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Everything you wanted to know about Welsh rugby, but were afraid to ask

As a response to the debacle surrounding regional rugby in Wales, and the letter sent by the WRU to its member clubs this week, I thought I would take this opportunity to express my concerns and thoughts as to the culpability of the WRU in this matter.

The context of the debate is that Wales operates a model of control and governance whereby the four regions (RRW) are privately owned and contract with the governing body (WRU) for participation in tournaments and compensation for international players produced.

The RRW and WRU had an agreement for participation called the PA which ran between 2009 and 2014. Recently, after much media bullying and threats from the WRU to set up new regions owned centrally at the cost of a thousand Welsh jobs, the regions declined to roll over this agreement.

Before I discuss why I think they declined this option to replicate the PA for another five years, let me break down the PA.

It is worth:
- Circa £10m split four ways p/a for TV rights and competition monies. This is money dependent on the regions playing, however the money is paid into the WRU accounts and then distributed by the WRU under the union run competition rules. The WRU acts merely as a middle man for this money and includes it on their balance sheet as money ‘pumped’ into the game.

- £6.6m p/a in further funding, which is a bone of contention. The WRU has claimed frequently that this is for extra access to Wales international players, who are contracted to the RRW but who play for Wales for up to twenty weeks a year. This is a misrepresentation. The £6.6m breaks down as follows (approximately):

  • £2.4m split four ways as core grant
  • £2.4m split four ways as a limit for non-Welsh qualified players
  • £0.6m to contribute towards the four regional academies
  • £1.2m as compensation for releasing Wales players for extra training and extra matches not sanctioned specifically by the IRB test window

At this point, it should be clear that £1.2m to compensate for the loss of internationals is derisory and cannot be sustained. The RFU have an agreement with their clubs for the same access and this costs £13.75m, to give you an idea of the market rate for internationals.

As such, it is clear that rolling over this agreement would have been detrimental to the business of the regions due to the WRU declining to contribute any further to the £5m annual funding gap identified by a PriceWaterhouseCooper report.

However, it was also impossible for the regions to have signed due to ongoing uncertainty surrounding the £10m relating to competitions as both the HEC European Cup and Rabo league are not confirmed for next year.

So why not sit around a table and find the best way forward for Wales in the collaborative approach recommended by the PWC report? It is my firm belief that the desire of the Group Chief Executive to control all of professional rugby in Wales is behind this impasse. He is documented as stating that he believes the WRU should control the four regions (despite the PWC demonstrating they were financially in no such position to support four regions without private finance – to date £40m of private finance has been invested in the regions).

As seen from his threat to close down the regions on 31.12.13, his agenda has been to force the regions to fail by refusing to negotiate for a new, fit for purpose agreement to reflect the realities of the current economic climate. He now finds himself forced by his Board of Directors to offer a new deal to meet a RRW deadline of 31.1.14 (the deadline by which RRW have to explore alternative contracts with PRL in England) despite having had years to prepare negotiations and having refused to come to the table. The question has been posed by journalists such the Guardian’s Paul Rees and BBC Wales’ Ross Harries, ‘is the WRU trying to bankrupt the regions to pick up their players on the cheap?’ This would allow the WRU to concentrate funding on retaining Wales players, probably with two fully pro sides and two development sides: a dismantling of the successful four region model which has provided three Grand Slams, a World Cup semi final, a victorious Lions tour and a further 6N Championship.

The arrogant and divisive manner in which Lewis has acted has threatened over a thousand Welsh jobs and has threatened to devastate professional rugby in Wales for at least a generation. Is this the man who should be representing the interests of a city region in Wales?