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Robert Davies lets rip at Roger

Ospreys shareholder Robert Davies was interviewed by Ian Hunt on Radio Wales last night. Here’s what he had to say.

IH:
“… before that’s we’re going to look at rugby. We touched on the Six Nations right at the top of the program, of course, and the top Wales players are nicely cocooned away from all the politics swirling around Welsh rugby right now. But the Six Nations continues against a backdrop of more discussions and debate over the future of the domestic game with meetings taking place in London today and Dublin tomorrow partly aimed at thrashing out which competitions the Welsh regions will be playing in next season. A row brewing also over the missing £800,000 the Regions’ claim they haven’t been paid for this season’s Heineken Cup. It’s emerged that they could take legal action if the European Rugby Cup decide to withhold this money. Well, last night the WRU Chief Executive Roger Lewis gave us his thoughts on this and the various issues. Earlier though I got a regional perspective from Robert Davies, speaking in a personal capacity as the major shareholder at the Ospreys. Here’s what he had to say”.

RD:
“I was quite shocked to read your report, the BBC that is, report about what Mr Lewis had said and he was saying that:
- firstly the regions are open to the idea of expanding national contracts – that’s untrue;
- both sides plan to make more deals – that’s untrue;
- we have a plan on the table that we are discussing – that’s untrue;
- the regions have engaged with that plan – that’s untrue;
- WRU has been working on the plan for several months – that’s untrue;
and
- (the) regions originally contacted the Union to keep six players in Wales – well that’s untrue

In fact, there is no relationship with the Regions and the Regions have been consistent in the view there is no system to support central contracts in Wales”

IH:
“Yes, well Regional Rugby Wales have reiterated today they stand by what they said last week about central contracts, namely that no agreement is in place to play players who are centrally contracted”

RD:
“That’s correct”

IH:
“Can you outline, you know, the issues around this and what the objections are to central contracts”

RD:
“Well, it’s not being debated. It’s just something that has been put on the table by Mr Lewis and has not been debated as to whether or not it’s good for Wales, whether it’s bad for Wales, it’s not part of a strategy, it’s not part of a plan. The PwC report which the Union commissioned actually stressed the need to increase revenues. Now, those revenues can only come from the club game in reality because the international game is saturated with fixtures. And therefore what we try to do is to increase revenues for our own benefit and for the benefit of the retention of those players in Wales and there has just been no debate about central contracts whatsoever”

IH:
“Do you not think it is a good plan, though? I mean, if we’re struggling to keep players here in Wales… we’re losing players to France and to England left, right and centre. Isn’t it a good thing if it will…”

RD:
“Well, there’s no proof that the players will stay in Wales. It’s got to be part of an overall plan. We employ 400-500 professional people. To employ one or two is not going to build the base for a professional sport in Wales, that’s not going to do it. You have to have a whole plan not just a plan that grabs headlines and says that certain marquee players are staying in Wales. We’ve got one player so far, fine, good luck to him. But the issue needs hundreds of players”.

IH:
“Can they contract anyone down at the Ospreys? I mean Alun Wyn Jones has signed with the Ospreys”.

RD:
“Well, anybody who’s out of contract with the Ospreys, yes of course they can sign, there’s no way they can’t”.

IH:
“Would you see that that happening?”

RD:
“No”.

IH:
“You don’t think any Ospreys players will end up being centrally contracted?”

RD:
“Highly unlikely…because, the players are already contracted other than one and we’re in discussions with that one. As I say, you have one or two or three players centrally contracted, it just doesn’t work. The Union tried it once before with, I think the first player to be contracted centrally strangely enough was Derwyn Jones who was Warburton’s agent, and that proved not to be successful because there was no plan to go with it. If there was a plan to increase the strength of rugby in Wales, right throughout, all the way down to the grass-roots, fine, let’s debate it. But there is no plan, or at least not one that we’re aware of”.

IH:
“Can I ask you Robert about the other issues swirling around at the moment? There are two big meetings this week to try and resolve the future of all the various competitions. There’s one today in London. Do you know what happened at that meeting?”

