It’s Year Zero  . . . again. Regional rugby is being tried for the second time, but in a very different version, following the Welsh Rugby Union takeover of the Newport Gwent Dragons. Geraint Powell considers what the brave new world may look like.

 

The shareholders of Newport RFC last night voted to ratify the conditional Welsh Rugby Union offer to takeover the Newport Gwent Dragons and of Rodney Parade.

If truth be told, the overwhelming majority realised they had little choice in the matter.  The alternative was far worse for Newport RFC, even on a best case scenario of how things might then unfold.

But it has still been a tricky road for WRU Chief Executive Martyn Phillips and Dragons/Newport RFC Chief Executive Stuart Davies to successfully navigate.  Addressing some issues in Gwent over the last 2 years that should have been confronted a decade or more ago, and with much more remedial work to come over the next 3 hard years.

There have been no winners in Gwent rugby over the last 14 years.  Many rugby fans have felt alienated from the non-Test tier of professional rugby, a complete void between their club and/or community and the Welsh national team.  Other fans at Newport RFC have been frustrated by the downplaying of their club heritage from the professional regional team, in the confusion between regional rugby and “super” club rugby caused by others in 2003, and culminating in the Rodney Parade asset being used as collateral for professional game risks and ultimately acquired by the WRU.

There is no time for recriminations, to keep fighting over the past and picking at the scabs of old wounds.  Everybody has been a loser and now the focus must be exclusively on the salvage job beginning.  The 2003-17 era is gone.  I have looked at the issues and opportunities for the semi-pro Newport RFC (link), and they equally must seize this opportunity to regroup and rebuild, and in this piece I turn my attention to the wider professional region of District A and the Rhymney Valley District C clubs.

Regionalism in 2003 ended-up being a rather pointless exercise in stamping “regions” on the last surviving alone or amalgamated professional clubs.  If I stamp “cow” on a horse, will that make it a ruminant?  Of course not.  This will be real regionalism, and for those who have grown-up only thinking in terms of clubs and have never seen South African/New Zealand provincial and regional rugby close up, the change that is coming will eventually prove to be seismic and will be a steep learning curve.  Everything gradually changes, from the commercials to the nature of the union politics.

As I knew nothing about the UK DIY and home improvement retail industry, including Kingfisher’s B&Q business, I equally knew nothing about Martyn Phillips before his appointment as the WRU CEO in July 2015 (link).  But when I saw his background and CV, in the context of a Rugby Services Agreement which was self-evidently likely upon signing in 2014 to be in trouble by 2017-18 (the meltdown has just begun a season early), I instantly knew that transformational change would be on the way to Welsh regional rugby at the end of his likely extended consultation process with various stakeholders and subsequent period of reflection.

As sure as night follows day, change would be coming and without the distraction of the personification of his predecessor.

This is not an overt criticism of his predecessors, some of whom were operating under very testing conditions.  By the advent of professionalism, the focus of Vernon Pugh was already on the higher echelons of rugby union and the wider global picture.  His successor, Glanmor Griffiths, was focussed on hosting the 1999 Rugby World Cup and building the latest WRU Stadium at the Arms Park site.  David Moffett was brought in to address a critical WRU financial crisis, in no financial or legal position to impose badly needed structural reform upon some unwilling clubs.  Roger Lewis was focussed on the financial engine of “Team Wales” and debt reduction, without WRU active equity in the non-Test professional game.  And became waylaid in looking towards the Irish model, when he should have been looking at the tri-partite New Zealand model.

Nevertheless, and when all is said and done, Welsh rugby has wasted the first 22 years of the professional era and has been left behind by others at this level.  Even when positives occurred, such as the overdue 2003-04 resource concentration into four teams, the producer driven implementation was badly botched and driven by politics and legal threats without thought to any future viable and sustainable business model.

For a union chief executive operating in this era, I believe the core attributes needed are empathy for the game and the culture throughout the national pyramid, recognition that rugby is a business as much as a sport and the need to build consumer friendly offerings in diverse and ever changing societies, and prudent risk management.  If he (or she) has these qualities, then the managing of the business/financial models and rugby development will naturally follow.

Martyn Phillips, even at a cursory first glance at his CV, passed this “ECR Test”:

(A) Empathy

He is a product of Welsh rugby, having played representative rugby as a schoolboy international at the top end of his peer group.  Not some outsider or incomer businessman or administrator with no feel for the sport and/or culture.  From Pembrokeshire, he recalls plenty of hard matches in the South Wales valleys.  The disenfranchisement of the North, and especially the alienation of the South Wales Valleys, would not be concepts beyond his immediate grasp.

