USA Rugby have filed for bankruptcy ©Getty Images

USA Rugby have filed for bankruptcy and Australia Rugby have reported a significant financial deficit for 2019 as both organisations struggle to deal with the impact of the coronavirus pandemic. 

Following detailed consultation with legal advisors, the USA Rugby Board of Directors and Congress decided to file for bankruptcy as a result of financial constraints. 

The governing body was already facing financial challenges, but the suspension of sport caused by the ongoing pandemic accelerated these issues.

It resulted in significant loss of revenue from spring and summer membership dues and sponsorship drawbacks. 

A reorganisation plan will now be implemented with help from World Rugby, who have provided a financial support package to ensure the American men's and women's sevens and fifteens teams are able to keep competing.

"This is the most challenging period this organisation has faced and all resolves were never taken lightly in coming to this determination," said USA Rugby chair Barbara O’Brien.

"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."

Rugby Australia are another organisation in financial trouble, announcing a preliminary AUD$9.4 million (£4.6 million/$5.7 million/€5.2 million) loss for 2019.

Rugby Australia claimed their significant financial deficit in 2019 is partly down to the legal settlement with player Israel Folau ©Getty Images
Rugby Australia claimed their significant financial deficit in 2019 is partly down to the legal settlement with player Israel Folau ©Getty Images

It is claimed this is mainly down to the legal settlement with player Israel Folau, who launched proceedings against Rugby Australia after they terminated his contract for posting homophobic language on social media. 

The financial results for 2019 are yet to be finalised, with the organisation still waiting on the completion of an independent financial audit of its books.

Rugby Australia's situation will be worsened by the coronavirus crisis, with Super Rugby suspended earlier this month.

Chief executive Raelene Castle is set to take a 50 per cent pay cut, as reported by NZ Herald, while the remainder of the executive team will also take 30 per cent pay cuts.

Emergency survival grants have been extended to all four Super Rugby franchises. 

Organisations all over the world are struggling with the impact of coronavirus, with the Rugby Football Union revealing last week that it is set to lose up to £50 million ($62 million/€56 milllion) owing to the disruption caused by the pandemic. 

There have been more than 800,000 cases of coronavirus worldwide, with just under 40,000 deaths.