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WRU explains the finances behind its ambitious plans
Principality Stadium to celebrate 25 years in 2024 [Getty Images]
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 number 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.
Having outlined 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 for the 2023-24 campaign, will apply to Cardiff, Dragons, Ospreys and Scarlets next season. Two key players are allowed outside the limit.
The governing body is keen to ensure the £4.5m figure is not confused with the £4.275m each region receives per 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 organization’s dire financial situation 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.
Broken down, the WRU estimates a funding gap of £1.45m per year per regional team over five years, bringing the total to £29m, not £35m.
Meanwhile, the WRU currently has £20m of debt, which it says is “not an unusual figure for a £100m business”.
WRU added: “It is not destabilizing. 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 financing gap in the professional game we described.”
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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 get through the pandemic.
The WRU has already identified £3m in savings for professional football in Wales.
A WRU statement said: “This money is being saved through the introduction of a shared services partnership with the four regional clubs in an agreement that forms part of the ‘One Wales’ strategy.
“This is an annual cost efficiency and was considered in calculating the funding gap described.
“The appointment of a new head of commercial growth will oversee this shared services work, as well as looking to increase the commercial value of the professional game in Wales, to further close the funding gap.”
