Welsh rugby is coming to terms with a proposal in a new report which floats the idea of cutting the number of professional regional teams in Wales from four to three.
It needs to be stressed it is only one of the proposals in the document by consultants Oakwell Sports Advisory. Other options are also on the table.
But it has caused alarm among supporters and concern among the Welsh Rugby Players Association, some of whose members could be affected.
Read more: What happened with the Scarlets-Ospreys merger idea last time and why it's being mooted again
The issues involved are highly complicated. Mark Orders takes a look in this explainer piece...
Another bombshell for Welsh rugby
Some would see it like that, certainly. More seasoned Welsh rugby observers might sigh and reason that Welsh rugby is never far away from a bombshell or a crisis of some sort. Too many from down the decades to cite here.
But, yes, it’s fair to say there is deep concern in certain areas of Wales right now over some of the proposals contained in a new report.
Some call it the Oakwell report, as it was put together by Oakwell Sports Advisory (OSA). Others call it the Umbers report, presumably after Andrew Umbers, who is part of the team at OSA. Officially, the document’s title is not-so-snappy an Independent Review Into The Financial Health Of Welsh Rugby. Those who might encounter adverse consequences because of its findings will probably have other names for it.
It's been commissioned for the Professional Rugby Board (PRB), the organisation that runs the game in Wales with members from the four regions and the WRU.
The body is eight-strong, with Alun Jones (Cardiff Rugby), David Buttress (Dragons), Nick Garcia (Ospreys) and Simon Muderack (Scarlets) representing the four regions. Steve Phillips (CEO) and Tim Moss (finance director) are the two Welsh Rugby Union figures on the board and there are also two independents in chair Malcolm Wall and also Marianne Okland.
PRB meetings are also attended by the WRU’s performance director Nigel Walker and the chair of the Rugby Management Board, Jon Daniels. Their next meeting is next Wednesday, May 11 - when the proposals in the report will be discussed.
What are the ideas that have prompted such a fuss?
The headline grabber is a proposal to cut one professional region from the season after next. There’s a suggestion that the region deemed surplus to requirements would drop into the semi-pro Welsh Premiership. In reality, it would mean the end for the impacted team.
“There would be no future,” said a regional source. “There would be no pathway. It would be over."
To say the four regions have been swimming in choppy financial waters is an understatement. In 2020 they had their payments for services - namely the players for international duty - slashed amid the pandemic from £26 million to £3m. The WRU took out a £20m loan which will have to be paid back over 20 years by the regions themselves, even though the aforementioned services were still provided.
The WRU are focusing on investing in long-term capital projects, such as the new Parkgate Hotel on Westgate Street, and believe such moves will eventually reap dividends. They are set to invest the £51m CVC money in similar projects. Some in regional rugby feel the union should be ploughing a portion of that cash into professional rugby here and now, to ease the regions' financial concerns.
The regions' woes
Financially challenged, the regions have found the going tough on the field, with there being no need for them to bring out the Brasso to shine up league silverware in recent times. The last Welsh side to take honours on that front were the Scarlets in 2017.
None of them made the cut for the United Rugby Championship play-offs this year, meaning Wales will have just one team in the Heineken Champions Cup next term, and that side will only dine at the top table courtesy of the guaranteed place handed to the winners of the Welsh Shield. That's the mini league within the league between the four Welsh sides.
To cap a miserable campaign in Welsh rugby, Wayne Pivac's national team lost at home to Italy for the first time, ending an underwhelming Six Nations. From winning the title in 2021, they fell to fifth in the table in 2022. “It’s the classic agony and ecstasy of Welsh rugby,” said union chief executive Steve Phillips recently.
Ecstasy seems to have done a runner from the game here of late, though.
And with the national team also hitting trouble, amid signs of deep concern in age-grade rugby, red lights are flashing all over the place. There are fears that if the Wales national side fail, the whole game here will fail.
"To have a successful Welsh team you need four teams because of numbers,” a regional insider insisted to WalesOnline.
Player numbers in the pro game in Wales would indeed be reduced in the event of losing a region: of course they would, with the the player pool reduced to 135 players with 45 in each squad. You can read more about calls for regional rugby to be scrapped here.
Which teams are under threat?
There’s certainly nothing set in stone on that front, but the Dragons are WRU-owned, while some feel the Ospreys not having their own ground could count against them.
It’s also been mooted generally that the idea of a Scarlets-Ospreys merger could be back on the table despite it being h owled down amid outrage from supporters of both regions when it was mooted in 2019. But a source said to WalesOnline. “It’s not a case of one or two regions being at risk. Everyone’s at risk. There are just proposals in a report."
The document reckons cutting the number of regions from four to three would save £7.8m immediately. At the very least such a move would result in a £6m saving, with the upper estimate being £8.9m.
Cardiff and the Scarlets would certainly appear to be secure.
Other options on the table
It needs to be said Oakwell are not one-club golfers. It's not just about cutting a region.
They have come up with other suggestions to ease Welsh rugby’s financial plight, among them an idea of a different player funding model. The current one sees the WRU pay 80 per cent of the wages of the top 38 players in Wales, namely the leading international stars, with the regions covering the remaining 20 percent dependent on numbers.
A new arrangement for running the elite game in Wales has also been mooted, along with a centralised commercial body and strategy.
In the face of much criticism from outside, the WRU will also lap up the findings that state the union’s commercial performance is in line with its peers and investment into the professional game is in line with other unions. Some long-time union critics will be surprised by those conclusions. Some who are fiercely critical might even need smelling salts to bring them around.
However, it is also noted that Welsh rugby’s governance procedures and responsibilities need reviewing and realigning. The report adds: “Welsh rugby must immediately develop a sustainable commercial funding model for the next 10 years."
No arguments there. Of the new financing model linked to player funding, a source near the top of Welsh rugby told us: “Decisions haven’t been taken on any of this.
“All the Oakwell report is saying is that there isn’t quite enough money in the game at the moment to sustain four professional clubs in this manner. Really, what that means is we need more investment. The challenge, of course, is to find that investment. No-one is saying it’s easy, but the regions are commercial businesses.”
What's been the reaction?
The Welsh Rugby Players Association, the players' union, are concerned about how their members might be affected if a region were to be lost. That's totally understandable, of course. It is thought existing contract obligations would be fulfilled by the other three regions.
However, a senior Welsh rugby figure told Wales Online: “Losing a region isn’t the answer as it would impact on the Wales team because player numbers would be reduced.
“And how are regional supporters supposed to feel today? All the professional teams are trying to sell season tickets, yet they are now doing so with supporters worried their team might not be in existence the season after next.
“Supporters deserve better and so does Welsh rugby. The regions also have to attract more investment — we know that. But there needs to be some thought given to the financing of the overall game as well.”
So what’s likely to happen?
As touched on above, these recommendations could simply be dismissed by the PRB when they meet next week. Some at the regions were fairly relaxed when we spoke to them today.
But there is an acceptance that something needs change for Welsh rugby to be competitive at professional level once again. Whether that will result in a region being axed, only time will tell. However, clearly it will be discussed in some detail next week.
Such a move would narrow the player base further in Wales and probably see an exodus of players to England. It would also be a kick in the teeth of supporters of the dropped team who were encouraged to get behind regional rugby and foster new allegiances when it started in 2003.
There would also need to be discussions about whether fewer Welsh teams would affect local broadcasting money.
Something does need to be done, however. That much is clear. And the options will be discussed.
The axe appears to be being sharpened, but whether it is actually brought down upon a region is less certain.
