Exclusive: Leicester Tigers and DCMS face scrutiny over £6m Covid loan renegotiation
Leicester Tigers and DCMS are facing questions after they altered the repayment terms of the club’s £6m Covid-19 loan to interest-only until 2028.
The change, which only emerged in the Prem Rugby club’s most recent financial accounts, casts further doubt on DCMS’s chances of recouping its £474m lending to sporting and cultural bodies – raising the risk of losses for the taxpayer.
It also comes as Leicester – whose main shareholder is wealthy investor Tom Scott – spent more than £15m of their £21m turnover on wages, leading to a loss of £4.2m for 2024-25, when they finished runners-up to Bath in the English top flight.
“Our loan with DCMS (Department for Culture, Media and Sport) was switched to interest only during the year, meaning that our capital repayments were significantly reduced, and will now recommence in March 2028,” Leicester said in their financial report. “The Board would like to extend our thanks to DCMS for its continued support.”
DCMS and Sport England have already come under fire for the Covid loans, which they began issuing in October 2020 amid concerns that disruption to schedules and spectator numbers posed a critical threat to clubs and other organisations.
More than half of the sport loans – £124m – went to Prem Rugby teams, but the subsequent collapse of Wasps, Worcester Warriors and London Irish, who collectively borrowed around £30m, left a black hole in the loan book.
By October 2024, DCMS had spent £17m on managing its Covid loans, which carry interest of two per cent, and recouped just £41m, a report by the Committee for Public Accounts found.
At a hearing in March this year, DCMS permanent secretary Susannah Storey was unable to be questioned on the loans to rugby clubs having delegated those matters to avoid a conflict of interest. Storey is married to Pev Hooper, a director of Prem Rugby and a managing partner of its investor CVC Capital Partners.
DCMS criticised for loans to loss-making clubs
DCMS said it would not comment on the specifics of Leicester’s situation, citing commercial sensitivity, but that a small number of borrowers had been granted repayment schedule amendments on a case-by-case basis, with protecting taxpayer money in mind.
Morning Wire was told that Sport England, as DCMS’s agent for the sport loans, regularly engages with borrowers to monitor their financial position, and works with them to ensure that the loans are repaid and that borrowers comply with the loan terms.
Sport England did not offer comment but said any decisions on Covid loan repayment terms and technicalities were led by DCMS. Leicester Tigers declined to comment.
Alex Cadwallader of professional services firm Leonard Curtis, which produces an annual report on the state of English rugby’s finances, said: “Making recoveries from loans to loss-making and balance-sheet insolvent business is challenging.
“DCMS has been openly criticised for their initial assessment that ‘that these clubs were financially viable when it awarded the loans, despite public reports at the time to the contrary’ and despite filed accounts for the last 10 years showing the underlying businesses were always loss-making once exceptional property transactions were removed.
“They have also faced criticism for the way in which they have sought to collect their loans from entities owned by private equity and successful businesspeople.
“However, on the other side, I suspect they would be criticised for pushing any club into administration by enforcing their loans as well.”