Last summer, financial consultant Robin Allen was brought into the Welsh Rugby Union on £1,000 a day to help stabilise the shocking financial crisis within Welsh rugby.
But the seeds to this crisis were sown many years before. And as those of us who sat in that temporary stand in Bedford knew very well, that game provided the turning point in the club vs Union battle.
The 1998-9 season was a watershed for rugby in Wales. Simply speaking, Cardiff and Swansea had given up on the Welsh Rugby Union ever developing a coherent structure for the sport, and felt compelled to do something about it. The Union has completely failed to grasp the opportunities offered by professionalism – paralysed by substandard officials in key positions and a wholly amateur approach to the professional era. The WRU’s competitions were then loss-makers (and are still loss makers, incidentally). Club finances in Wales were in a complete mess – Neath were bailed out to the tune of £600,000 by the WRU, Bridgend were teetering on the edge, Llanelli had to sell their ground and Pontypridd recorded huge losses.
All clubs other than Swansea and Cardiff were forced to sign a loyalty agreement with the Union because they were so dependent on the WRU for central funding that if that funding was withdrawn, they’d go straight into receivership. “What we’ve got just isn’t going to balance a business,” said the then Chief Executive at CRFC, Gareth Davies. “We haven’t got a product. All that’s happening is the clubs are living hand-to-mouth from the WRU money with no structure being put in place for them to survive without it.” Anything changed recently?
The two clubs were so frustrated with the inaction of the Union that they decided to try and create their own revenue stream in which to service. Change was essential, and Peter Thomas and just about everyone else involved knew the answer was a British League.
The WRU relied heavily on the rebels for one of the best results ever against SA – 12 of the 17 players used that day were playing their club rugby against English clubs, and Pies Snr had only just returned from Richmond.
But the Union opted for the status quo over change and WRU were opposed to the League. It’s always been about who controls the club game, and it still is. The WRU feared the English clubs would succeed in their battle for independent commercial rights. The Union knew that they would be surrendering influence and power if a pan-Union competition was created, and the increasing strength of club rugby would threaten their free lunches. Proposal were drawn up to create two divisions of 10 clubs – the top division made up of six clubs from England, two from Wales and one each from Scotland and Ireland. The same format would happen in the second division. The WRU wanted 30-40 Welsh clubs involved – plainly ridiculous – and yet another example of the cloud cuckoo land in which the WRU live.
Next season Cardiff will field two teams – one in the Celtic League and one in a new 16-team Premiership league. This won’t be the first time Cardiff have planned to field two sides in different competition. Back in the rebel season of 1998, the club planned to put one team out against the English, whilst fielding another in the Heineken Cup and Village League. On that occasion, the WRU refused. In fact, they threw Cardiff out of the domestic league. Funny how things have gone full circle, eh?
A fudged compromise was reached after the rebel season with promises from the Union of new competitions and the signature of Swansea and Cardiff finally appeared on the Union’s 10 year sacrifice to maintaining the status quo. First a Welsh-Scottish League was put in place. With a lack of patience and a lack of sponsorship, that collapsed amongst criticism of the Scots performances in Wales (anyone think about the Welsh performances north of the border?).
Then came the Celtic League and still a total lack of sponsorship. Simultaneously the same old tired Village League was trundling on – unsponsored and increasingly populated by substandard foreign imports plugging the gaps the locals failed to fill.
So the Union was delivering new competitions, but the only money on the table was the miserable sum on offer from the Principality for the Village Cup. Was this sustainable? Clearly not, so the disruption was set to continue …..
