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Welsh Rugby Union explains the finances behind its future plans
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Image caption, Principality Stadium celebrates 25 years on 2024June 29, 2024, 10:43am BST
Updated 5 hours ago
The Welsh Rugby Union announced a five-year plan for the future of Welsh rugby this week.
Chief executive Abi Tierney and chairman Richard Collier-Keywood discussed a range of targets for 2029, including having national teams consistently ranked in the top five in the world.
They also addressed goals such as having club teams compete in the United Rugby Championship (URC) and Celtic Challenge play-offs.
After outlining its future plans, the WRU has since sought to clarify the financial details underlying its objectives.
The £4.5m salary cap, a reduction from £5.2m in the 2023-24 campaign, will apply to Cardiff, Dragons, Ospreys and Scarlets next season. Two important players are allowed outside the limit.
The governing body is keen to ensure that the £4.5m figure is not confused with the £4.275m each region receives each year from the WRU “in return for their services, namely the supply of players for the international game”.
One of the aims of the WRU’s ‘One Wales’ strategy is to increase this level of funding.
Welsh rugby’s struggles have been well documented, as have the WRU’s own problems.
But the difficult financial situation of the corps was revealed.
It was stated that there is a £35 million funding gap for the regions over the next five years, putting the future of all four regions in doubt. However, this specific amount has since been revised to £29 million.
Drilling down further, the WRU estimates a gap of £1.45m in funding per year, per regional team over five years, totalling £29m, not £35m.
Meanwhile, WRU is currently £20m in debt, which it says is “not an unusual figure for a £100m business”.
The WRU added: “It is not destabilising. The business is in a stable condition.
“However, there is value to be gained from refinancing this debt and it will help us fill the funding gap in the professional game that we have described.”
The WRU confirmed that the debt is held by the regional clubs, adding that this “has an impact on their ability to raise additional debt financing”.
As with many companies, the Covid pandemic has added to WRU’s financial problems.
The Welsh Government has awarded Welsh rugby £13 million in grants to help it through the pandemic.
The WRU has already identified £3 million in savings across the professional game in Wales.
A statement from the WRU said: “This money is saved by introducing a shared services collaboration with the four regional clubs in a deal that forms part of the ‘One Wales’ strategy.
“This is an annual cost efficiency and was considered in calculating the funding gap described.
“A newly appointed head of commercial growth will oversee this shared services work, as well as looking to grow the commercial value of the professional game in Wales – to further bridge the funding gap.”