Monthly Archives: April 2013

What is there to support?

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There are many different reasons as to why an individual chooses to “support” a sports team, ranging from location / parental influence / a favourite player / they like the kit. In the Welsh media at the moment there seems to be a desire to show that the popularity of soccer, plus having two top flight soccer teams, will somehow negatively affect the support of our professional rugby game. But will it? Is soccer the biggest danger to support at professional level or could it be something else? For me, it is rugby’s ability to eat itself that is a greater danger. Soccer has always been popular in South Wales and it is pretty clear now that it is the most popular team sport in Wales for support and player numbers. And I think that it has been for some time, well before Swansea entered the Premiership. With the wall to wall media coverage of the sport and the well known wages on offer, it has always been the choice of sport for most youngsters in Wales. Having Cardiff City in the Premiership won’t affect that. Rugby will always have its place in Welsh society, especially outside of the cities of Cardiff and Swansea, but that is no reason for it to be lazy. It faces increases challenges from all leisure activities, not just soccer, in its race for customers so it has to offer something at the professional (not international) level to get people through the door. This leads us to the question of why anybody should support (by that I mean pay for tickets) any of the four professional rugby teams in Wales. Our friends in the media would have us believe that support should follow “regional lines”. In other words, if you live in Bridgend or follow Bridgend RFC then you “should” be an Ospreys supporter too. If you live in Pontypool then it is the Dragons for you and so on. For me, this is an utterly nonsense argument that ignores freedom of choice, ignores the fact that South Wales is tiny geographically and is further confused by the ease of movement along the M4 corridor. So, Mr Western Mail, what if our “supporter” in question is a 30 year old single lady who was born and raised in Pembrokeshire, went to University in Swansea, works in Cardiff and lives in Cwmbran. Which is her team? Ultimately, the answer is the same answer as it is for everybody else in Wales: her team is who she chooses her team to be. Where she lives, where she works, where she was born are all irrelevant as South Wales is too small to exclude any of the four teams from her support. This is not the same in Ireland. Dublin to Belfast takes close to 2 hours, Dublin to Galway 3 hours, Munster is significantly bigger than the whole of Wales. These are major reason as to why looking at Ireland for a supporter led “regional model” is not a sensible thing to do. In this example, our 30 year old lady could finish work on a Friday evening in Cardiff and make any of the four home grounds by the BBC imposed kick off time of 7.05pm. She couldn’t do that in Ireland without a helicopter. This is why the obsession with branding and the removal of “club names” is a total red herring argument in Welsh rugby. Each of the four should be free to brand themselves as they choose so that they can best maximise their income, rather than pander to some media led nonsense about support lines. If the Newport Gwent Dragons earn more sponsorship (and retail income, if that is what they think) by using that brand then media should respect that and use the proper name. Ditto the other three. The obvious example here is Cardiff. In terms of rugby heritage, that brand is so strong (if not for the other brand alignment of it being Wales’ capital city) that to dilute it would be (and has been) commercial suicide. At this point it is worth remembering that a good commercial sponsor is worth hundreds of thousands of pounds a year. A retail punter is worth about £100. Professional rugby is a bottom line driven venture that must be about maximising income. It is not a community based social inclusion project that is designed to “be available for all” and “exclude nobody”. We don’t have the geographical brands in Wales (because it is so bloody small) to be able to maximise income and maximise inclusion. So how else can our four attract paying spectators through the gate? Well, I’d say that they were doing a pretty good job of it already when you consider their trading conditions. They are not at all in control of the product: they cannot control who they play against, they cannot control their fixture lists, they cannot control their broadcast contracts, they cannot control when their better home grown stars are available to play for them! Yet, three of them still average close to 8,000 crowds. But do they get any praise for this from the Welsh press? No. Which is incredible in itself, but becomes understandable when you realise that the press will not rock the boat which causes the market conditions our four have to trade in. So can more be done to attract support? Obviously, it can. The best way to do this is to be successful as supporters want to follow winners. It’s not about glory hunting, as such, but about wanting the support emotions to ultimately be happy. If we are to invest our time, money and emotions into our sports team then we must expect value in all three and this is how the Ospreys stole a march on the other three some years ago. Good players, “names” that the kids want to see play and be associated with, will attract supporters from wherever. It’s easy to get to the Liberty off the M4, which means that it is easy to get to from wherever in South Wales. The problem from now on is not soccer taking away the existing support base but that support base not getting value from the investment of time, money and emotion. With belts being tightened and the “names” players leaving, what is the incentive to stay on supporting these teams? Why peg it to the grounds for these TV driven kick off times to see sub-standard players delivering poor quality rugby. It’s cheaper and easier to watch it at home. This is how rugby could eat itself. With the talent drain from the professional sides negatively affecting the quality of play, with the knock on effect of our teams losing more often, then it is more and more likely that support will simply drain away to its sofa to watch the game. It won’t leave the game for soccer, but it will leave the game for the sofa. And this won’t just be a problem for the four professional teams. As the WRU loses control over its top players when they move outside of Wales, the fitness levels of these players will be lower when entering the international season and results will suffer, as we know how much emphasis on fitness is key to Gatland’s (and Howley’s) way. In other words, for the sake of the professional game as a whole and in order to keep the present level of support, this top level impasse over finances needs to be broken. The best Welsh players must play in Wales, top overseas players must be attracted and the fixture list amended, or it won’t be soccer killing rugby in Wales but it will be Roger Lewis doing it.