Three years of inactivity
Despite protestations from a so-called Gang of Six (Bridgend, Cardiff, Llanelli, Newport, Pontypridd and Swansea) that the structure of competitions managed by the WRU in Wales had to change, the governing body rejected moves to join the professional era. Pandering to the amateur clubs to which they owed their power base, Glanmor Griffiths and chums buried collective heads firmly in the sand and insisted that the status quo had to continue until 2007. Finally, after a threat of strike from the players, “the WRU general committee, working on advice from the Union’s Director of rugby Terry Cobner and his department, agreed to reduce the Premier Division to six professional clubs as soon as legally practicable,” said WRU chairman Glanmor Griffiths in a statement dated 16th March 2002. The players had threatened strike action, coming up with quite reasonable requests for future of the game. Completely alienated by both clubs and Union, players felt without a voice, and were forced into making a stand.
Dennis Gethin said you cannot reduce the number of clubs in Wales in 18 months and that was on 17th March 2002. Well Dennis, looks like you can!
Finally, after three years of activity the Director of the Welsh Rugby Union came up with a revised structure for the game. Better marketing? More sponsorship? Better TV deals? Nah! Given the Union’s anti-club history and a particularly antogonistic stance towards the benefactors that were keeping the game in Wales going, it was no surprise to see that the Union’s idea was to kill professional club rugby for good. December 2001 saw Cobner propose that the eight leading teams in Wales join forces for a four-team, regional system in the Heineken Cup and a new-look Celtic League.
“Thanks for all the money you’ve pumped into the game, but we’ll take over now”, was what Cobner was saying. Swansea would be forced to amalgamate with Llanelli, Neath with Bridgend, Cardiff with Pontypridd, and Newport with Ebbw Vale. The regional sides would play at Swansea, Neath, Cardiff and Newport. Quite where the Union was going to find the money from to run these amalgamated teams was not clear, but then again, finance has never been at the core of any Union plans. It’s all about control.
It took the players to call for limits on the number of games played per season – 30 by international players (including 10 international games). Assuming that European Games will account for a further 8 games, that leaves 12 games only in the Celtic Super 12 – half the fixtures. A new two-tier system for professional and semi-professional rugby in Wales was also part of the plans – seems like they were the only one’s talking sense all along!
* A full-time professional division made up of six clubs funded to the tune of £1.5m;
* A second tier of 10 semi-professional clubs funded to the tune of £100,000 a year;
* The six professional clubs to chosen by a management board made up of representatives from the great and the good of Welsh rugby;
* The criteria for the six clubs to be based on financial, international players, academy and facilities tests (i.e. grounds and training facilities);
* The second tier of the current nine Premier Division clubs and this season’s First Division champions;
* Teams will comprise of development players, U21s and squad members of the professional team;
* The Super Six to play in European Cup and Shield, Celtic League, Principality Cup and new Super Six tournament;
* The second tier to play in a Welsh domestic competition;
* Welsh international players to be limited to 30 games per, including 10 international matches per calendar year;
* The Super Six clubs to reduce their non-Welsh qualified players to two per match-day 22, by the 20042005 season;
* A salary cap for the full-time professional and semi-pro teams;
* A more realistic structure of international match player payments, in line with those of other European rugby playing nations;
* A strong drive to increase revenue through sponsorship;
* A full examination of available funding and a review the WRU’s current revenue streams.
||Gang of Six Plans
||Tasker Watkins Report
||Peace in our time
||Four regional teams
||Club based – top six clubs
||Club based – no money for the lower levels
||Four regions awarded as franchises – one in the north and three in the south
||Two sooper clubs and three amalgamated clubs – no bidding and no franchises
||Ditch Ebbw Vale, Caerphilly and Neath
||Neath and Swansea amalgamate, Ebbw Vale swallowed up by Newport and Caerphilly ditched
|When did this idea surface?
||January 19th, 2003
||January 20th, 2003
|Who holds the players’ contracts?
||Top players contracted to WRU
||WRU-appointed Premier Division Management Board* (Glanmor Griffiths, Mal Beynon, Selwyn Walters, Alan Phillips, Terry Cobner, David Moffett, Steve Hansen)
|Who runs the game?
||Professional partnership – Union and Rugby Wales Partnership Ltd
||Eight man executive Board. WRU run by chief executive.
||Uh – no change
As we write this editorial, there are many details that are still to be found or even worked through, but the bones of the solution are much closer to the original so-called Gang of six plans than Cobner’s Central Control catastrophe. This solution is the culmination of just four months work by the new Chief Executive of the WRU, David Moffett. He arrived in Wales with the reputation of being an axe man, a cost cutter and bean counter with little respect for the traditions of the game.
