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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 has 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.
The club's chairman Mark Morgan described it as a "very sad day".
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
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 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.
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