taken Wasps to their hearts, as attendances of around three times the level achieved at its former home at Adams Park have shown.

However, as many small business owners will attest, increased turnover does not necessarily equate to more profit, and despite harnessing Premiership rugby with a well-located exhibition and hotel venue and a title-winning netball team, Wasps’ losses continue to mount.

In that respect, their financial year 2017/18 was more than three times worse than the annual deficits which derailed the Wycombe-based club that Richardson rescued. After four years in the Midlands, losses surely can no longer be attributed to one-off restructuring, so something significant has to change.

While no-one doubts Richardson’s generosity, his well-meaning approach or his total commitment to Wasps, in elite sporting terms his pockets are far from bottomless. Estimates of his net worth vary, but the £18.6 million he is now owed by the Coventry club seems likely to be somewhere between 30 and 50 per cent of his personal fortune.

The club’s total debts now almost match the £60 million valuation placed on its main asset – the Ricoh Arena – while revenue has flattened out and costs have not reduced. Simply put, Wasps have little room for financial manoeuvre, since their ability to secure borrowings is limited and their owner is burning through his own cash at an alarming rate.

On top of their liquidity issues, Wasps’ hands are also partly tied by the ongoing legal wrangle between SISU, the parent company of Coventry City FC, and Coventry City Council regarding their purchase of the Ricoh.

With Ricoh’s original naming rights deal reportedly now expired, bringing in a high-profile replacement is an obvious revenue opportunity. However, finding this business partner cannot be easy with the spectre of the Supreme Court looming large. Further, even if Richardson wants a new investor in harness alongside him, who would risk being dragged into the middle of an unseemly legal row which has now gone on for years?

Wasps followers will therefore hope that 2019 brings progress on two key off-field fronts. Firstly, the Supreme Court could finally put an end to the legal uncertainty which is hand-cuffing the club by confirming the court-room decisions previously made.

And in addition, the mooted sale of 25 per cent of Premiership Rugby Ltd to an external investor would generate an eight-figure sum for each of its 13 shareholders, and in the process boost Wasps’ balance sheet and buy them more time to turn around their trading position.

None of these financial issues have prevented Wasps’ owner from investing in his team, where Charles Piutau, Kurtley Beale and Willie le Roux have been followed by current imports Lima Sopoaga and Shields.

But as the Daily Mail highlighted earlier this year, investment in off-field structures have been substantially slower paced. In areas like strength and conditioning, medical support and analysis Wasps’ staff-to-player ratios lag behind those enjoyed by their rivals. Young is also operating a coach light following Danny Wilson’s eleventh-hour decision to join Scotland instead of moving to Coventry.

Linked to this, and at the heart of the Daly-to-Sarries rumour, is the question of training facilities. As highlighted by James Haskell’s vociferous social media posts late last season, this is rumoured to be a significant source of discontent for Wasps’ senior players.

Young’s playing staff train at Broadstreet RFC, which is reported to have good facilities for a junior club, supplemented with Wasps’ temporary buildings. While this venue is not significantly worse than a number of their Premiership rivals, in persuading his players to leave London for the Midlands in 2014, Richardson promised world-class facilities to match those enjoyed by the likes of Bath and London Irish.

Four years later, very little progress has been made, which has led a number of Wasps’ senior players to privately voice opinions similar to those of their former skipper, who experienced a big shift in position after once being at the owner’s right hand fronting the move to Coventry.

According to the Mail’s story, these words have been matched by actions in the last 18 months, as a small number of Young’s biggest names have inserted release clauses linked to those to-date unfulfilled promises when their contracts have come up for renewal.

In recent months, Wasps have begun discussions with Old Leamingtonians to build a permanent training ground. However, nothing has yet progressed beyond the planning stage, and given the club’s debt levels, doubts must exist regarding the funding of a £5 million-plus project.

In turn this may explain why the vultures are circling around Young’s prime playing assets despite them being in contract beyond this season.

Watch this space, the clock is ticking.

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