His initial actions did nothing to allay the fears of rugby fans, cutting the ‘A’ team from the game in Wales meant the gap between the club game and intentional rugby was widened. This move saved just £200,000 per annum – exactly his salary. Further cuts were made at the real grass roots of the game. Many local Development Officers lost their jobs and those that were part funded by the professional clubs had their funding removed too. The motivation for this and other changes to the day-to-day organisation of the WRU was the crippling debts of £66m, plus an overdraft of over £9m. The bank was unhappy and Moffett was the man to cut the drain of finances from the Welsh game. Wonder what the man in charge of finances at the Union was doing? Glanmor ….?
|Some of Moffett’s cuts
John Prince, Wales under-21s administrator, as well as the administration manager and commercial chief.
Chris Padfield, development officer for Gwent for the past 11 years, has been made redundant and so has the District A (Gwent) secretary who has been there two years longer.
Moffett’s initial negotiation position over the future of the game in Wales was to cut out the main source of extra money in the game – THE CLUBS and their BENEFACTORS! What was the sense in this? Moffett resurrected Terry Cobner’s Four Province Plan, with three teams in the south (based in Newport, Cardiff and Swansea) and one in the north (based in Wrexham).
In one move, Moffett’s alienated the entire professional game. The clubs were up in arms over this plan as they’d been the ones propping the game up to the tune of some £15m over the 8 years of professionalism – money the Union had failed to generate. Of course Henry and the Union had been more than grateful that Welsh players were back in Wales – “bringing players home” – and really got something for nothing. Of course, these players brought their wages with them and soon the wage level in Wales had reach some parity with that in the richer game in England.
In February 2003, Moffett presented his plans to an EGM of all member clubs of the WRU . It was claimed that the clubs had their chance to suggest an alternative to Moffett’s “Four Provinces” but they had not taken it. Was this plan really what Moffett had in mind, or was he using it as some sort of stalking horse?
But an agreement was made by all parties for five teams very early on in the negotiations and we all thought that was that.
Was there really a lack of unanimity amongst the clubs? During the whole negotiation process between the clubs and the WRU, the Union’s involvement in one of Wales’ major clubs managed to further muddy the waters. Neath RFC was viewed as a Trojan horse by the other professional clubs and was soon isolated from any involvement in plans for the future. This did the supporters, players and staff at Neath a great disservice – but what could they do? Glanmor was refusing to sell the club, so they were in a right mess.
A press conference was called to announce Llanelli, Neath / Swansea, Bridgend / Pontypridd, Cardiff and Newport / Ebbw Vale as the teams and Leighton Samuel (Bridgend) and Gareth Thomas (Pontypridd) had supposedly shaken hands on the deal.
But someone could still throw a spanner in the works. The pantomime horse with Glanmor in the front and Cuddy in the back turned the whole affair into a poor imitation of Goldilocks and the three Provinces. Mike Cuddy, Chief Executive of Gower Park, said that the Union could not negotiate on the behalf of Neath through Gower Park . . . . . . . . . so the deal was off. Cuddy said he ” ‘ad no happetite for it”. Clearly the porridge was too hot.
Act two of the farce was set in yet another general meeting of the WRU. With the professional game in turmoil, the Union’s logic was that the amateurs should decide, and so Severn Sisters and Mumbles RFC had their 15 minutes of fame. So what was the vote all about? 4 Centrally Controlled Provinces – 3 in the South and 1 in the North: 4 Centrally Controlled Provinces – 4 in the South 4 Wholly Club Owned Franchises: 4 Franchises with “Multi-Club” ownership – 50% senior, 30% 2nd senior, 20% junior clubs all designed on Cobner’s WRU districts ……. it was anybody’s guess! Was it the right way forward? Oh yes it was! Oh no it wasn’t! Oh yet it was!
