The risk in question is that all, or part, of the stadium’s assets – which are valued at c. £270 million – could be acquired by a private equity company like CVC, leaving the RFU’s control of its main source of revenue either redundant or severely compromised.
This scenario is given increased weight by our front page news exclusive today that the RFU is forecasting a loss of more than £40m next season, on top of the likely £10m deficit this season.
Those figures can be massaged and finessed by chief executive Bill Sweeney, but it will not fill the hole, and the danger for the RFU is clear and present because the banks with which it has loan arrangements will not miss the warning signs.
The bottom line is that the RFU’s failing finances could prompt banks to call in the debt if the net worth covenant between them and English rugby’s governing body looks as if it will be broken. The covenant states that the RFU’s net worth must not drop below £160 million. If it does, the banks will call in the debt, and this will force the RFU to sell assets to repay it.
The most worrying outcome is that Sweeney and the inept RFU board, which governs RFU financial policy, will then go cap-in-hand to private equity giant CVC for the bailout money by using Twickenham as collateral.
The obvious question with Twickenham is whether CVC’s best interests are those of the RFU, and more specifically its 1,400 member clubs. They would have to vote on any changes to their ownership of the ground – and the thunder of a deafening ‘no’ can be heard already.
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