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Jersey Reds is on the brink of liquidation after the club ceased trading yesterday evening – admitting that it would be unable to pay September salaries due this week.
The club enjoyed its most famous day at the end of last season, clinching the Championship title for the first time, but have now confirmed that "liquidation appears inevitable unless a solution can be found in the very short term".
Jersey Reds will also not be travelling to south-west England tomorrow to fulfil the scheduled Friday night cup fixture against Cornish Pirates.
Jersey Reds regret to confirm that the club ceased trading yesterday. Details: https://t.co/41HRYoPiq9 ???????????? pic.twitter.com/eGwgkCbBsu
— Jersey Reds (@JerseyRedsRugby) September 28, 2023
The club's chairman Mark Morgan described it as a "very sad day".
He said: "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.
"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."
Mr Morgan added: "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."
In a statement, the Jersey Reds explained that tier two clubs have faced mounting financial challenges since the RFU first advised of major funding cuts in early 2020, prior to the onset of covid-19. The pandemic then brought further cuts, with the challenging landscape for Championship clubs now having lasted for almost four years.
Mr Morgan said this week’s developments vindicated the 2022 move, supported by club members at an Extraordinary General Meeting, to separate the professional arm of the club from the amateur Jersey Rugby Football Club in order to safeguard the future of amateur rugby in Jersey.
The RFU has hit back, describing it as "extremely disappointing that investors would take decisions at this early point in the season to place the club in such a position".
The governing body said it is "deeply concerned" by the news and added that the Reds "had clear confirmation" on how much funding they would receive before the start of the season.
The statement continued: "This news will clearly impact the season for the Championship league and Premiership Rugby Cup competition, which was introduced this season as a way to offer a new format to supporters, bringing with it the experience of playing Premiership sides and the opportunity to welcome new fans into Championship clubs and assist them to grow new audiences.
"Further information on the impact of this to the Premiership Rugby Cup and Championship League season will follow."
Reds' key sponsors Santander commented: "We are all deeply saddened to hear the news about Jersey Reds and our thoughts are with the players, coaching staff and management team at this incredibly sad and difficult time.
"Our sponsorship agreement is a matter for ourselves and Jersey Reds, and we don’t wish to give any comment on this morning’s announcement at this moment in time."
The financial difficulties resulted in an even more difficult situation than the position encountered in November 2016, when cumulative losses made it necessary to raise £1.5million through a sale-and-leaseback agreement covering the club’s assets.
Other details covering the implications of this news have yet to be finalised, but are expected to emerge in the coming days and weeks.
Sad thing about the Jersey Reds news is some will be like ‘it’s just sport’.
— Daniel Andrade (@d_andradesport) September 28, 2023
Real people are involved, people with jobs they’ve now lost. People who have trained so hard in their profession, be that players, coach, physio etc.
It’s more than just sport. Hope they have support.
Devastated. Having watched the club grow from a distant amateur club to one of the best in the land. We should be in the Prem this season. I am proud to have played a small and insignificant part in making jersey reds what they are. I can’t understand how we got to this stage ????
— JAMES HEWLETT (@hoffsports) September 28, 2023
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