(B) Consumerism

His career has been in a retail environment, an industry predicated on satisfying consumer demand.  There is no point in standing round complaining that the consumer is not buying your chosen products for them and carrying on with the same products.  And an industry based upon decentralisation, for a Chief Executive cannot micro-manage hundreds of stores across any country.  It is a culture of empowering, but balanced by holding people to account.  Alignment, with checks and balances.

The story of the professional era in Welsh rugby has been about imposing divisive producer driven structures on unwilling consumers, with inevitably little success.  You can’t buck the market, and Welsh rugby has made little effort to mould the market in its favour in the way countries such as New Zealand and Ireland have done.

(C) Risk

He spent many years within a specialised retail background in terms of managing risk. Not just the usual global supply chain, stock and currency risks, but at a retailer carrying additional risks where a decision has to be made over positioning against e.g. unusual weather conditions that can alter consumer demand and spending.  Will B&Q sell many stocked barbecues if it keeps raining from May until September that year?

The current Welsh rugby “model” is beyond high risk for the member clubs, where the emphasis has been almost exclusively on the summit of the pyramid and usually in protecting sectional pasts rather than embracing shared futures, before we even get to the significant external risks such as Anglo-French player inflation currently being driven in each country by duopoly conflict between non-terrestrial broadcasters.

 

His background made him ideally suited to assume operational control of the Welsh Rugby Union, and the timing was important as a new (many would argue a first) business model will need to be built for the non-Test professional game from 2020.  Sooner, if the rest of the status quo completely implodes beforehand.

The status quo has already imploded in Gwent, and it is looking increasingly financially troubled elsewhere as the sun is setting on the disjointed and completely wasted post-1995 club benefactor era. If the Blues funding directors are not focussed upon plugging into a property redevelopment and offloading a rugby region, they should be.

Modernisation now begins with the Dragons, and there is considerable benefit for them in being the first region to enter WRU ownership.  “WRU 1”, although that title rightly belongs to North Wales as the completely geographically separated region in a logical 4 region North/South/East/West professional rugby model.  And, of course, there will be the usual howling from the capital if the (South) region they fall within is not considered “WRU 1”!

We shall call the Dragons “WRU East”, a region for all 73 clubs and (unless they opt out) all rugby fans there.

In structural terms, season 2017-18 might feel a bit like the 1939-40 “Phoney War” between the Fall of Poland and the German Blitzkrieg against France/the Low Countries in May 1940.  Some pointers as to the future direction of travel can already be gathered from the fifth region of the north – RGC (link).  Much of the considerable initial rectification work at the Dragons will undoubtedly be internal, away from the public eye as the business is structurally integrated into and aligned with the WRU and a higher performance playing environment is slowly created.

But there are a number of issues that will gradually need to be confronted and in doing so provide clues about the future direction of travel.  These are 12 things to specifically look out for, as we begin the transition from failed “super” club rugby for a few to representative regionalism for all.

(1) Name

There was no way that the name of the region could not be immediately confronted, as much as the WRU would no doubt prefer to get started on immediate issues to improve team and business performance.  It has divided the region throughout the existence of this franchise.

It will be from 1 July the Dragons, the superfluous and divisive “Newport Gwent” to be ditched.  The relatively successful Ospreys/Ospreylia branding model will logically be followed, to the surprise of very few (link).

The regionally toxic “N” word had to go, for nearly everybody recognised that.  To their credit, including many from Newport.  As a provincial or regional brand, even before you get to wider alienation and a low lying affinity “cap”, it has always been plain and obviously incorrect as a matter of geography.  Newport Council is not responsible for Monmouth, Blaenau Gwent, Torfaen, Caerphilly and Islwyn.

Which of you has ever watched a New Zealand provincial rugby match between Christchurch Canterbury and Dunedin Otago, or a South African provincial match between Cape Town Western Province and Durban KwaZulu Natal, or an Irish provincial match between Dublin Leinster and Belfast Ulster?

If we have regional rugby, we require regional identities and brands.  Not the name of one locality, let alone the name of one club within that locality, within a wider region.

“Gwent” will also be ditched.  As it had come to mean “the rest of Gwent apart from the Newport bit” to some, its added value usefulness has become dubious.

