So, some 20 days on from the dropping of the bombshell, simply the place can we stand now? What precisely is the long run for regional rugby in Wales?
Properly, the very first thing to say is nothing has been determined but. As one among my contacts succinctly put it in the present day: “Conferences proceed”. Certainly there’s one other vital one deliberate for this week.
However what we do have now’s a recent backdrop within the wake of Nigel Walker’s look on ScrumV. It was the WRU efficiency director who immediately introduced up the elephant within the studio by referencing the Oakwell Report into the funds of the sport in Wales. It’s 85 pages lengthy and incorporates a “complete raft of choices” to make use of Walker’s phrases. However, inevitably, it was the choice of axing one of many 4 areas that grabbed the headlines and set the agenda.
Loads of individuals have had their say on the matter over the previous couple of weeks and the response to the proposal has been just about overwhelmingly destructive. Now right here we had a WRU official talking about it for the primary time.
Walker’s message was fairly clear. No one in Welsh rugby needs to go from 4 to 3, not the areas, not the WRU. So there we’re, that’s the top of the matter. Properly, besides it’s a bit extra nuanced than that. Not eager to do one thing is completely different from ruling it out altogether.
Walker’s last phrases are price revisiting. He mentioned: “We’ve obtained to discover a construction which works and we’ve obtained to in a position to fund it on the applicable stage to maintain 4 areas going ahead.” Now you can learn a lot of alternative ways.
For me, it raises a key query. Is Welsh rugby in a position to fund 4 areas to “an applicable stage”? If the reply to that’s no, then what do you do? Presumably the priority over whether or not that’s doable is why reducing to 3 was steered within the Oakwell Report. In pure financial phrases, it was considerably inevitable it will be raised given the out there funds.
There’s a widespread view that decreasing the participant pool to such an extent could possibly be deeply damaging from a rugby perspective. There’s additionally the human ingredient by way of this being individuals’s livelihoods we’re speaking about and in addition the extent to which loyal supporters have invested within the respective areas through the years.
You can too query whether or not it actually would stack up financially, as you’ll have lots of people to repay, plus there would in all probability be compensation to URC for not fulfilling the duty of offering 4 groups, whereas competitors and TV earnings would additionally lower. There may be the potential for working financial savings evaporating amid prices.
There’s additionally the sensible points. You aren’t going to get one of many 4 areas willingly falling on their sword, in turkey-voting-for-Christmas fashion. As Walker says, the will of the Skilled Rugby Board – which options representatives from the professional groups – is to take care of 4 areas. So the PRB isn’t going to be voting for ditching one among them.
In fact, that isn’t essentially the top of the matter. The last word energy lies with the WRU board, on which the group golf equipment maintain the bulk. The Union government – headed up by CEO Steve Phillips – might in concept go to them and search approval for reducing to 3 groups. Ditching one of many unbiased groups might show problematic and messy, with authorized obstacles to beat, which has led individuals to see the WRU-owned Dragons as probably the most weak outfit.
So might it occur? Properly, it’s not not possible, however it doesn’t appear the likeliest course of occasions, given the dimensions of the opposition to the thought and the varied public pronouncements.
The overall impression I get is we are going to proceed with 4 groups, whereas doubtlessly restructuring the funding mannequin. With regards to which, there’s a brand new ‘R’ phrase in Welsh rugby – roles. It has been talked about just a few instances during the last week or so.
The assertion from the PRB within the wake of the leaking of the Oakwell Report was that it was “dedicated to working collectively to make sure all 4 areas proceed to play vital roles within the skilled recreation”. You then had Dragons chairman David Buttress saying all 4 groups have “a unique function” and “a unique objective”. And now Nigel Walker has chimed in on an identical word, saying the PRB have been trying fastidiously at what the roles of the areas must be.
So what’s this all about? Why has it immediately grow to be the thrill phrase? Properly, it could possibly be seen as some type of code, pointing at a remodelling of the funding method. Now we’ve been down this path earlier than, with speak of a 2+2 system, with two of areas chosen for enhanced funding. There have additionally been rumours of a 3+1 or perhaps a 1+3 making a Welsh Leinster. Select your equation of choice.
