London Wasps saved as £500k tax bill is paid

New Wasps owner Derek Richardson had to settle an outstanding tax bill of £500,000 before completing the long-awaited takeover of the London club on Friday.
The deal, which was agreed at the 11th hour after the tax problem was overcome, ends a period of uncertainty that has surrounded Wasps since former owner Steve Hayes elected to sell the club in 2011.
Irish businessman Richardson – reportedly a “keen rugby supporter” – had been in negotiations since last year and in January lent the club around £1m to ease cash flow and debt problems, ensuring players and staff were paid.
Hayes, who took ownership of the club in 2008, announced he was pulling out after plans to build a new stadium, housing and retail park at Booker Airport, on the outskirts of Wycombe, fell through when planning permission was denied.
The last available accounts reveal Wasps lost £2m in season 2010-11, which followed losses of £3.1m in 2009-10. Up to that point Hayes had lent the club £8.45m.
Whether Hayes recovered any of that money remains unclear.
Richardson’s priority will be to stabilise a business which has been haemorrhaging money since the glory days of the mid-Noughties when Wasps ruled Europe.
In five completed seasons from 2006-07 to 2010-11 the club reported operating losses totalling £11.87m, and in 2011 auditors indicated “material uncertainty” over the company’s ability to continue as a going concern. The announcement of a new main sponsor is believed to be imminent, but with gates at Adams Park dropping below 7,000, the issue of finding a new home, preferably in west London, will also be high on Richardson’s agenda.
Preliminary talks have taken place with Brentford FC over sharing their proposed new 20,000-capacity stadium at Lionel Road in Kew. In the meantime Wasps are committed to staying in Wycombe for another two years.
Without Richardson’s support it is unlikely Wasps could have survived, and relegation from the Premiership last season might have spelt the death knell for a club that have notched five Premiership titles and two Heineken Cup wins.
But the recent signings of Matt Mullan, Andy Goode and Josh Bassett, allied to the re-signing of talented young stars like Elliot Daly and Christian Wade, indicate new-found optimism.
A source close to the negotiations told The Rugby Paper: “Derek Richardson is a saviour. He’s a quiet man, a good man, and the important thing now is that everybody at the club gets behind him.”
Richardson said: “I am excited to have become involved with London Wasps, a Club I believe has a fantastic opportunity to move forward on and off the pitch. I see my involvement as a big responsibility and this is a long-term challenge which I want to meet head-on. The Club has been through some tough times but I am confident that, with the right management and commercial focus, new investment can really reinvigorate everything about London Wasps. Financial stability is our immediate focus and our aim is to become a self-sustainable business within a number of years. We are now looking at developing a longer term business strategy with the ultimate aim of ensuring we achieve that goal. On the pitch I am also very enthused about where we are headed. In Dai Young I believe we have a world-leading Director of Rugby and the progress being made by the squad is exciting for everyone involved.”
London Wasps CEO Nick Eastwood said: “It is fantastic news for everyone involved with London Wasps that today we can put a full stop to the uncertainty that has hung over the Club in recent years. While we have managed to make some progress this season financially, Derek’s involvement from here on in means that our business is now in very safe financial hands. He has an excellent track record in developing successful businesses and he sees a real opportunity to take this Club forward through sound investment and a smart commercial strategy. A key piece of the jigsaw in ensuring that London Wasps becomes a sustainable business will of course be owning or co-owning our own stadium, although that is much further down the line.”
NEALE HARVEY