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Wasps respect salary cap

Published 27/04/2015

Wasps' move to the Ricoh Arena has already brought significant financial benefits to the club.
Wasps' move to the Ricoh Arena has already brought significant financial benefits to the club.

Wasps "are not the kind of club" to challenge the Aviva Premiership salary cap or "spend huge money" on new recruits despite joining Europe's money elite, according to their chief executive.

David Armstrong has vowed Wasps will hold firm to long-standing principles even after securing one of the highest turnovers in European rugby.

The Premiership club launched a retail bond listed on the London Stock Exchange on Monday, cementing their new status as one of the world's richest rugby clubs.

Wasps expect to raise £35million from the 6.5 per cent bonds, secured against their Ricoh Arena ground in Coventry which the club purchased in October.

"The salary cap is very important, both for us and for Premiership Rugby," Armstrong told Press Association Sport.

"It's been a critical factor in creating such a competitive Premiership, and it's very important for bringing through the strong crop of young English players.

"We believe it's very important long-term for the stability of rugby.

"So we don't believe there's the opportunity or even a need to go out and spend money on players.

"We are not the kind of club that will go out and spend huge money on a player or a marquee signing.

"We've got such a great young squad it's about bringing players through and developing the very exciting players we've got.

"The primary reason behind this bond has nothing to do with investing in players: it's about investing in the business as a whole."

Wasps' newfound wealth contrasts starkly with the club lurching to within minutes of administration in 2012, and rugby director Dai Young dipping into his own pockets for medical supplies little more than a year ago.

The club's move from renting Adams Park in Wycombe to the £40million Ricoh Arena purchase has proved the catalyst for this week's retail bond launch.

The Ricoh Arena's hotel, casino, conferencing suites and exhibition halls ensure daily business activity, rendering rugby the junior partner in the overall business model.

Wasps chief executive Armstrong will spearhead development off the field as much as on it, with a new training ground in the Coventry area expected to be ready inside 18 months.

Armstrong said the retail bond will hand Wasps "a long-term financial platform".

"It's been something we've been working on since the original purchase of the Arena back in October," said Armstrong.

"It was always our plan then that we would look at bringing the two balance sheets together, and refinance and restructure, and we've been doing that since we first made the acquisition, as well as settling in and bringing the two businesses together under one hat.

"I think the stability of all this is something that's very important.

"The acquisition in the first instance puts us on that very strong level playing field.

"We've got multiple income streams financial stability going into the future, and the diversification of income where we're only 65 per cent non-rugby and 35 per cent rugby means we've got a long-term sustainable model.

"Now with this refinancing it further strengthens the balance sheet and that sense of stability."

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