However, as soon as once more, the issue is reaching settlement. It’s onerous to see two of the edges voluntarily agreeing to secondary standing in funding phrases or any of them accepting a growth area function. Ospreys chief government Nick Garcia has made it clear he feels it must be a stage enjoying discipline on the funding entrance whereas Dragons boss Buttress has dismissed the notion of a growth group.
With the areas unlikely to succeed in unanimous settlement on a radical redistribution of funds, it will once more have to come back right down to the WRU imposing a coverage change, with all of the resultant outcry, so not a simple one.
As issues stand, the way in which the out there pot of money is split up depends closely on the make up of the elite group of 38 home-based gamers chosen every year by Wayne Pivac. Basically, the extra gamers you’ve got within the 38, the larger the slice of the monetary pie you obtain. That system seems to be more likely to proceed because the Union are eager on it, though it stays to be seen whether or not will probably be amended or modified.
The WRU fee pot for subsequent season is anticipated to be across the £22m or £23m mark, which is just about the identical because it was this time period. We wait to study whether or not there be will any type of completely different mannequin transferring ahead, by way of how the money is cut up up.
However there may be an argument that if the general sum of money stays the identical, then reducing the cake up otherwise is simply rearranging the deckchairs on the Titanic having did not navigate previous the iceberg. Or, to place it one other approach, it’s making use of fudging to the cake.
All of which brings us on to the age-old query of whether or not the pot of cash must be elevated and whether or not the areas are receiving enough monetary backing from the WRU, with the distinction with the IRFU funding for the Irish provinces usually being raised.
Now there seems to be a transparent latest narrative from the Union that their funding of the areas is definitely on an identical scale to the IRFU, with Walker saying it was inside one per cent. What we have to see then is the figures. It’s very tough to work out from the IRFU accounts simply how a lot of its expenditure on the professional recreation goes on the provinces.
If the WRU are claiming an identical spend, then we want the small print actually. Some transparency on this topic can be very welcome. The Union might effectively level to a lot of the Irish provinces’ earnings being self-generated through gate receipts and business exercise, however that’s a legacy of sustained success which, in flip, is a legacy of sustained IRFU funding over a few years.
On the funds, it will even be good to know simply what is going on with the £51m of CVC Six Nations cash that the WRU is receiving. Steve Phillips mentioned the plan was for the majority of it to be spent on capital tasks. Is that also the case? It didn’t go in the direction of the much-criticised Parkgate Lodge mission as that pre-dated the CVC cash approaching line. So the place is it going? Is any of it going within the PRB pot given the urgent want for funding within the professional groups?
The truth is there doesn’t appear a lot likelihood of the fee pot being swelled within the foreseeable future, so the place can we go from right here? Properly, a method of sustaining 4 groups amid flatlining earnings is decreasing prices. We’re already seeing that taking place with the areas reducing the dimensions of their squads amid mass departures. One different approach of doing it’s by driving down salaries, so we wait to see what’s going to occur on that entrance, with the wage banding system. You’ll be able to see a good bit of cloth-cutting arising over the following few years.
Within the quick time period, there are some vital cash-flow points on the horizon. The losses accrued by the areas via Covid are sizeable and there aren’t any extra emergency grants approaching stream, whereas they’ve that much-debated £20m loan to repay.
It’s a extremely difficult state of affairs they usually might do with assist to maintain their heads above water. In accordance with the WRU accounts, the Union do have a multi-million pound borrowing facility they usually might effectively have to utilise that to navigate the areas via some very uneven waters.
So the sense I get is the main focus is more likely to be on surviving the following couple of years with 4 groups intact. That’s the short-term goal and, in tandem with that, there’s a long term goal of building a sustainable monetary mannequin. It’s simpler mentioned than finished, in fact, and, as ever, there are massive, massive choices to be made.