Former London Broncos player Martin Offiah fears for the future of the club unless they receive a cash injection.
The Super League side announced their intention to appoint administrators on Wednesday evening.
"David Hughes [Broncos owner] has been bailing that club out for quite a long time. A lot of it is dependent on money," Offiah told BBC London 94.9.
"I'm not sure if going into administration is tactical, or whether it is just the club spiralling down."
The Broncos have not secured a venue for their home games next season, although Barnet FC chairman Tony Kleanthous confirmed last week that the two parties had held talks over a groundshare at The Hive.
Offiah, who played for the Broncos for three years in the 1990s, added: "There are lots of negative stories coming out surrounding the Broncos and no-one knows what's happening.
"Will they be in Super League? It's not looking positive at the moment.
"We've seen what Marwan Koukash is doing at Salford Red Devils. It needs an injection of cash."
Departed youth coach Jones developed a number of Londoners such as Kieran Dixon, Wigan's Tony Clubb and St Helens' Louie McCarthy-Scarsbrook into Super League regulars during his 15-year association with the club.
Hackney-born Offiah believes there is potential for the capital to produce many more top players, but has warned that youngsters playing the game need an elite club which they can aspire to play for.
"London is seen as a hot-bed of rugby league talent," the 46-year-old said.
"When I left London to join Widnes in the 1980s, there weren't too many Cockneys going to play rugby league.
"There are a lot of youngsters who started out playing in London that are now in Super League.
"That is a positive and that has to keep going forward.
"It would benefit not only the game, but London as a whole if they could have a Super League franchise here."