As the regional tier of Welsh rugby has long been renowned for its opaqueness, Geraint Powell takes a look behind the sudden fascination with transparency in Gwent following the Welsh Rugby Union’s takeover and transformation of the troubled region.

It can be a tough life being a fictional detective.

Sherlock Holmes had to contend with an apparent giant demonic hound bounding across the mists of Dartmoor and also a diminutive poison dart thrower from the Andaman Islands.

Hercule Poirot could never seem to relax on holiday, whether on board a train through the Balkans or on a cruise along the Nile, before fellow travellers would start being murdered around him.

The mundanity of Miss Marple’s life, post-war austerity compared to the exotic interbellum travels of Monsieur Poirot, was never an impediment to bodies piling up in vicarages, hotels and libraries across southern England.

Endeavour Morse, Christopher Foyle and Jack Frost, despite their personal idiosyncrasies, should have been the most sought after police detectives in the UK such has been the complex murder rate on their patches and their clear-up rates.

But none of them ever had to contend with a mystery as baffling as what has recently been happening in Welsh rugby.

I refer, of course, to the curious case of the clamour for Dragons transparency.

Now transparency is a good thing, for a multitude of sins can be hidden behind a lack of transparency. Many of Welsh rugby’s structural problems would undoubtedly have been avoided with greater transparency.

But that’s the entire point. Welsh rugby’s producer-driven regional rugby tier since 2003 has long been renowned for its opaqueness, for there has been an almost complete lack of transparency on all issues and multiple sins hidden.

All compounded by a disinterested Welsh rugby media, with little or no interest or expertise in business let alone the post-1995 professional era business of rugby.

And hardly surprising given how the model came into existence through raw power politics meetings. Horse trading in smoke-filled rooms between 1990s era club benefactors and a stadium redeveloped impecunious WRU led by a lender driven change manager in David Moffett, culminating in a legal writ being issued against the background of a looming competition platform deadline.

Cue a unique Welsh compromise, an unsatisfactory and unsustainable hybrid fudge of a “model”.

Is there anywhere you can download a copy of any participation agreement between the WRU and the externalised regions, even a redacted one deleting any numbers considered commercially sensitive? No.

Does any region routinely declare in their accounts the amount of money they received from the WRU during that year? No, although in fairness the Newport RFC group used to declare the group figure inclusive of the Dragons.

Any breakdown between what WRU funding a region and – a particular Welsh absurdity – its partisan “in house” semi-professional club has received? No chance.

Any breakdown of what funding any region has received between the Pro 14 and the Champions Cup / Challenge Cup? Forget it.

Any breakdown at any region between the sums received from central broadcasters and central sponsors, generally or specific to any competition platform? You must be joking!

Even on the rare occasions where there is transparency, sometimes you wish there wasn’t because you just lose even more confidence in the regional tier.

Astonishingly those now clamouring for Dragons full transparency were, for the most part, those that have consistently remained silent over opaquely unusual corporate structures, controversial state aid arrangements and damaging domestic player wage price competition.

And, of course, there was silence over the volte face from the absolutely fiercely argued by some clubs requirement of a minimum of five regions in 2003 to hardly a murmur when one was culled just 12 months later.

Why have people that have had a complete disinterest in the internal affairs of four regions over thirteen years now suddenly become obsessed with the non-voting cumulative preference share/s of new Dragons Chairman David Buttress?

In terms of transparency, what do we already know?

We know that the WRU leadership spent time in New Zealand, during the Welsh national team’s June 2016 tour, studying the more mature and more successful New Zealand mixed ownership regional rugby model. And particularly with the Chiefs franchise on the North Island.

We know that the WRU want a sustainable investor model in Gwent, not a boom and bust benefactor model.
Cwmbran-raised Buttress has joined as Chairman, and it is likely he will personally drive the quest for substantial additional decentralised/devolved revenue streams.

Both he and new coach, Bernard Jackman, are aware of the regional alienation problems to be addressed and the ongoing negative financial consequences until overcome.

We know that the WRU have maintained a three company structure at the Gwent region, a regional holding company with two subsidiaries to respectively operate the stadium facility and the region’s professional rugby team.

We operationally start from the point that we know that the Newport RFC group lost £754,840 in 2015-16, but we do not have a breakdown from them of the allocation of those losses between the club and the region.

We know there was severe cost cutting in 2016-17, as there was an attempt to slash costs at least equivalent to that 2015-16 group loss, but we do not know whether this was achieved on an underlying basis. Given the transaction costs associated with the WRU takeover of the region subsidiary, it is now unlikely we will ever know.

We do know that the Dragons have traditionally suffered in relation to two revenue streams. In terms of centralised income, and whilst they share broadcaster income, they have struggled in terms of competing in Roger Lewis’s “internal market” between the regions in securing dual central contracts. The Blues have also struggled, but to a lesser extent.

Where the Dragons have really fallen far behind the other regions is in terms of decentralised/devolved income, both retail and corporate. There is enormous scope for growth from a very low base.

We know that rugby squad environment costs, including the gentleman from Tullow and a new defence coach from Pretoria, have increased but that squad player wage costs have remained at £3.5 million in 2017-18.

The timing of the WRU takeover left no opportunity for squad strengthening, Jackman working with and evaluating his inherited squad and astutely buying time for his Chairman to prepare revenues for higher wage bills from 2018-19 to fund a long overdue and carefully planned through 2017-18 player recruitment drive focussed on Welsh exiles.

We know that the Dragons squad wage bill will increase in 2018-19 to £4 million, a rise inevitable as quality players such as Ross Moriarty and Richard Hibbard – and other exiles – join the squad. Revenue equally needs to increase, to keep the region in the black.

We know that a number of out of contract players will be leaving the region next summer, probably the equivalent of around £1 million of wage costs give or take. So we know that Jackman has about £1.5 million at his disposal for new players next season.

We know that the planned wage bill could change between now and next season. The Dragons may be sooner able to bring their income closer to the level of the other regions. They will undoubtedly attempt to sell the naming rights to Rodney Parade, and not just for financial reasons.

In the longer term, the surplus to requirements – for the Ystrad Mynach based region – northern part of the stadium facility is likely to be commercially developed to provide additional revenue streams.

And we know that the Dragons will report their annual financial results, in exactly the same format as the other regions, 9-12 months after a season’s end.

So, if there is already plenty of transparency, and we are not witnessing conversions greater than St Paul on the Road to Damascus for those with previously no interest in weak governance at the regional tier (www.dai-sport.com/gareth-daviess-wru-reforms-must-mean-one-thing-leads-another/), what is driving this sudden fascination by those uncomfortable with true representative regional rugby for a minute by minute commentary?

Fear.

Fear that a stronger business and rugby model is being built at the Dragons, that they will no longer just be making-up the numbers whilst the other three regions do better.

Fear of contagion; that alienated and disaffected rugby stakeholders in other regions will themselves demand a more inclusive representative regionalism.

Fear that the WRU will refuse to keep propping-up other unsustainable and divisive “super” clubs.

And the biggest fear of all; that the WRU will do what it should have done in 1995 and run the entire regional tier and bring in private equity of its own choosing.

The clamour for transparency is in reality a quest for ammunition to use against the Dragons at this initial evolution stage, before it is all too late and the new model sweeps away the troubled 2003 hybrid fudge at the national level.