As the Newport Gwent Dragons and WRU remain in talks over a takeover of the region, Dai Sport asks Geraint Powell to peer into his crystal ball and imagine where and how the game could change for all four regions over the next 12 months.
A fictional month by month account of how the Welsh Rugby Union ends up taking over regional rugby in the next year.
I must confess, when Dai Sport gave me this provocative title for an article, my natural gut instinct, if not to decline, was to at least don a steel combat helmet, whilst sitting in a Challenger main battle tank, itself parked well within the sealed up armoured citadel of a battleship. Prepare for incoming heavy ordnance…
The conventional wisdom, at the time of the Rugby Services Agreement armistice/ceasefire between the WRU and the regions in the summer of 2014, was that this always flawed 2003 business model of nominally independent South Walian regions would start to go into terminal decline from around late-2017, as a result of revised external broadcasting and participation agreement pressures and the internal need to start repaying WRU loans, and then through evolutionary agreements and incremental steps we would see an essentially WRU controlled system in place for the start of the 2020-21 season. Things are already starting to unravel ahead of schedule.
But could it all unravel quickly, or do we all have to wait until the summer of 2020? What’s the current worst case scenario? Let’s have some fictional fun, shall we…?
In April 2017, the Dragons/Newport RFC board and the WRU board agree that the WRU will buy the group’s businesses lock, stock and barrel. This will give Gwent another decade to get its’ act together as a united club neutral representative professional rugby region. The decision is ratified by the vast majority of shareholders, to preserve the Dragons as a region and to preserve Newport RFC in the WRU Premiership, for the shareholders know that otherwise all the secured creditors will call in their loans and the WRU will buy Rodney Parade from the liquidators and set-up their own new region there without any Newport RFC existing.
The South Wales Argus publishes a leaked internal memo that the WRU are intending that Pontypool RFC will replace Newport RFC in the WRU Premiership (which will then be permanently ring fenced) if a straightforward WRU takeover is blocked and Newport RFC inevitably cease to exist. This ends the remaining opposition to the takeover, and provisional attempts by diehard volunteers to set-up through donations a new successor Newport RFC in WRU Division 3 East are abandoned.
In June 2017, the Scarlets file their 2015-16 accounts and which show a marked deterioration from their near £1 million loss in 2014-15. Rumours circulate, true or not, that player wages are in arrears. The historic funding directors privately confide to the WRU that they can no longer continue to cover future losses or find new funders to take over the burden. Their resources are finally exhausted.
The WRU Chairman is approached by the Welsh Government First Minister and the leader of Carmarthenshire Council, both increasingly concerned about the political fallout of the Scarlets going under with nearly £40 million of taxpayer money having been committed to the Pemberton Stadium development. In June 2017, the WRU CEO announces that agreement has been reached and that the WRU will take over the region to preserve professional rugby in Llanelli in return for the funding directors writing off their historic debts. The WRU move quickly to appoint Rupert Moon as the new CEO of the Scarlets.
In the fall out from the takeover of the Dragons and the Scarlets, the WRU member clubs make a strategic policy decision and pass a resolution at the October 2017 WRU AGM that, from 2020, all regions will have no partisan club or geographical names in their branding and must seek to be representative of all the clubs and communities within their regions. The boil is to be lanced, once and for all.
The WRU clubs further mandate the WRU board to obtain private investors for 7 year regional franchises licenses of the Dragons and the Scarlets, as per the New Zealand model. Each franchise license will be owned 50/50 between the region’s rugby clubs (joint and severally) and interested private investors. The WRU will retain ultimate region ownership. The AGM also confirms that, from the next participation agreement beginning in 2020, there must be a system of universal central contracts for all Welsh-qualified players in regional rugby.
The Cardiff Athletic Club have by November 2017 finally refused to grant a new lease of the Arms Park with redevelopment rights to the Blues from 2022, having been approached directly by another consortium of property developers who wish to take advantage of the Principality Stadium recreational use by building a convention centre on the Arms Park without any rugby pitch limitations within the design plans.
The Athletic Club, with some diehard members already unhappy at the prospect of having to ditch “Cardiff” from 2020 or the Blues will be excluded from being a region in the next participation agreement, vote to accept this offer and to cut out the Blues as middlemen. Agreement is reached with the Blues that they will take back the Cardiff RFC club in the WRU Premiership upon a mutually convenient date. A new ground will be built in Lisvane for the semi-pro Cardiff RFC, and the rest of the substantial Arms Park sale proceeds will be invested to secure the financial future of all sections of the Athletic Club for generations.
By December 2017, the Blues Chairman (now faced with having to find a new stadium home in 2022) has finally had enough. As part of the relinquishing of the Athletic Club shares in the severance with the Blues, his £8 million of debt will be converted into shares. The WRU make an offer to buy the Blues, having reached agreement with Barclays, so that they can redevelop “Glanmor’s Gap” and remove the last impediment to the redevelopment of the Arms Park starting before the current lease expires in 2022.
The Blues will be re-branded completely and will share home matches in future between the Principality Stadium, Sardis Road and The Wern. In return for avoiding political fallout through the Scarlets collapsing, the WRU secure Welsh Government funding to help develop a corporate stand at the Rhondda end of Sardis Road.
This now leaves the Ospreys as the last of the nominally independent regions, but 2017-18 has been a nightmare season for them. A late season slump in form in 2016-17 saw Swansea City FC dragged back into the relegation zone and finally relegated on the very last day of the season after a 0-1 defeat against West Brom.
This badly impacts the Ospreys shared corporate hospitality income streams at the Liberty Stadium in 2017-18. The Ospreys have also been unfortunate in the number of injuries sustained to their squad on the Lions tour and the Welsh tour of the Pacific Islands. Those Lions that are not injured are suffering a hangover in terms of their playing form and are unable to offset an injury decimated squad. Results, crowds and income are plummeting.
There is fan unrest following back to back home defeats to Treviso and the Dragons in the Six Nations window. The Scarlets being top of the Pro12 is not helping, as the local rugby eventers head there. With the other three regions now in WRU ownership, and with mounting concerns that those regions might receive preferential treatment, and with the prospect of additional income at the Liberty Stadium through the reconstituted Wales “A” team being based there following any WRU takeover of the Ospreys, the decision is reluctantly made to hand over the keys of the Ospreys to the WRU.
All four regions are in WRU ownership by the end of the 2017-18 season. The first mixed club/private investor ownership 7 year licenses are ready to be announced by the WRU ahead of the 2018-19 season.
How likely is this? I would say “very unlikely”, at least within such a short timescale. But all are individually possible, and may well happen (or varieties thereupon) before 2020, and this highlights the inherent instability and weakness of it all.
The lack of resilience to market forces, to which Welsh rugby is wide open under the flawed current model, can only end in one way.