USA Rugby has filed for Chapter 11 bankruptcy, citing a significant loss of revenue from “spring and summer membership dues, sponsorship drawbacks and additional revenue sources”.
The governing body had been struggling with their finances throughout 2019.
“Existing financial challenges have been accelerated by the impact of the Covid-19 pandemic on rugby activities,” read a statement released on Monday night.
World Rugby are to supply a “financial support package” to allow the organisation navigate a course through the expensive legal process and to help create a significantly trimmed down governance structure.
The men’s and women’s national teams, in 15s and Sevens, will continue “to compete as normal” when rugby returns after the pandemic.
This will concern all tier two rugby nations – especially at a time when tier one nations face severe cash flow issues due to the outbreak – but it is worth noting the USA Rugby statement added:
“Given the ongoing financial challenges following a 2019 budgetary overspend, the unplanned loss of income advanced an insurmountable cash flow deficit and immediate action needed to be taken in order to sustain operations within USA Rugby and the rugby community.”