RD:
“I haven’t heard as yet, I’m not sure if it’s finished, but it would to be very difficult if there’s anything to come out of it as the English have stated, they stated a long time ago, eighteen months ago, that they will not participate in the European competition. And that will not change. So therefore I cannot see how anything can come out of that meeting today. But I haven’t heard”

IH:
“There’s a big meeting in Dublin tomorrow, ERC meeting, which the Regions have been invited to attend. Do you know whether they’ll be sending someone to that?”

RD:
“We won’t be.”

IH:
“Why not?”

RD:
“Because there’s no point. Look, this is the ERC, this goes to the root of the differences between us. The ERC is run by the Unions and they, this week, have decided not to pay the Regions in Wales £800,000 which is due to them. Nobody had the decency to tell anybody. This was to enable the Regions to pay the players wages. The WRU’s FD Steve Phillips attended the meeting when they decided not to make the payment. He did not inform the Regions and the Regions had to make arrangements to pay the wages themselves. We’re not going to turn out there as one vote out of many and just be like nodding donkey. There’s just no point. There’s nothing we can contribute and nothing they want us to contribute.”

IH:
“But surely its in your interests to attend to fight your corner, isn’t it?”

RD:
“We have written to them today voicing our concerns, but one vote out of many, there’s just no point in being there because we know this is just a kangaroo court”

IH:
“That sounds like a defeatist attitude though doesn’t it? I mean, if you’ve got a seat on the board…”

RD:
“No, no, we’ve written to them today and we expect them to honour the agreements they’ve committed to”.

IH:
“How tough has it been, Robert, for the Regions to, you know, to bridge the gap with this money missing? How tough has that been? As you’ve alluded to already you have had to scrabble around to pay the wages, haven’t you?”

RD:
“Well it’s no different to any other business if, suddenly, you’re confronted with somebody who’s promised to pay you – and they don’t – a large sum of money and you have to make alternative arrangements to cover the shortfall. And that’s what we did last Friday and we covered it to enable the wages to be paid. But it’s no way to run a business. We’ve got no relationship, any meaningful or trustworthy relationship, with the Union. It’s no way to conduct any business let alone one like the WRU which is really a public body. It’s disgraceful”.

IH:
“If this money isn’t paid, what’s the worst case scenario? Could this send one of the regions out of business?”

RD:
“Well, at the end the day, we are owed a lot of lot of money, and maybe it’s a way of the Union threatening us again. There is a history of threatening and using the big stick. That’s one of the reasons why we no longer wish to be party to an organisation that’s run by the Unions. We would rather be dealing with proper business people who act in good faith. And the outcome? Who knows? If they continue not to pay us we will have to make alternative arrangements, and that could be legal or financial”

IH:
“Better in terms of alternative cup competitions for next season? Are you as Regions determined to pursue an alternative European competition that isn’t run by the ERC?”

RD:
“Well, at the moment there is no alternative competition. The ERC has had notice for over 18 months that this is going to happen. We’ve warned them. We’ve repeatedly asked them ‘what are you going to do?’. Our own agreement has come to an end. We’re left just wondering where we’re going to play? There is no Rabo for next year, there’s no European for next year. We’re expected to commit to a payroll and pay players costing us £4-5 million per year and it’s very unfair. We don’t know what income we’re going to have. So, to answer your question, unless the Union comes up and tells us well there is a Europe we can participate in meaningfully, and by that I mean financially meaningful, then I can’t see us agreeing anything other than an Anglo-Welsh”.

IH:
“I was going to say, if the Union sort of meet you halfway, if you find some middle ground on the European Cup issue, would you drop plans to join an Anglo-Welsh league?

RD:
“Look, we’ve been trying to negotiate with the Union for a long, long time. It’s very, very difficult for us to have any sensible discussion with the Union. They’ve reneged on so many agreements with us, there’s no trust left”.