Sink or Swim

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Lewis has gone on record with his opinion (and, at this moment, it is only his unless I’ve missed Pickering’s public approval of that stance) that the WRU should run the entire professional game in Wales.

This is quite a claim as there is no infrastructure in place at the WRU to run four additional teams and there doesn’t seem to be a model already in place in any other country for such a North Korean style of set up. In Union “controlled” nations like Scotland, Ireland and New Zealand, each of their teams has its own management structure in a “devolved” manner, but that doesn’t seem to be what Lewis wants.

At the moment, all four of our professional teams have “helpful” ground usage deals. Llanelli paid c.£8m up front for a 99 year lease, the Ospreys make a mint out of their shareholding in the company which runs the Liberty and the other two play at the grounds of their club owners for, basically, a peppercorn rent. But if the WRU owned and ran each of the four teams then I’m pretty sure those ground rents would rise and if you want to see what happens to a rugby club who just rent a ground for matchdays then don’t forget the shambles of the Cardiff City Stadium.

On top of those ground rental deals, the WRU would have to meet all of the staff costs for players and coaches. And then, on top of that, there would need to be something of a centralised administration process if not four separate Managing Directors of each of the four teams.

How does Lewis think that the WRU could afford that on the present figure of c.£15m that is “paid” out of Union “funds” to the four teams? Of course, the WRU would also receive the income through match tickets and sponsorship, but if the four cannot make money out of the present set up then how does Lewis think that the WRU will manage to?

These, of course, are questions that our National Media should be asking of Lewis but, as the link above shows, it was an English broadsheet which carried the story. Lewis has stated that there is no additional money on the table to meet the obvious needs of the professional game, so he must think that he can run the entire game from a central office in Cardiff on a sum of approximately £20m. And at this point, it’s worth remembering that the salary cap in England is approximately £5m for playing staff alone. In France, the cap is over €8m.

All I can see from Lewis is an agenda of disruption to our professional game as he strives to drive away the necessary private finance that should be there to fund growth. Instead of trying to produce a marketplace which allows the four to grow their income through fair use of their best assets, he strangles their income earning potential by overuse of their assets without fair recompense.

The ONLY way Wales will continue to challenge in cross border competitions is if our four teams increase their income to the point where they can retain those top players who want to stay in Wales and to the point where they can again attract talent like Percy Montgomery instead of Jamie Smith, Xavier Rush instead of Robin Copeland, Marty Holah instead of George Stowers and Deacon Manu.

Lewis has created, instead, an environment of ever decreasing returns and ever increasing costs. In the Union’s defence, they have compensated the four with £600k each in order to minimise the playing of non-Welsh players, but that is the only fair thing that I can see out of the last Participation Agreement.

Now is the time for Lewis to be smart instead of an egotist. He should cut the four free, allow them to sign their own broadcast deals, allow them to sign up to their own competitions and to control their own income streams. We need to rid ourselves of the summer test and of the fourth AI. He needs to allow the four to stand on their own two (eight?) feet to see if they sink or swim.

And if they sink, he can step in and take over that side…..

Give Us the Information so that we can decide

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First of all, everybody needs to look at the above video of the RRW Press Conference at Cardiff Arms Park. It provides a number of useful pieces of information (not least on the breakdown of the money the WRU pays the four professional teams) and shows the quality of the questioning offered by many sections of the Welsh Media.

I may have missed it, but I’m yet to see a mainline paper running the story of how the professional game is financed in Wales. After all, we’re told by the Media that this present stand-off is all about money so why not break the story of where the money comes from and what it is for?

