Wasps ask for millions of pounds of public money

Wasps acquired a 250-year lease on the Coventry Building Society Arena - then known as the Ricoh Arena

Rugby club Wasps have asked for millions of pounds of public money as financial strain builds on their stadium business.

The West Midlands Combined Authority (WMCA) is considering a funding application for about £13m, the BBC has learned.

The authority stated "any formal submission for decision has not been reached".

Wasps have not yet commented on why an application for money has been made.

The rugby club has delayed repaying bondholders, who invested at least £2,000 each, to help it raise £35m in April 2015.

That bond scheme was launched shortly after Wasps acquired a 250-year lease on the Coventry Building Society Arena - then known as the Ricoh Arena.

Most of that money was used to pay off previous debts, including a £13.4m loan from Coventry City Council and £10m of loans from Wasps owner Derek Richardson.

Bondholders should have been repaid in May this year, but Wasps announced last month they would push the repayment date back until the end of June.

The club said that was to allow them time to finalise terms with bank HSBC to refinance that bond debt.

Stephen Vaughan, chief executive officer of Wasps, released a statement at the time, which said they were "pleased to have agreed" a deal with the lender.

"We thank bondholders for their continued support and look forward to updating them further in due course," he added.

Coventry City Football Club returned to the stadium last year

Wasps have not yet commented on why an application for money from WMCA has been made or whether it impacts on the refinancing arrangements.

A spokesperson for ACL, the stadium business owned by Wasps, said: "We do not comment on commercially-sensitive matters."

A statement from the WMCA said there had been an approach to the authority, via Coventry City Council, "which, as with all financial requests of this nature, is currently being considered through the appropriate channels".

It added this was "at an early stage of consideration and any formal submission for decision has not been reached".

The WMCA stated: "Given the commercial nature of the request, no details can be shared at this stage."

Coventry City Council told the BBC: "The city council, including through the chief executive and senior officers, has regular communication and dialogue with many businesses and this has been particularly important throughout the pandemic as the economic context has been incredibly challenging.

"Wasps have been one of these businesses."

The council said as part of "discussions with Wasps, officers did signpost to the WMCA".

Wasps have finished outside the Gallagher Premiership top six for two successive seasons

The Arena business has struggled financially since Wasps relocated there in 2015.

The latest set of filed accounts from November 2021 show losses of about £18.5m over the past two years and net liabilities of £54.7m.

Those accounts also state that if Wasps are unable to repay bondholders, the business would be forced to sell assets to finance the debt.

The bondholder debt was initially secured against the value of the Arena, which was most recently valued at £52.4m last year.

Coventry and Warwickshire Local Enterprise Partnership has previously handed over £5.2m in grants to Wasps to build a new sports bar and improve the Arena ahead of hosting Commonwealth Games events this Summer.

Warwickshire County Council told the BBC it could not say whether any application for funding had been received due to "commercial confidentiality".

Analysis by Simon Gilbert, BBC CWR political reporter

The involvement of Coventry City Council in trying to secure funding for Wasps could open old wounds.

People following this story over the past 10 years will remember Coventry City Council bailed out the stadium operating company with a £13.4m loan in 2013.

That decision angered the owners of Coventry City Football Club who ultimately left the stadium and the city twice.

It also prompted multiple lengthy and costly legal battles over that loan and the subsequent sale of the stadium business to Wasps.

The football club returned to the stadium on a 10-year deal last season - in a deal brokered by WMCA mayor Andy Street - and the legal action over the stadium finally came to an end.

Sky Blues owners Sisu are not commenting publicly on these latest developments, but fans will be concerned about the potential fallout if the stadium company benefits from another taxpayer bailout.