SG:
“These are difficult times, aren’t they Robert? I just wonder if…”

RD:
“Very difficult and it’s very sad. I’m looking forward to going to Ireland this weekend, one of 10,000 or more Welshmen. We’ve all bought our tickets paid for our hotels, paid for our beer, our own food and we enjoy ourselves, and it’s very sad that we should be going there in this atmosphere where we don’t know, next year, what the game is going to look like. And this is a game we’ve all supported for many, many years. It’s very, very sad, and the Union board itself should be looking at itself. I don’t think that anybody comes out very well out of this, but the Union Board itself should have shown more leadership, more decisiveness, more honesty, more integrity. Everybody’s complicit in this and we need really to have a look at the way we run the game in Wales”.

IH:
“Strong words there from the Robert Davies said who’s speaking as a major shareholder at the Ospreys. Regional Rugby Wales, the umbrella organisation acting on behalf of the Regions, declined to respond to what Roger Lewis told this programme last night, apart from reiterating the stance they made last week on central contracts, namely that there is no agreement in place to play centrally contracted players at the Regions.

Violin Section

Fiddling while Rome burns: WRU proposing more changes to league structure

A couple of weeks ago, the WRU sent this letter outlining more planned changes to the structure of the middle and lower leagues in Wales.

There are several problems with the proposal:

  • They need an extra 24 refs for the new Div 1 and 2 – these will be drawn from Level 2 refs currently reffing Youth/2nd team rugby
  • Teams currently in Div 6 will play teams from current Div 3/4 next season. These means a lot of mismatches and dilution of quality of the games
  • Has this been agreed by the WRU Head of Rugby and Head of Refs? If it hasn’t, what does that say about the way the WRU is behaving?

This will undoubtedly lead to a lot of smaller clubs getting pissed off with having beatings dished out to them by much better teams on a regular basis. Many of these clubs and their players may just give up. This doesn’t seem to be a very sensible approach for the WRU to be adopting at a time when they need to bolster their support at grassroots level instead of alienating it.

To all Referee Society Secretaries and P.B. Executive

Following on from last Friday nights Parent Body meeting where we discussed next years league and fee structures I have listed below a number of bullet points for further discussion with your members, which we discussed at the meeting.

  1. As stated on Friday, next season (2014-15) we have a potential increase of games from 126 this season to 155 next season
  2. The number of officials at Level 3 will increase from approx. 150 to 180 in order to service the increase
  3. The lowest league proposed for next season is Division 3 which will be regionalised
  4. Divisions 1 & 2 will become 4 divisions within each. Currently these are 1E & W and 2E & W.
  5. There will be obvious dilution in the quality of games within these two leagues
  6. A third division being created in North Wales will add extra cost. When you consider it costs the department approximately 200/230 pounds to send a referee to NW or vice versa to SW.
  7. We will need an extra 24 referees to referee at Div 1 & 2 next season
  8. Our development pathway will be eroded in as much as Level 2 referees will now move straight from Youth/Second team rugby to Division 3
  9. If the fee structure were to stay the same (up to Dev 3 which will be the lowest league next season) there is a potential budget increase of £41880.00. This will be in match fees only. This does not account for mileage which is somewhat of an uncontrollable
  10. With the proposal that I have put forward which I believe is a fair and responsible one we will still have an increase of £21110.00
  11. There will be an obvious number of mismatches next season when Div 6 teams come up against teams from Div 3 / Div 4

Just to put you in the picture for those who are not familiar with next year’s league structure and how it will look I have outlined below.

Season 2014/15

Premiership – no structural change

Championship – no structural change

Division 1 – 4 leagues of 12 clubs, which will consist of the current 24 clubs in Division 1 plus the 24 clubs in Division 2 (league based on geography)

Division 2 – 4 leagues of 12 clubs, which will consist of the current 48 clubs from Division 3 (League based on geography)

Division 3 – There will be 13 Divisions consisting of the 48 clubs from Division 4, the 60 clubs from Division 5 and the 39 clubs from Division 6 (the 147 clubs will be assigned a league dependant on geography)

Division 1 N – 12 clubs

Division 2 N – 10 clubs

Division 3 N – 10 clubs

I hope the above gives you a bit more of an insight into the challenges that lie ahead and as always if there are any queries please do not hesitate to call me. As stated I have to factor in the dilution of the system and quality of the rugby that will be played in certain leagues next season.