The Document was designed with “Newcos” in mind – clubs would amalgamate to compete in cross border competition. Moffett said the finances were there only for four teams, Cobner said the players were there only for four teams. So confident were they that their actions were legal and fair that the document voted on by the Member clubs had the number of teams as X. So confident were they that their actions were properly costed, the funding was £x over x years.
With the rest of us shouting, “The bank manager’s behind you!”, the villagers just didn’t get it. They were being promised matches against the big boys in the Pentref Premiership should they reach Division 1. Think of all those bar takings! Everybody was down at the same level. Everybody had suffered “pain”. There were no winners but the losers could always say they were not alone. So that was it then, yes?
Four teams, organised by the Clubs but with the Union having control over player movements, player salaries, coaching appointments, Board decisions, sponsorship and Academy planning. This was what Cobner had wanted – near total control of the professional game whilst dressing it up as club control.
But it was not to be.
The Ugly Sisters
Those who had propped the Union up during the Henry years when their money was first needed now wanted their voice. Those who had negotiated with Moffett would not accept the deal and they had aces up their sleeve. If Moffett expected his Pied Piper act would guarantee the unthinking masses would blindly follow behind him, he was sadly mistaken.
Llanelli – and to a lesser extent, Cardiff – quickly rejected any ideas from the Union that their clubs should be sacrificed on the pyre of Union control. With a deep sense of irony, the very agreement that Cardiff had refused to sign prior to the rebel season was now the clubs’ chief weapon against the Union. Their second weapon was an agreement with the English and French clubs that without the Welsh clubs agreement, they would veto any change to the Welsh entrants into the Heineken Cup. Serge Blanco publicly stated that the French clubs would block ANY move to enter Welsh teams into the Heineken Cup without the total approval of ALL the Welsh clubs.
Moffett wrote to all the clubs threatening to tear up the loyalty agreement, but Llanelli said “See you in court!” Now with the Union’s funds in such a state that the only lawyer they could afford was Lionel Hutz, Moffett knew he had no case and had to compromise. So now we had Moffett promising four, but the courts possibly saying 9 with all clubs being funded at the minimum guarantee of £450,000 per season instead of the combined team earning £1.5m.
This focussed minds.
So finally the clubs realised that if they didn’t meet the demands of Cardiff and Llanelli (with the silent backing of Pontypridd( for a five team solution they would only receive £450,000 next season. That, of course, would have seen the financial death of many clubs and they would clearly have fallen into administration as Swansea RFC had done. Ebbw Vale and Neath would be the first to fold with such small funding. Suddenly Mr Cuddy found his happetite – a £1m happetite.
Mr Russell of Ebbw Vale went quiet on his quote that “a small town from Carmarthenshire was holding Welsh rugby to ransom” (strangely he failed to mention Cardiff in the same terms) but the most telling quote came from Mike Price of Neath RFC. He finally admitted that the “Newco” agreement was the only way Neath RFC could have a voice at the top end of Welsh rugby in the future. Initial objections from Neath on merger with Swansea.
This agreement was nothing about representation of all teams in a region, nothing about the betterment of the Welsh national team – this was only about keeping your snout in the trough.
Despite Mr Moffett’s tremendous efforts to bring about the change that was so obviously needed he has come to understand that the clubs hold the aces.
