Jersey Reds: Championship title-holders 'cease trading' with liquidation 'inevitable'
- Published
Jersey Reds' final game was on Saturday when they hosted a Premiership side in a competitive game for the first time - as they lost to Exeter in the Premiership Rugby Cup
Championship title-holders Jersey Reds "ceased trading" on Wednesday and say liquidation is "inevitable" unless funding can be found.
The Reds have competed in English rugby's second tier for the past 11 seasons, having been promoted from the amateur levels of English rugby.
Reds split from Jersey RFC in 2022 and went on to win the league and reach the Championship Cup final in May.
The club have cited costs from Covid-19 and reduced funding as causes.
Reds say they are unable to pay players and staff salaries that are due at the end of this month - despite receiving £370,000 in short-term grants from the Jersey government, to try to tide the club over until a new investor came on board.
"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," Reds chairman Mark Morgan said in a statement., external
"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."
In a statement the Rugby Football Union says it is working with the player's union, the Rugby Players Association (RPA), to support those affected.
"It is extremely disappointing that investors would take decisions at this early point in the season to place the club in such a position," the RFU said.
"Championship clubs had clear confirmation from the RFU on funding for the 2023-24 season and 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."
The Reds' Premiership Rugby Cup tie at Cornish Pirates on Friday has been called off, with the RFU to outline the impact on the competition - as well as any changes that may need to be made to this season's Championship as a result.
'We've not overspent'
Harvey Biljon (centre) led Jersey to the Championship title last year, but they were not promoted as their ground does not meet top-flight criteria
Jersey are the fourth professional side to go bust in the past year as financial problems continue to dog the sport after the Covid-19 pandemic.
Worcester and Wasps both went into liquidation early into last season while London Irish went under in June - all three have not played a game since.
The islanders had started the season well - thrashing London Scottish in their opening cup game before a historic win at Bath, and then losing at home to Exeter on Saturday.
"Right now I'm just shocked," Jersey Reds director of rugby Harvey Biljon told BBC Channel Islands.
"We have categorically stayed in our lane, we've not overspent, we have worked within budget.
"We don't pay extortionate wages, the average [yearly] wage across our playing squad is £25,000, so I'm just absolutely shocked that we're champions of the Championship and we're in this situation."
Reds had seen funding from Jersey's government come to an end this year - between 2019 and 2022 the club received £575,000 from taxpayers.
The government had planned to stop their funding, with the 2023 government plan published last year making no mention of the club, and the 2024 plan - which came out last week - also not showing any financial support.
"The previous government provided extensive financial support to the club, and Jersey Reds also enjoyed significant support during Covid," said Lucy Stephenson, the Jersey minister with responsibility for port, in a statement.
"With the welfare of players, coaches and their families in mind, in the last three months this government has twice given Jersey Reds short-term grants totalling £370,000 to provide them with the opportunity to try to find alternative funding sources. Sadly, their efforts have not been successful.
"Government could not commit further money at a time when there so many other demands on the public purse - including responding to the cost of living crisis - and in fairness to other sports and businesses in the island.
"The Reds' announcement shows how prudent it was for them to separate the professional and amateur arms of rugby. Participation in amateur rugby remains strong, and the minis, juniors, and parts of JRFC will continue to thrive. Government will work to ensure that any impact on the amateur game is minimised."
'A disaster' for Jersey Reds
Jersey are the first Championship side to cease trading since London Welsh went bust in December 2016, having twice won promotion to the top flight.
Reds' problems, so early in the season, will again focus minds on the future of the professional game in England, especially below the top tier.
"It is a disaster that our current champions, a standard-bearer for our values as a league, have had to take this decision," Championship Rugby's chairman Simon Halliday said.
"Anyone who loves rugby should listen very carefully to the message being sent by the investors in Jersey Reds, through their decision to withdraw support, about the funding of the crucial second tier of the game.
"The message is that persistent uncertainty over central financial support has made it impossible for them to carry on. In essence, they have said: if the governing body won't commit to you, why should we?
"The Rugby Football Union has been repeatedly warned that the government of the island of Jersey was concerned at the lack of financial commitment to the league in which the Reds played.
"The Championship's owners and investors will also have also noted that the Rugby Football Union's response to this tragedy was to issue a statement blaming the investors in Jersey Reds and which includes the claim that the Championship has been "fully informed" of ongoing financial discussions about the future of the professional game."
The end to a remarkable rise?
Behind the scenes as Jersey Reds prepared for what was their final game at home to Exeter in the Premiership Rugby Cup.
The rise of Jersey had been one of the greatest sporting stories in the Channel Island's history.
Having been an amateur club for many years, playing in the the lower reaches of the English pyramid, they won promotion from London South West Division Three in 2005.
They signed their first two professional players in 2006 and started to rise up through the divisions - climbing from the seventh to second tier in seven years, leading to their Championship debut in 2012.
But finances became an issue in November 2016, when the club had to sell and lease back their ground at St Peter to cover a £1.5m debt.
They bought the ground back in February 2018 and appeared to be on a sounder financial footing, but the pandemic saw a cut to funding for second-tier clubs from the Rugby Football Union from more than £500,000 in 2020 to just over £150,000.
The uncertainty extends to Jersey's playing and coaching staff - Biljon had been celebrating his testimonial year after a decade in charge of the side.
"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 that the massive effect this will have on all of them - it's a very sad day," Morgan added.