One of Welsh rugby's biggest sponsors says it has "suspended its investment in the game" until a better funding strategy for the four regions is put in place.
Oil 4 Wales sponsor all four professional sides, and are the front of shirt sponsor for the Scarlets, while they are also heavily involved with Welsh Premiership outfit Rygbi Gogledd Cymru.
They have decided not to continue their sponsorship in Welsh rugby after they have honoured any existing contracts.
"Going forward, in light of recent events involving the resignation of three major officials at the Welsh Rugby Union and the future of Welsh rugby, Oil 4 Wales have decided to suspend any future sponsorship for both the professional and community clubs (except for the contractual agreements) with immediate effect until transparency is apparent and issues are resolved by the WRU, especially with the funding issue surrounding the regions," said Oil 4 Wales founder Colin Owens in a press statement.
"We need Welsh Rugby to return stronger than ever to our Welsh Communities with youngsters flocking to join our regions and for our regions to be back winning trophies.
"At present, Oil 4 Wales do not see any alternative until a change is made to the funding strategy from the WRU. Oil 4 Wales deeply regret having to do this and hopefully we will be back fully supporting community and professional rugby as we have done for many years."
Welsh rugby has been in complete and utter disarray for the past year, with the Welsh Rugby Union and the regions having been at loggerheads for months in an attempt to thrash out a new long-term funding deal for the professional game in Wales that was eventually agreed on March 31.
During this time there was a freeze on offering players contracts, which left many in limbo, as well as fundamental changes to contracts that very nearly resulted in strike action ahead of Wales' Six Nations clash with England in February.
In the end Cardiff, Dragons, Ospreys, and Scarlets signed a new six-year financial framework with the WRU, although many believe it to be insufficient.
When the new deal was finally rubberstamped at the end of March, Professional Rugby Board chair Malcolm Wall declared: "A great deal of work, time and effort has gone into establishing an agreement all parties can be happy with and which is designed to achieve the very best results for Welsh professional rugby from the resources available to us."
Interim WRU CEO Nigel Walker added: "We now have a structure which will provide a backdrop of stability from which we can build."
Next season the four regions will be operating on a lower playing budget of £5.2million before it eventually goes down to £4.5million for the 2024/25 season, while the wages of the players are being aggressively driven down.
Given there are sides within the United Rugby Championship who operate on over double the budgets of the Welsh regions it doesn't take a financial expert to work out the four regions are highly likely to struggle badly on the field in a league with no salary cap.
Welsh rugby has also been rocked by off-field scandals with a special taskforce set up to investigate allegations of institutional sexism and misogyny within the WRU.
This led to the resignation of WRU chief executive Steve Phillips, while finance director Tim Moss is also leaving at the end of the month in a separate development. Former chairman Rob Butcher also stood down at the end of last year before being replaced by Ieuan Evans. The WRU is currently in the process of appointing a new permanent CEO, independent chair, finance director and a number of independent directors after successfully getting significant governance reform pushed through earlier this year.
The current financial climate in Welsh rugby, along with the reputational damage, had led to many sponsors considering their position within the game in this country, prior to clubs voting through the governance changes.
Oil 4 Wales also sponsors individual players, and has heavily supported local communities in Wales.
The independent fuel supplier have invested heavily in Welsh rugby for the best part of a decade, and don't believe the current funding deal, eventually signed up to by all members of the PRB, gives the four regions the best opportunity of being competitive and winning silverware.
Read the full statement from Oil 4 Wales founder Colin Owens below:
"Oil 4 Wales, is a family run business that has been servicing the whole of Wales for over 10 years, their aim is to support the Welsh community and to encourage people to support local businesses to keep the Welsh economy growing.
Oil 4 Wales’ brand can be seen across all rugby regions in Wales in addition to numerous community rugby and sport clubs. Over the last two seasons, Oil 4 Wales became the main sponsor of the Scarlets region.
Oil 4 Wales strongly believes that their ethos of team work and working with and for the communities of Wales is replicated by both the professional and community rugby clubs in Wales. The management team at Oil 4 Wales discussed at their management meeting how they could give something back to the communities of Wales after a difficult period. As a result over £500,000 worth of heating oil was delivered Free of Charge to the vulnerable, elderly customers that had been with the company for over two years.
Going forward, in light of recent events involving the resignation of three major officials at the Welsh Rugby Union and the future of Welsh rugby, Oil 4 Wales have decided to suspend any future sponsorship for both the professional and community clubs (except for the contractual agreements) with immediate effect until transparency is apparent and issues are resolved by the WRU, especially with the funding issue surrounding the regions.
We need Welsh Rugby to return stronger than ever to our Welsh Communities with youngsters flocking to join our regions and for our regions to be back winning trophies.
At present, Oil 4 Wales do not see any alternative until a change is made to the funding strategy from the WRU. Oil 4 Wales deeply regret having to do this and hopefully we will be back fully supporting the community and professional rugby as we have done for many years."
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