The real question is whether the WRU will go for a complete re-launch in 2018-19, or persevere with the Dragons as a regional brand?

In terms of brand monetarisation, one can’t help but feel that the WRU Sales/Marketing machine might be literally salivating at the mouth at the prospect of re-deploying the Dragons brand to the re-constituted Wales “A” team and then re-launching with a new brand in Gwent.  The English Saxons, the Irish Wolfhounds and the Welsh Dragons, with Under Armour requested to design a Welsh “A” team jersey with a slightly darker colour red dragon across it.  Kerrching, especially with children’s replica jerseys.

The only real impediment, for there is nothing uniquely Gwent about the Dragons brand, a back of a fag packet afterthought in 2003 (only after the Wales “A” team had been culled) is obvious and singular – the process of agreeing a new identity/brand and the distraction from the immediate business fundamentals.  There are at least a dozen credible alternatives in circulation, and even “East Wales” (leaving the growing fan base to collectively at the devolved level to choose something over time, if so desired).

We should have a general idea of the thinking by Christmas 2017, given the lead-in period into the 2018-19 season for this sort of branding re-launch.

(2) Colours

The issue of colours will very much be tied to name.

We know the historic colours of Monmouthshire/Gwent, the flag and the coat of arms.

In fairness to the previous Dragons board of directors, they had already started the move towards the regional colours with successive alternate.

We can probably expect a gradual move towards using the regional kit for all of Gwent, inclusive of the city of Newport, over 2017-18.  And then, if the Dragons brand is retained, a primary designation for it ahead of the 2018-19 season.

One of the topics frequently raised on forums, subject to the stance of supranational competition organisers, is home developed players wearing club socks.  The Barbarians have a lot to answer for!  Perhaps once dangerous, less so in the era of television match officials.  If a player spends many childhood seasons developing at, for example, Penallta RFC, why should he not wear his club socks when he represents his region?  Or on another day those of a later embedded feeder club?  Regional rugby should be the final extension for every club, before support for Wales “A” and Wales.

If the Dragons brand is re-deployed to the Wales “A” team, colours will pretty much be tied to the successor brand.  For example, if you were to go with a brand aligned to the region’s industrial past of steel and coal, you might expect a black and grey primary kit.

If the WRU are looking at a complete re-launch, it becomes what acceptable (for replica jerseys have to be sold) and non-major feeder club associated colours remain?  The one desirable fashion conscious major colour missing from UK rugby union would be from within that burgundy, maroon and crimson range.  Associated with sporting success from Stellenbosch to Alabama, formerly for Queensland rugby (have they won much since they ditched it for red, to differentiate themselves from the rugby league team?).

(3) Continuity

After a 15 month period of uncertainty, the WRU will probably be looking at a period of continuity and stability.

If the Dragons have failed, it has been a collective failure and not the doing of the foot soldiers.  People should be given the opportunity to demonstrate their individual potential under a different model with WRU expertise fully behind them.  If 1 July becomes day zero, nobody should be punished for what has happened before.

If any dead weight is identified down the line, I am sure that it will be removed.

Clearly, having navigated a way through the “super” club impasse towards a regional future, Stuart Davies should be given an extended opportunity to demonstrate to the WRU (and to future private investors) his vision of regional rugby and the commercial potential.  That goes without saying, plus his knowledge of Newport RFC and what logistical support they may require from him as they re-position themselves towards an essentially volunteer semi-pro club organisation.

It sometimes gets overlooked in the wider debate, but the Dragons have actually done well with one fan constituency, families with young children to the south of the region.

(4) Board of Directors

A new board of directors will need to be appointed on 1 July, although it will probably be streamlined as the Dragons essentially temporarily move towards being a branch office and away from being a nominally independent business.

The key will be the WRU executives and the regional executives, both overseen by the main WRU board.

Regionalism may be anti-dogma in essence, pure pragmatism in drawing opt-out boundaries balancing the number of affordable teams against historic club diversity, but it will need some directors committed to the concept.  Others should be there on ability, providing they are not dogmatically and ideologically opposed to the very concept.

As three WRU directors hail from Dragons region clubs, it is fair to say that some are looking to see if at least two of those will be appointed to the Dragons board.  There has to be full engagement with the pyramid below, to salvage the Dragons.

(5) Friday evening preference

It will be interesting to see if the Dragons look towards the successful Ulster fixture model, to play home matches and (non-Judgement Day) away Welsh derby matches as much as possible on a Friday evening.

