The coronavirus outbreak has forced the majority of sports leagues to postpone their seasons for the foreseeable future. Now USA Rugby is being affected and has decided to file for Chapter 11 bankruptcy.
The organization was forced to make the difficult decision due to financial issues that were exacerbated by the coronavirus shutdown.
USA Rugby has had financial issues since 2018 and was affected even further after the organization was forced to suspend all activities indefinitely earlier this month. The organization wasn't able to collect spring and summer membership dues, which "resulted in significant loss of revenue."
"The current suspension of sanctioned rugby activities caused by the ongoing COVID-19 pandemic has accelerated the existing financial challenges facing the union, and a reorganization process will now be progressed with input from World Rugby," USA Rugby said in a statement on Monday.
The sport's national board and congress agreed to file for bankruptcy on Sunday after receiving approved loans from World Rugby. It was determined that this was "the best platform to swiftly and efficiently address challenges and deliver a foundation for future stability."
USA Rugby lost more than $4 million during the 2018 calendar year after poor attendance occurred at a Wales-South Africa contest in Washington and the Rugby World Cup Sevens in San Francisco. Following the disappointments, USA Rugby was forced to reduce costs and have a smaller office.