In particular, that press conference delivered us the following gem:

Lets be clear about the £6m first and foremost. The £6m is not for player release. They use that in their statements, but if you look at our Participation Agreement signed in 2009, there is a split in there about what player release is. Out of the £6m, £2.7m is a core grant. Another £2.4m is to keep the non-Welsh qualified player quota down under an agreed limit. Player release is about less than £1.5m, so don’t be misled by statements that say £6m is being paid for player release.

Those are the words of Stuart Gallacher and explain to us, in a nutshell, the entire financial problem at the top end of the game. It shows that each of the four receive under £400,000 per annum for losing their better players to Wales for approximately half of the season. That’s all players, too, including sevens and under 20s, for weeks upon weeks.

Now, not only are those players unavailable to generate income for their employers whilst they are away, but they also require their salary to be paid (and they are often the highest earners at each pro team) AND they require a professional player to be paid to play in their position whilst they are away. A triple blow. And all for £375,000 per annum.

To provide some context for that figure, please read the following:

That’s right, what the WRU pay for all of that player access won’t even cover the wages of one Jonny Sexton. Or, for some more context, the RFU are paying their players £15,000 PER TEST:

We can all pick a side on how the game should be financed, run and controlled, but nobody can justify the WRU paying so little for player access.

So there are two obvious questions which come from this revelation yet our press has picked up neither (unsurprisingly):

Question 1: if RRW can reveal this information in a press conference they are happy to be recorded and played on the Ospreys website, why the hell can’t RRW produce a website which includes the entire Participation Agreement? That way, we can all make a judgement for ourselves.

Question 2: the WM have confirmed that they are in favour of Central Contracts. The WRU have confirmed that they are in favour of Central Contracts. Many of the Welsh public are in favour of Central Contracts. But where will the money come from? If the WRU are presently paying only £1.5m a year for player access then that will allow them to contract five James Hooks and nobody else! Also, what is a Central Contract? As Hore points out, SANZAR Unions all run different models, as do Ireland. So how can our wonderful press be in favour of something that seemingly cannot be afforded and, as yet, hasn’t been detailed?

Both sides – give us the information so that we can decide.

Having Your Cake & Eating It

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The reality of the financial situation in Welsh rugby is that the four professional teams cannot earn enough income to be able to match the salaries on offer outside of Wales. The English have a £4.5m salary cap with the allowance of a marquee player whilst the French cap is 52% of a club’s turnover, capped (supposedly, although it prevents circumvention as well as did the Maginot Line) at about €8m. In Wales, the four have set it to £3.5m for the 38 ERC registered players and they can just about afford that.

So, to keep the better players in Wales they need more income.

There is a body of thought which suggests that the four have been pretty poor in generating their own income in recent years and there is some truth to that. None of the four are expert marketers and whilst the Ospreys are the leaders in that field (at least for retail punters) they have gone very much for a price led campaign. I think that the reason for this is that the quality of play on the pitch is pretty poor and most of that play is on free to air TV. So why should anybody, let alone a family, brave a winter’s evening in Wales to throw upwards of £40 at something which is available for free for them in their living room?

A major source of this poor play on the field is the lack of income in the game which, as is now obvious, causes a downward spiral. Poor product = poor income = poorer players = poorer product.

For me, much of the issue of this poor play on the field is the very nature of the League the four play in – the Pro12. It is pretty much designed as a training ground for international players rather than a direct, competitive league. Only two of the dozen teams will not play HEC rugby (if such a thing exists in the future) so there is little pressure on the rest of the teams. The play offs have added some end of season fun but it’s not really anything to get too excited about. There certainly isn’t a pot of gold for the winners which will help our income problem in Wales.

I think, therefore, that the four are in a vicious circle. The league they play in is poor and not commercially attractive, so it generates little interest from the paying supporter (even though crowds are at very decent levels in three of the four) in terms of ticket income and, so therefore, the four don’t have the money needed to invest in their squads in order to attract more income.

This is where I blame the WRU. It designed the Pro12 for its purposes in that it isn’t a testing and gruelling league for Team Wales players, allowing them to be “fresher” than their English and French counterparts at least.

If the WRU wants the four to continue to play in the Pro12 then it must acknowledge that the very nature of that competition prevents the four from being commercially attractive, which means that they cannot earn enough income to keep the better players in Wales. Therefore, the WRU needs to offer better compensation to the four for losing those players for so much of the season. I feel that the WRU could easily afford an additional £2m a year across the four teams and this would be enough, were it dished out on a more fairer basis.