An unambiguous statement of intent that the region wishes to avoid non-alignment and commercial competition with its feeder clubs.

A stated preference to the terrestrial broadcasters to play home matches on a Friday evening, but especially avoiding commercial competition with feeder clubs during the afternoon if a Saturday match is required.  Under the current broadcasting arrangements for the Pro12, which end in 2018, Sky are the only issue and (for obvious performance issues) they have seldom selected Dragons matches.

Obviously, transport links in Gwent are far from ideal and developing the provision of self-funding coach transport from designated locations will be something that the regional management and the supporters group will need to gradually co-ordinate over.

(6) Fixture list co-ordination

People from social media who actually meet me for the first time are usually quite shocked to discover that “super” clubs, despite narrow historic clubs being the wrong vehicle for commercialised professional rugby in Wales, are not my biggest bugbear when it comes to Welsh rugby structures.

By a country mile, it is the inability of Welsh rugby to compile commercially sensible integrated fixture lists whilst preserving rugby integrity.  It has been the story of the post-1990 era, and shocking compared to the proficiency of some of the SANZAAR nations in doing this.

Co-ordinating and integrating fixture lists opens up so many commercial opportunities.  Premiership and Championship clubs away on weekends when the region is home and vice versa.  A double header between club and region at Rodney Parade.  A “Bisley Plus” double header between club at Rodney Parade and region at another regional venue (link).  The failure to integrate pyramidal fixture lists is literally watching money burn.

All pyramidal fixture lists should be integrated, a team locked away in a room at the WRU offices for a week after the draft Pro12 and EPCR fixtures are released and not unlocked until they have worked down the pyramid division by division.

Will we see signs of this happening, with a WRU takeover in Gwent?

(7) Joint ticketing

If you integrate fixtures, the next step is integrating regional ticketing.

If you alternate region and leading feeder club matches, you are constructing a potential weekly local rugby offering rather than a fortnightly rugby offering.  And then you can schedule Premiership Select matches to avoid a 2.30pm clash with the club game or a 7.30pm clash with the region.

When you contact the Dragons to purchase a season ticket from the Dragons, should you automatically be asked whether you wish to purchase a single regional ticket or a joint ticket with (as a bare minimum) a regional “A” licence club?

Minimise the £s that are inefficiently not brought into the pyramid, minimise what £s seep out of the pyramid through inefficiency.  Will we see signs of these synergies?

(8) Pricing structure

Given the retail background of the WRU Chief Executive, this is an obvious one to keep a close eye on.

We have already seen a radically different approach in relation to the Autumn Internationals this November, with a switch towards filling the stadium rather than only maximising revenue through high ticket prices sold (link).  Significant price reductions, to re-engage with club fans and families.

The big question to look at with the Dragons will be the price of individual tickets, for the first season or two, because of the affinity issues to be addressed.  There is always a balance to be drawn, between discounting to encourage the purchase of season tickets/full payment ahead of the season and encouraging further attendance during the course of the season.

The cash strapped “super” club model has undoubtedly struggled to get that balance right, with season tickets ridiculously discounted and then match tickets almost punitive in comparison.  It will be interesting to see how the WRU approach these issues, with their ability to smooth cash flows at a subsidiary to avoid penalising new consumers.

(9) Missionary matches

One of the great absurdities in Welsh rugby is the argument that regionalism is all about playing loss-making matches at secondary club venues.

The regional missionary work should have been done before stands such as the Bisley were ever completed, the buy-in achieved apart from the occasional novelty match at an outlying venue, so that the Bisley Stand could be financially sweated upon completion.  This basic commercial work was not done in Gwent, just as it was not done in eastern Glamorgan.  There is a short-term financial cost in doing it so late.

If the region, the football club and Newport RFC are sharing a pitch, of necessity some respite will need to be provided for that surface.  The Premiership Select and Anglo-Welsh Cup rugby teams are the obvious candidates for home touring.

I think it is almost universally recognised that a regular season Pro12 match will have to go to Eugene Cross Park next season, and once every season, and not for an Italian match (but equally not for a Welsh derby match), to lance the boil of 2003 once and for all.

The least financially damaging would be a “Bisley Plus” (link), but how long will it take Welsh rugby to join-up and organise a Newport v Ebbw Vale Saturday afternoon fixture whilst the football club is away before a regional Saturday evening match at Ebbw Vale’s Eugene Cross Park with the support of Blaenau Gwent council and business interests?

