Wasps said on Wednesday that they are “likely” to enter administration, making them the latest cash-strapped team to be banned from the English Premiership.
Wasps is the second Premiership team to get a ban due to financial issues, after Worcester last month, dealing another devastating blow to the English domestic competition.
As their financial problems worsen, the four-time Premiership winners have already withdrawn from their planned Premiership match against Exeter on Saturday.
Wasps’ financial problems have not yet caused them to be demoted from the top division, unlike Worcester.
If Wasps can show they have the resources to pay their rugby creditors, they may ask for the ban to be removed.
The Rugby Football Union issued the following statement in response to the news: “The RFU’s Club Financial Viability Group convened this evening and confirmed that Wasps have been suspended from the Gallagher Premiership.
“We recognize that the news that the club is set to enter administration comes at an extremely trying moment for Wasps players, staff, and fans.
“To achieve the best solution for the club, the RFU will continue to engage with the club, PRL (Premiership Rugby), and any prospective administrator or eventual investor.”
Wasps said last month that they intended to name administrators because they are facing a winding-up order from the government due to $2 million in unpaid taxes.
Wasps, a two-time champion in Europe, said in a statement on Wednesday that “it has become evident that there is likely to be inadequate time to find a sustainable solution for the firms within the group.”
“It is thus expected that they will declare bankruptcy in the next days with the intention of closing agreements soon after.
We have consequently decided to pull the Wasps men’s squad from this Saturday’s league match against Exeter Chiefs in light of the present circumstances.
Mike Ashley, a former owner of Newcastle United, is one of the rumored parties interested in purchasing Wasps.
Wasps’ financial issue began when they missed a May deadline to pay back £35 million in loans that helped fund their move from London to Coventry in 2014.
The total debts of all 13 English Premiership clubs, including Worcester and Wasps, are projected to be more over £500 million, raising concerns that other Premiership teams may also have a gloomy future.
With the club suspended for the remainder of the season and certain to be relegated from the Premiership, Worcester’s players and employees have had their contracts terminated.