By Steffan Thomas
The Welsh regions believe they require a £40m injection of cash to keep them from collapsing during the current pandemic.
That figure is double the amount the four have so far been promised in the form of a loan, secured by the Welsh Rugby Union but for which the regions themselves are liable.
Last week, the chief executive of Cardiff Blues, Richard Holland, led the call for Welsh Government support and now one of the most respected figures in the game, Ospreys chairman and current Professional Rugby Board (PRB) member Rob Davies, has demanded a “fair and proportionate share of state funding” to help keep the professional game afloat.
“We’re all in the cart together and we’ve got to fight together to find a way out of a financial crisis that is not unique to us here in Wales,” said Davies.
“We’ve seen the other nations in the UK and in Ireland receive their fair share of government funding. My view is that while they’ve already been given financial certainty in Ireland, Scotland and England, it should be our turn next.
“To ensure we receive the state aid that should be due to us, we have to be aligned. Funding of around £35m-£40m in grant and loan is needed to help to move the professional game forward in Wales.
A statement from Cardiff Blues CEO, Richard Holland. pic.twitter.com/Gg6Mog5bTn
— Cardiff Blues (@cardiff_blues) December 10, 2020
“We opted to take out a £20m loan as an urgent interim solution to give us space to examine our options for the future. Now we need to the right level of funding to be able to play on a level playing field with our Pro14 rivals.”
WRU interim chief executive Steve Phillips sought to keep Cardiff Blues, Dragons, Ospreys and Scarlets afloat by negotiating a £20m loan with NatWest.
That loan must be paid back by the regions over the next five years, while WRU funding to the regions has dropped to just £3m for this year due to the pandemic.
The WRU’s annual report for the last financial year published on October 11 revealed a turnover of £79.9m, but the impact of COVID-19 had caused a loss of £5.3m.
That turnover is set to decrease dramatically over the next 12 months with no crowds at either international or regional matches.
Welsh rugby’s current funding model was agreed by the regions, who each have a representative on the PRB.
But now the private equity firm, CVC, has taken a 28 per cent share in the PRO14 – the competition in which the regions play – and is set the change the face of the professional club game.
The WRU annual report detailed the governing body had received £4.9m from CVC’s PRO14 investment.
Already there are plans to expand the PRO14 by introducing the top four South African Super Rugby teams and Phillips this week took time to explain the complex issues of the new investment to regional boards and progress with Welsh Government on funding.
“Of course we need more money, but at the same time we have to try to maximise our income by improving our product and our marketing,” added Davies.
“Yes, we do need £35-£40m to give us a fighting chance and if Steve Phillips or the WRU board needs any regional assistance from high calibre, experienced directors to help the game through this period then I’m sure between the four of us we could find some for him.
“We have to plan a course out of this pandemic. Provided the Welsh Government treats Welsh rugby in the same way as their English, Scottish and Irish counterparts have done then I’m sure we will be able to move on.”
While Holland and Davies are singing from the same hymn sheet, there are others who aren’t as happy with the fact there is a loan facility hanging around the necks of the regions at a time when their income has fallen through the floor.
“The four Irish provinces are more successful than the Welsh regions because Ireland are spending £40m on their provinces. They have been for years and that figure excludes the money they spend on their academies,” claimed a top ranking Welsh rugby official.
“The WRU have got to help us to find ways to push the funding up to £30m as a minimum and they’ve got to get rid of the loan. If this doesn’t happen, Welsh rugby could be set back 20 years.
“When the British & Irish League happens, we won’t be ready for it. What is more dangerous is our best players won’t be playing in the best tournaments because we won’t be qualifying for the Champions Cup as we’ve set the teams up for failure.
The chase continues 🔥
Round four of the Heineken Champions Cup kicks off tonight!
🍒 Gloucester vs Exeter Chiefs ⚫️
⚪️ Ulster vs Scarlets 🔴Watch EVERY match this weekend live on BT Sport 📺 pic.twitter.com/zt1GJlYMOv
— Rugby on BT Sport (@btsportrugby) December 14, 2018
“If you look at the other governing bodies, they aren’t doing that. Scotland are getting their act together, Ireland are already miles ahead, Italy are close to overtaking us while South Africa are joining the PRO14 which will mean four other teams ahead of us for Champions Cup qualification.
“Wales have got to wake up because the world is moving around us. Don’t forget CVC at the top are pragmatic investors who just want the best teams.
“They aren’t going to care if there are no teams from Wales who aren’t good enough. CVC’s mentality is they just want the best teams in this tournament.”