We will find out, and this is something to monitor.

(10) Feeder club hubs and spokes

Another major issue, as we attempt to create a more joined-up pyramid in Gwent and remove commercial non-alignment between region and clubs below to the extent possible, will be whether the Dragons pursue a major feeder club hub and spoke strategy?  If the Dragons are a regional hub, 73 direct spokes is an awful lot.

Whether the Dragons attempt to regularly engage, as opposed to always being a phone call away in the need of assistance (from urgently borrowing equipment to help finding a player in an injury crisis), with all 73 clubs or whether they try and build a structure of heavily engaging with “A” licence and other bigger clubs and expecting those “spokes” to the regional hub to act as their own hubs to the spokes of their own local clubs e.g. Ebbw Vale for Blaenau Gwent, Newport for the city, Bedwas for the lower Rhymney, Bargoed for the upper Rhymney, Cross Keys for the lower Western valley, Newbridge for the upper Western Valley, Pontypool for Torfaen/the Eastern Valley etc.

One suspects, from his retail background, that the WRU Chief Executive may lean by natural inclination towards some form of leading feeder clubs hub and spoke strategy, with mini-pyramids within the region rather than trying to micro-manage everything from the Dragons in Newport.  Especially with the level of internal remedial and future foundations work to be undertaken within the Dragons.

It must be likely that future “A” licence criteria, across the whole of Welsh rugby, will include a formal commitment to host both regional “A” team and age grade matches.

You might argue that the supporters club “Wall of Gwent” jerseys at every home Dragons match is itself an instinctive natural progression towards a mini hub and spoke strategy.

(11) Dragons Official Supporters Club

Talking about the supporters club, they should not so much as be encouraged to engage with as more like physically booted out into the community game.

And then, in time, start to integrate them into operations e.g. they will know where many fans will reside and what coach routes if organised by them on behalf of the region will cover their own costs and bring people into the stadium from outlying regional areas.  This will be important, given poor transport links in parts of Gwent.

Watch for any developments in this area.

(12) Future 2020 business model

And all this leads us to the final point, for clues as to the future business model for the Dragons from 2020.  And for other regions.

It is hardly the biggest secret in Welsh rugby that the WRU have been looking at the New Zealand model, and the smart money is on some sort of variety upon that.  Whatever happens at other regions, i.e. the WRU allocating 25% of central competition platform income and WRU funding of regions to the Dragons to contract all the players and head coach and then licensing out the franchise to any investors.

As hilarious as it is reading that the biggest impediment to implementing the New Zealand model in Welsh rugby is smaller geography, because those ideologically opposed to the full regional rugby package don’t even know their strongest argument, the real problem is that Welsh rugby cannot quickly implement a tri-partite structure.

The WRU in Cardiff may be the equivalent of the NZRU in Wellington, and private investors may be brought in, but we are missing the third pillar in that we don’t have the expertise of provincial unions to bring in individually or as consortia.  Neither the WRU districts nor the major semi-pro clubs, individually or acting together, are remotely the equivalent of the NZRU provincial unions.  So we don’t have an interface between the WRU centre, the WRU devolved (clubs and districts) and future private investors.

David Moffett, of all people, had clearly identified this problem when he returned to Wales in 2014.  He very much disguised their real significance, re-use in a union run tri-partite structure when the old model failed, for some of the constituencies he was courting to unseat David Pickering would very much not have approved of future WRU owned regions with part investment from private investors in conjunction with these devolved new WRU RRBs.  But the suggestion in his manifesto was to replace the WRU districts with proper WRU regional rugby boards or RRBs.

Not only could they later provide the third and missing pillar for a tri-partite structure, a devolved rugby expertise and regional licence investor itself, and also provide the interface for local clubs with both the WRU centre and with new devolved private investors, but it would resolve many of the long-term WRU governance shortcomings.

Elected club representatives could go to the RRBs, and possibly also to a WRU Council required to ratify major constitutional change, but with the RRBs each appointing a representative to the WRU main board and allowing that to become a streamlined strategic 8-10 member board.

And of course RRBs would help entrench regionalism, with all the commercial benefits.

 

So this is where we are, and these are the things to start monitoring, as we try and ascertain the nature of the representative regional evolution ahead.

 

This article appears courtesy of the The Viet Gwent – a rugby blog.