If the WRU refuses to do that then it should allow the four to be commerically free of their market restrictions. The four must be allowed to negotiate their own TV deal(s), they must be allowed to negotiate which competitions they play in and what spoils from those competitions are due DIRECTLY to them. All income from these contracts must no longer pass through the WRU’s books (which they do right now and serve only to improve the turnover figures for the WRU).

To both prevent commercial freedom and to refuse to pay a market rate (set by the RFU) for player access stinks of having your cake and eating it. The four are being squeezed by Lewis and it is time that they went on the front foot about it. We’ve already seen Lewis prevent the Ospreys from playing a money spinning game against Tonga, for example, so it is pretty clear where his priorities lie.

It is time for the WRU to pay their fair way or to cut free their market restrictions. If Lewis wants to control the entirity of professional rugby then letting loose the four might see one of them go bust, allowing him to step in. Or it could just be the making of the game in Wales and put our better teams on an equal footing with Northampton.

What are they fighting for?

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A normal Welsh rugby civil war takes 6 to 9 months to play out. We saw this in 1996, we saw it in 1999 (when it took a little longer) and we saw it again in 2002-3. The Union lost the first one (who controled the players when professional rugby started) but won the next two (the crazy decision to block an Anglo-Welsh league and an equally crazy decision to go “Regional”). Are they on for a hat trick?

I’d say so. Roger Lewis has the cards stacked heavily in his favour: the media won’t rock the boat with the WRU so the tone of the reporting of the present issues is weighted, the Participation Agreement ends next year but it can, at the wish of the four pro teams, roll over until 2019 which means that they will be skint until that point before he’ll try to close them again.

In return, the Pro teams (let’s forget calling them “regions” as they may not even carry that brand for much longer) have the players and a link to the English clubs. Back in 2002-3, we saw the Unity that club owners will show when the French and the English backed the Rebel Season and backed the “placing” of Cardiff and Swansea into the HEC once they were allowed to play in Wales again (it’s often thought that they turned their back on Welsh rugby during that year but that’s another Welsh rugby myth. They refused to sign the Loyalty Agreement, wanted to play their fixture list in Wales with “second teams” but were thrown out of the competition by the WRU. Only at S4C’s insistance were they allowed to play in the Cup. So this is just a nice example of how the WRU has always controlled the Welsh press).

Lewis has gone public with his desire to fully control the professional game in Wales. He has blocked the attempts of the pro teams to generate their own income, he has misled the Welsh public on how the finances work in the game (and has had the press on his side to do this, bar one Week In, Week Out BBC Wales TV show) and he has the Golden Goose of the sparkly Cowboy hat wearers willing to pay £70 to shout “Give it to Shane” whilst the bloke in the row in front goes for another beer at the Millennium Stadium.

So, in fairness to Lewis and in his defence, we know what he wants. And it’s pretty clear on how he is going about getting it – starving the pro teams of income so that they are financially struggling and entering a downward spiral akin to what we have seen at Newport Gwent Dragons since 2004. I say good on Mr Lewis, if that’s what he wants and that is what he is employed to deliver. I think that he is killing the game in doing so but he’s only doing his job.

But what about the other lot, what are they fighting for? Does anybody know? What do they want as an end game? We’ve seen snippets in the press from Hore, we’ve had Gallacher commenting on talks about working with PRL. But is that it?

The four have a representative body called Regional Rugby Wales – RRW. This body has no website, has only Gallacher as a spokesperson and is clearly not on the front foot in telling the supporters of the four teams what the hell is going on. This is, for me, more unprofessional than telling PWC to bog off when they asked for a business plan.

Now is the time for RRW to tell us what they want, how they are going to get it and just what benefits that will bring for Welsh rugby. They need a full time spokesperson, full time staff and a bloody good marketing campaign that some will get behind it. At the moment there is a huge anti-WRU stance but it is impossible to be pro-RRW as they won’t tell us that they are fighting for.

It is not beyond the wit of those involved, or their resources, to employ a strategist to lead the organisation. If they choose wisely then a recently retired ex-international with good media skills could win RRW a lot of friends and with friends comes influence. That man, call him Gethin Rhys Williams (for example), needs to be on the television every day informing us of what is going on.

That man needs to be in videos on their website telling us what RRW wants, what they stand for, what benefits it will bring and how they will get it. Even Valleys Rugby managed to do that little.

There is a huge car crash in European rugby just 12 months away as the HEC ends, or at least potentially ends. It could be civil war time but the English and French clubs have already got their message sorted and have already got their supporters on side.

In Wales, we have a carpet salesman up against the National Media. How bloody villagist.

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