(Reuters) -Jersey Reds, who won the English second division Championship last season, have ceased trading amid financial difficulties, the club said on Thursday, warning liquidation was “inevitable unless a solution can be found in the very short term”.
The club said in a statement that they ceased trading on Wednesday and would be unable to pay September salaries due this week, adding that uncertainty over the future of the second tier was one of the difficulties in securing funding.
Reduced funding from the Rugby Football Union (RFU) in early 2020 and further costs incurred during the COVID-19 pandemic created a “challenging landscape,” the Reds said.
They are set become the latest English rugby club to fold after Premiership teams Wasps, Worcester Warriors and London Irish all entered administration in the last 12 months.
“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,” club chairman Mark Morgan said.
“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.”
The Reds also said they will not travel to England to face Cornish Pirates in their Premiership Rugby Cup tie on Friday.
‘DEEPLY CONCERNED’
The RFU said it was “deeply concerned” after being informed of the Reds’ decision and was working with the Rugby Players Association to support the players, adding that Championship clubs had “clear confirmation” on funding for the 2023-24 season.
“It is extremely disappointing that investors would take decisions at this early point in the season to place the club in such a position,” it said in a statement.
“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.”
Jersey Reds have been in the Championship for 11 seasons after promotion from the amateur levels of English rugby.
In 2022, Jersey Reds separated the professional side of the club from the amateur Jersey RFC operation “in order to safeguard the future of amateur rugby in Jersey”.
“There are a large number of players, coaches and other members of staff who have made huge contributions to the club in recent seasons, and we regret the massive effect this will have on all of them,” Morgan said. “It’s a very sad day.”
The Reds are the first Championship side to cease trading since London Welsh went into liquidation in 2016.
“This news will clearly impact the season for the Championship league and Premiership Rugby Cup competition,” the RFU said.
“Further information on the impact of this to the Premiership Rugby Cup and Championship League season will follow.”
(Reporting by Hritika Sharma in Hyderabad; Editing by Ken Ferris)
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