Liquidation of Bradford Bulls: Red Rag to Financial Mismanagement?
Last week, the world of Rugby League was rocked by the news that Bradford Bulls, one of the giants of the game in the UK, had been placed into liquidation with reported debts of £1m and funding shortfall of a further £1m.
On a purely financial front, the liquidation may not have come as a huge surprise, given that the Bulls had, as recently as November 2016, been placed into administration in order protect them from a winding-up petition brought by HMRC for unpaid taxes, the third time that it had occurred in just 4 years. Despite reported interest from different consortia, and the appointed administrator rejecting a recent bid to purchase the club, Bradford Bulls (as was) has now ceased to exist.
Indeed, in reaction to the news, the Rugby Football League (“RFL”), the governing body of Rugby League in the UK, noted in a statement that, whilst the news was
“terribly disappointing and sad, it is not an entirely surprising development given the scale of debt incurred by the previous management of the club and the debilitating level of financial commitment already entered into for 2017“.
However, on a sporting front, the Bulls’ predicament has grabbed the headlines. A team that dominated the early years of Super League, and were crowned world club champions as recently as 2006, has suffered a spectacular (and saddening) fall from grace. Having endured the ignominy of relegation in 2015, the first time the club had been out of Rugby League’s premier division in 40 years, Bradford had failed to regain its place in the Super League, further exacerbating the club’s already precarious financial state.
The RFL has already made clear its position in respect of the potential resurrection of the club, stating that
“the wider interests of the sport is best satisfied if it offers a place in the Kingstone Press Championship to any new club in Bradford and that such a club start the 2017 season on minus twelve points“,
with the aim that a new Bradford-based side would be in a position to commence its campaign in the Kingstone Press Championship (the second tier Rugby League competition in the UK) on 5 February 2017.
In a further statement, the RFL subsequently confirmed that it had sought “expressions of interest to set up a new professional rugby league club in Bradford“, with bids to be made by 12.00 on Monday 9 January 2017. It also specified the conditions that any new owner(s) of the club would have to fulfil, which included:
A business plan, which should include a 3 year budget forecast along with proof of supporting funds;
Details of the experience the individuals have in running rugby league clubs and/or other sporting clubs;
Completed fit and proper person forms for each proposed influential person; and
Confirmation the directors or shareholders of the new company are prepared to provide personal guarantees the club will complete its fixtures in 2017, 2018 and 2019.
The RFL also set out a non-exhaustive list of factors it will take into account when considering any bids that are received, which would include:
The interests of the sport (including its reputation and the need to promote the game of rugby league generally);
The interests of RFL members and/or participating clubs in the RFL’s competitions;
The integrity and continuity of competitions;
The interests of players;
The financial resource it is proposed is committed by the proposed owners; and
Any other relevant matters brought to the RFL Board’s attention.
The Rugby League community’s reaction to the RFL’s stance has been mixed. Some have praised the RFL’s transparency in its handling of the affair, pointing to the above referenced public statements, which were swiftly-released following the news of Bradford’s liquidation being made public, by way of example. In addition, the RFL may have decided to adopt a pragmatic approach in allowing any revived Bradford side to take the now-liquidated former club’s place in the Kingstone Press Championship, on the basis that it would be unfair to ask a side from League 1 (the bottom professional tier of Rugby League) to commence a bruising campaign at a higher level on such short notice.
However, others have criticised the RFL for not placing a resurrected Bradford side into League 1, not least when the coach of at least one of the sides in that division, the nascent Toronto Wolfpack (who are about to embark upon their maiden season in League 1), has confirmed that they would be prepared to take the step up if given the opportunity to do so.
Indeed, some Rugby League enthusiasts have argued that the RFL should have looked to Scottish Football for a precedent as to how to address the problem posed by Bradford’s liquidation. When Rangers FC (or more precisely Rangers Football Club PLC) entered liquidation in October 2012, the resurrected club subsequently had to start life in the bottom tier of the Scottish football league, trading as a new company, namely The Rangers Football Club Limited.
However, the position with Rangers FC was different to the predicament now faced by the RFL and Bradford. After the Scottish Premier League (“SPL”) initially proposed that Rangers FC be automatically re-entered into Scottish football’s top division, the other clubs in the SPL rejected the proposition by a resounding 10-1 vote. A subsequent proposal for Rangers FC to join the Scottish Division One was also rejected by members of the Scottish Football League (“SFL”), albeit the new club was allowed to join the SFL as an associate member and commence life in the lowest professional tier.
In contrast, the RFL has already confirmed that it will have total “discretion” when making a decision on any proposals to create a new Rugby League club in Bradford, a decision that, once made, will be final with no right of appeal. Such discretion was not at the disposal of either the SPL or SFL when faced with the liquidation of Rangers and the impact it had on the Scottish football pyramid.
Regardless, some Rugby League fans believe that there should be some form of sporting “punishment” for the financial mismanagement of a club, not least given that the demotion to the bottom tier of professional Rugby League would send a strong signal to the owners of other Rugby League clubs that they need to be run on a financially prudent basis. Having started in the bottom tier, the resurrected Rangers FC has risen through the leagues and are now back in the SPL, whilst a precedent (of sorts) has now been set in Scottish football.
However, others may believe that any resurrected Bradford side (which would be lumbered with an automatic 12 point deduction should it be in a position to commence its Championship campaign) may have suffered enough, with the prospect of relegation to League 1 a real possibility in any event.
The RFL now finds itself in a predicament that it no doubt wishes it did not have to address, as one of the giants of Rugby League faces an uncertain future.