I look forward to your response in early February as outlined in the meeting. By then we can hopefully work together and move this amended structure forward.

Bierley_Newport_Road_post_box_snow_2

A Question of Trust

There’s been plenty of debate about the BBC Wales ScrumV Special which aired on 19th January. I wrote about my impressions of the recording and subsequent broadcast here.

However there hasn’t been a response from the BBC. A group of us who were at the recording have written a letter of complaint to the BBC Trust and the BBC Complaints Department. The contents of that letter are reproduced below.

We write to you with concerns over the recent ScrumV programme on the 19th January on BBC Wales having been audience members and subsequently viewers of the show.

We appreciate that this may generally sit with the BBC Complaints department and have copied them in on this correspondence so they may also respond accordingly but as there are question marks over several issues such as editorial content and commercial relationships, we thought it best to address the issue to yourselves also. 

The show was sold to us as a ‘Question Time’ warts and all format, intentionally shot over a short period to get some answers from the panel and an honest viewpoint of the current situation in Welsh rugby with plenty of interaction, discussion and questions from a varied audience of regional, club and international supporters of all ages and genders.

Many of us did a great deal of preparation in anticipation of a ground-breaking show in respect of rugby in Wales and we were hugely disappointed to instead listen to the panel discuss pre-planned topics with a handful of opinions from the audience rather than questions and no opportunities to put any questions forward to the panel. The production team had specifically asked us to provide questions prior to the recording. None of these questions were used.

We were led to believe that the programme would be in the Question Time style. Before the recording started we were encouraged to put our hands up during the show if we had any questions or wanted to express our opinions. We were also encouraged to make our feelings known through applause or boos so the show would accurately reflect the audience’s mood.

In respect of the format of the show we left the studio disenchanted and frustrated having prepared and taken time out of our weekends to travel from all over Wales. We appreciate that the set-up of the show is entirely the BBC’s prerogative, but we feel we were invited to the show under false pretences. We were led to expect an interactive programme but it was nothing of the sort.

Our frustration turned to anger when we watched the recording later that day. We had not expected much having been there, but as the very least we thought we’d left the studio safe in the knowledge that whilst we weren’t able to direct questions at the panel or voice our concerns or approval, we did express our feelings through the applause, laughter and boos. However, it transpired that this wasn’t reflected in the final edit.

Several of the comments made by Roger Lewis were followed by jeering and various comments were made by us in the audience. However, the audience reaction only came across once during the broadcast version of the show, which made the debate seem much more amicable and considerably less confrontational than it was. Even some of the more confrontational comments from the panel and host were edited out, for example when Gareth Lewis pushed Roger Lewis for an answer as to whether the WRU had looked to set up new regions.

There were several further examples of this with what appeared to be the one common theme that the show was edited in order to be favourable to the WRU and Roger Lewis. For those of us in the studio there was no question that there was a very clear discontent with the WRU from the majority of the audience which did not come across in the final edit.

The whole WRU/RRW/Welsh Rugby debate has been poorly reported by BBC Wales and ScrumV, after being very late arriving at the party the impartiality has been questionable on simply too many occasions. You only have to look at the way the impasse is being reported by both local and national newspapers such as The Times, The Guardian, The Rugby Paper and Evening Post to see a balanced unbiased view on the topic; indeed Paul Rees’ article in the Guardian on the ScrumV programme in question (he was a panellist on the programme but was given limited opportunity to speak) speaks volumes on the standard and impartiality of the show and reporting of the topic.

This raises many questions over not only the individual show but also whether BBC Wales is profoundly compromised by their commercial relationship with the WRU and/or its employees. The indisputable difference between the unedited and edited version can’t be masqueraded as coincidence or poor editing so there appears to be something untoward. We know that the WRU were accompanied by their legal representatives when they attended the recording and we are concerned that the presence of these representatives may have adversely affected the balance of the programme which went to air.

We anticipate that BBC Wales Complaints will be well versed in respect of responding to this issue as they will no doubt already have had complaints on the matter. We expect that the BBC Trust will be able to delve a little deeper than the likely response from BBC Wales Complaints (having to edit the show as it overran, giving the panel sufficient airtime or whatever stock answers are generally given) and give us a meaningful response.

