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USA Rugby files for Chapter 11 bankruptcy amid ‘insurmountable financial constraints’

USA Rugby, the governing body for rugby union in the United States, has filed for Chapter 11 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 sport’s 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.

“This is the most challenging period this organization has faced and all resolves were never taken lightly in coming to this determination,” said USA Rugby chair Barbara O’Brien in a statement. “While the current climate is of course much larger than rugby, we remain focused with stakeholders and supporters in the continued effort toward a balanced rugby community where the game can truly grow.”

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.

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

Elsewhere, England’s Rugby Football Union has said it expects revenue losses of between £45m (€49m/$53.6m) and £50m over the next 18 months, adding that Covid-19 is set to “considerably” increase a projected loss for the financial year.