USA Rugby bankruptcy is a good thingand should have happened a year ago – SportBusiness

USA Rugbys recent Chapter 11 bankruptcy declaration was little surprise and could ultimately prove beneficial in the long term, according to Rugby United New York majority owner James Kennedy.

Late last month, the governing body for rugby union in the United States filed for bankruptcy as a result of compounded and insurmountable financial constraints.

The indefinite suspension of sanctioned activities and, in turn, loss of income streams caused by the ongoing Covid-19 pandemic has accelerated existing financial challenges facing the union.

World Rugby, the sports global governing body, will step in and implement a series of governance and financial measures to help the union find a way forward and emerge from the bankruptcy proceedings.

USA Rugby will operate with a reduced staff and budget from its headquarters in Lafayette, Colorado,through the remainder of the restructure.

It should have happened at least a year ago, if not two years ago when [former USA Rugby chief executive] Dan Payne was leaving, Major League Rugby team owner Kennedy toldRugbyPass. They were always fighting a rearguard action. There is plenty of me on the record on this, so its not Monday Morning Quarterback. Bankruptcy is what they needed to do.

It was no individuals fault, as there was chopping and changing personnel. It was a system that was just built to fail in a weird way. It was chronically underfunded and because it was underfunded it wasnt able to get the money it needed.If they got their membership policies right they would be the wealthiest union in the world, but they couldnt even do that because they didnt have the money or the resources.This needed to happen. I feel bad for vendors that are owed money, but to say the bankruptcy is because of Covid is a bit disingenuous, Kennedy said.

In November, USA Rugby revealed it expected significant financial losses in 2019. This, the national governing body said, was due to over-expenditure in its high performance program leading up to and during the 2019 Rugby World Cup, legal fees in two ongoing lawsuits, and revenue shortfalls.

Financial troubles at USA Rugby are nothing new. The collapse of for-profit subsidiary Rugby International Marketing (RIM) and the Rugby Channel, a subscription-based online streaming service which offered exclusive live and on-demand coverage of top-tier domestic and international rugby matches,almost bankrupted the union in 2018.

Its no secret that USA Rugby have been financially fed for years, the outspoken Kennedy said.

USA Rugby is now pinning its hopes on being awarded the 2027 or 2031 Rugby World Cup to transform its financial fortunes.

Bankruptcywill make the (2031) World Cup bid process easier, Kennedy said. I dont want to say any names, but the void will be filled with competent people and competent organization.

It is a good thing. I say that with respect to people that have lost their jobs, people that are not getting paid, but its a good thing for rugby in the US ultimately.If it cleans up the World Cup bid which is going on right nowanything without US Rugby involved is a better situation than having them at the table where they swear they are good when everybody knows they are not good. This is a good opportunity, he said.

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USA Rugby bankruptcy is a good thingand should have happened a year ago - SportBusiness