The public generally look to the BBC for unbiased and objective news and content and BBC Wales and ScrumV’s recent actions and coverage have brought into question whether the BBC is acting correctly in their role as a public service broadcaster and we implore you to fully investigate this. We feel that we have very real and legitimate concerns and we would be reassured to know that this issue is being treated seriously and would welcome any feedback you could give us and if you require any further information from us we are more than happy to assist.

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The sum total of desperation

A statement was recently released by the WRU purporting to outline its philosophy and success with debt. I’m no accountant but I do have an MBA which makes me very good at spotting a bullshitter.

Here is their statement in full:-

WRU Bulletin to clubs – bank debt

The Welsh Rugby Union, in response to questions from its member clubs, has decided to address recent comment about its debt management policies since 2006, suggesting they are hindering re-investment into the game. This is not the case as this note clearly outlines.

Through negotiation with the bank since 2006 the WRU has:

- reduced its interest rates by 58% from 6.5% to 4.1%

– kept its cash repayments at exactly the same levels
- achieved a course to become debt free by 2021
– boosted reinvestment into rugby by 86% from £11.8m to £22m a year

The negotiated drop in interest rates has, between 2006 and 2013, reduced the interest costs by £1.8m which is now available to plough back into Welsh rugby year on year.

By sound financial management and ensuring compliance with the banking terms, the WRU wishes to avoid the conditions of repayment of the original £10m loan being met.

Since 2006 the WRU has carried out two successful renegotiations with Barclays Bank plc which have allowed the governing body to make its banking arrangement far more flexible and to reduce its interest costs. The overall bank debt stood at just below £19.5m in 2013 down from its 2006 level of £39.1m.

It is important to note that the fundamental priority of the WRU is not to become debt free but to manage its loans in an efficient and flexible manner to drive down its interest costs to promote further re-investment in the game.

If the WRU were to seek to renegotiate its current debt structure the interest rate of 4.1% would probably rise meaning that money currently invested in the game would be paid in interest instead each year and the term of the arrangement would reduce.

In simple terms the current debt repayment structure is a valuable business asset in that it helps us invest more money into the game year on year.

The successful bank negotiations mean that the vastly improved loan terms have been achieved without a penny increase in the annual cash repayments since 2006.

One core reason why the banks now have renewed confidence in the WRU is that since 2006 our turnover has gone up by 32% from £46.1m to £61m.

The increased turnover and revised banking arrangements have helped the reinvestment into the game since 2006 rise 102% into the Regional game, 50% into the Premiership Division and 48% into the community game. The revised banking arrangements have very much aided the re-investment and not hindered it.

In figures those increases are:

- from £8.3m to £16.8m for the Regions
– from £0.8m to £1.2m for the Premiership
– and from £2.7m to £4.0m for the community game

The WRU wants to put on record its gratitude to Barclays Bank for the confidence it shows in the governing body and continued support.

ENDS

So, do they want to be debt free or not? They think they are some kind of financial wizard ‘negotiating’ with Barclays Bank but have only managed to do this twice in 8 years!

The genius of the maths is the reduction in interest rates. The WRU think moving interest from 6.5% to 4.1% is a 58% reduction. I may have an MBA but my 12 year old will put them right on this, it’s actually 37%.

This begs the question, are they competent enough to manage a business turning over £61 million? Or are they being smart, thinking they can kid every one with their bluster?

So the WRU don’t know if they want to be debt free or not, don’t know how to calculate simple percentages and can only manage bank negotiations every four years. And why do they still think they are “investing” £16.8 million in the regional game when > more than 10 million is just broadcasting money which is passed straight through to the regions.

Either, the WRU are fools OR they think we are. Unfortunately I think it’s both.

Flock of sheep

Central Contracts: the differences and similarities between NZ and Welsh Rugby

There is currently a lot of interest in the differences between the NZ and Welsh Rugby structures. Having been CEO of both organisations and delivering Pro Rugby in NZ and Regional Rugby in Wales I might have some knowledge to impart of how each country works. In the table below I set out the current structure in both countries. There are obvious differences; however I do propose a structure for Wales at the end.

