Premiership clubs want to defer repayment of £100m in emergency Covid loans amid rescue effort

Premiership clubs are lobbying the government to defer the repayment of Covid-era emergency loans, as they continue to operate on a financial knife-edge.

The top flight has been reduced to 10 teams following the collapse of Worcester, Wasps and London Irish last season – and those still afloat are grappling with a mountain of debt. 

It is understood that a collective sum of around £100million is owed to the Government for funds which were handed out during the pandemic, and that repayments are due to begin soon. Some clubs may have even made initial instalments already.

But as club owners were due to meet on Thursday, their hope is that they can secure vital breathing space – to ensure that they are not obliged to tackle the loan deficit while their positions are almost universally precarious. 

Sources have told Mail Sport that the mood among clubs officials is that the Government has a duty to support the sport, as is the case in France – and that it would also serve to protect a return of approximately £80m per year in tax from the Premiership elite.

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All the clubs owe different amounts, but across the board it is being viewed as a looming problem. Their hope is for a deferral which would also involve the suspension of interest – to prevent the debt from continuing to rise pending the start of repayments – or at least a reduction in interest levels.

Last month, it was announced that DCMS (the department of Digital, Culture, Media and Sport) has appointed two independent advisors to help the sport tackle its financial problems, following the demise of Worcester, Wasps and London Irish. 

The advisors – former Rugby Football League chief executive Ralph Rimmer and Chris Pilling from UK Sport – are compiling a report which is likely to be published imminently. Clubs hope it will recommend delaying loan repayments.

Owners held talks amid optimism about the prospects for a 10-team league, with fewer weekends where there is overlap between Tests and domestic fixtures. 

However, there has not been unanimity when it comes to the thorny issue of the salary cap. As it stands, that is due to revert to £6.4m, from the current £5m threshold, for the 2024-25 season onwards. But there is a stark divide in relation to the spending limit.

It is understood that four clubs – believed to be Bath, Bristol, Exeter and Saracens – have resisted calls from several rivals to maintain the cap at the current, lower level; to ease financial difficulties. With such a significant contingent opposed to maintaining the status quo, it means there is very little chance of achieving the majority vote needed to force through that motion.