New Zealand

Wales

The 600 clubs (Wikipedia/IRB) are the owners of the game in NZ. The 330 clubs (WRU) are the owners of the game in Wales.
The clubs are distributed around NZ and are formally part of one of 26 Provinces. The clubs are distributed around Wales and are formally part of 9 Districts.
The clubs elect a board to their Provincial Governing body. The clubs elect a board to their District body.
The PGB’s elect members to a 9 man NZ Board, which does not include the CEO. The Districts elect 13 members to a 17 man WRU Board which includes the CEO.
The NZRU owns the 5 Super Rugby Franchises, although they have recently decided to sell shares to PGB’s and individuals. The Union still Centrally Contract all pro players and control most sources of revenue. TV, commercial etc. The SRF’s keep all gate receipts and some commercial revenue. The 4 Professional teams in Wales – referred to as Regions are privately owned. They are funded by TV Revenue which is negotiated by the Union, some additional WRU funding and additional income from gate receipts and commercial activities. They are responsible for contracting their elite squad. They provide the players for Wales at a level higher than IRB requirements.
The Union sets policy and maintains control of Inter provincial competitions at all age groups. They also provide high level support for the development of the game. They provide direct funding to PGB’s who in turn are responsible for the Provincial Teams, clubs, schools, juniors, girls and women and Maori teams. This support involves some funding and grass roots development The Union controls all aspects of the game in Wales, including development of players and all income. The Regions are barred from having any involvement in the development of the game. The Union controls all levels of club competition in Wales. They have recently introduced Central Contracts and have succeeded in signing 1 player on a contract that makes it impossible for their own Regions to compete with them.

 

There are 3 glaring difference between the 2 systems:

  1. The NZRU owns the Professional Franchises and centrally contracts all professional players.
  2. The NZRU has a much more mature and evolving approach to the ownership of the franchises.
  3. The NZRU (clubs) trust their PGB’s work in their best interests and be a fundamental part of the development of the game. This includes opportunities to raise funds.

So, what is the solution for Wales?

Once an agreement has been reached on the way forward for the pro game in Wales, it is my view that the critical next step is to address the issue of governance. This does not need a long drawn out study at huge cost. It needs to be discussed by the owners (clubs), agreed then acted upon.

This is an option that I favour, would be easy to introduce and would be easy to implement. It would approximate the NZ model whilst still recognising the history of Welsh Rugby.

The key to any governance change to ease the tension between the Pro and Community game is to give fans a reason to buy in. New history and tradition has to start somewhere. It is a matter of record that the WRU, in particular and the Regions have not evolved the Regional structure. This shows a genuine lack of leadership.

  1. Maintain ownership and control with the clubs.
  2. Disband 9 Districts and replace with 4 Rugby Provinces and 1 Development Province.
  3. Clubs in each Province would elect a Provincial Rugby Board.
  4. Each PRB would elect 2 Board members to the WRU. There would be 3 Independent board members elected at the AGM by all clubs. The CEO would not be a board member = 11 member board.
  5. Provinces given meaningful and historical names that are easy to say and remember i.e. Gwent
  6. The Pro Team represents the Province and is called say Gwent Dragons. There is no mention of any existing team in the names i.e. Newport. There should be a rep from the PRB on the pro team.
  7. The Provinces are given devolved rights such as the development of the game in their Province according to protocols set down by the Board of WRU. There would be other devolved powers operating under WRU protocols.
  8. The marketing and branding of the province is a joint initiative with WRU. Every team in the province would be encouraged to have a provincial badge on their kit.
  9. Not only would this encourage a sense of belonging but loyalty as well. The threat of football needs to be taken seriously in all this debate as more and more kids follow Swansea and Cardiff.

Many people will say they favour splitting the Pro and Community game. NZ does not do that and they are the most cohesive, well run Rugby Union in the history of the game.

These are my thoughts and I will be seeking to raise them at the forthcoming Rugby Debates on the future of Welsh Rugby.

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