A Grimm Fairytale
Just before the agreement was announced, the Welsh International players threatened to pull out of the summer tour to New Zealand and Australia. Just after the announcement, the ERC announced that the WRU was not to have influence over the selection and coaching of the entrants. The clubs have the players, the clubs have the support of the broadcasters who wanted 5 teams, the clubs have the money and the clubs have the lawyers and the other European Clubs backing them. The Union had 230 amateurs and this was a no contest. The only bastion for Union control that remains is who controls the players? The 50:50 contract share that was in the Moffett document and the daft draft that was in the Moffett document may still be in place. On past records, who do we trust to negotiate the better contracts? The clubs or the Union?
Moffett has appointed three colleagues to help him drag the WRU into the 21st century. Former Ebbw Vale, London Welsh and Barbarians scrum-half Steve Lewis takes over as WRU General Manager replacing former secretary Dennis Gethin. All these title differences make it very difficult for outsiders to get a grip on who is responsible for what.
An accountant by qualification, what’s more important about Lewis’ past is that he has extensive experience in international business – though again decifering exactly at what level is very difficult when little information is published by a Welsh press intent on keeping the details away from the public.
Steve Lewis described the investment of so much money in the Millenium Stadium without ensuring full utilisation of that asset as a “serious error of management”.
And the new marketing and commercial manager is Gwyn Thomas, who joins the game’s governing body from a “senior position” with Tesco in Wales. Again the press is vague, but Thomas seems to have been an ex-store manager. The cinique would say, “what does a shopkeeper know about running a sports organisation like the WRU”, but without doubt a sense of commercial acumin has been missing from the Union.
The final appointmentt of Moffet is new Millennium Stadium manager Paul Sargeant, a former director of Wembley Stadium. The WRU has debts of £66m, including an £8m overdraft and when the Union is forced to shelve out money to lay a new pitch several times a season – this asset is becoming more like a mill stone than a profitable investment. The Union has been slow to sell the benefits of the stadium as a “National Asset” earning money for the whole of the South Wales area, and surely this must be one of Sargeant’s first tasks.
So far, all we’ve seen from Moffett is cost cutting and very little of fund raising. He has abolished the U16 and U17 Welsh teams (saving around £50,000 a year). The A team cut is said to save £200,000 a season. The nine development officers appointed by the WRU to develop the game have to reapply for only five positions. 25 heads were cut from the Union and the national team also faced a £100,000 cut. Perhaps most worrying for fans of the game is the cut in referees mileage allowances – from 40p to 30p a mile. Touch judges fees halved from 55 quid to 27.5 per game. What we need is high quality officials and the last thing we should be doing is discouraging probably the most important man on the pitch.
Having said all that though, the WRU seems to have found 10million from somewhere.
Stuart Gallacher quite reasonably demanded that the WRU should open its books to the public, and with all this cost cutting going on and Moffett penniless in the face of the demands of the professional arm of the sport, we supporters have a right to see the extent of the commercial mismanagment of the Union in recent years.
So who does run the game in Wales?
The game in Wales is largely run by local authority councillors and well meaning amateurs. Ex-players pepper the sport. Now all this is fine for the amateur arm of the sport, but professional rugby is being held back by a lack of skilled individuals in the right places.
The WRU set up a Premier Division Management Board with the same old faces controlling the professional arm of the game. Glanmor Griffiths, Mal Beynon, Selwyn Walters, Alan Phillips, Terry Cobner, David Moffett, Steve Hansen and the magnificent seven who will manage the game.
The two representatives from the WRU board are Maldwyn Beynon – a non-executive director of the Millenium Stadium and member of the WRU. Now non-executive directors are individuals who are usually paid a hell of a lot of money to ofer advice to directors. They have no voting rights. Some individuals collect these non-executive posts and make a fortune with very little responsibility. Mr Beynon is a 69 year old who played for Brynmawr RFC – now a member of that club – ironically the club at the cente of the WRU draw cock up this season. Quite what he brings to the party, no one seems to know and he’s hardly around to answer to the press or anyone else about what he does. He is also a District A representative in the Union and largely shuns press attention.
The other representative is Selwyn Walters – a 56 year old who is the WRU’s Six Nations representative. He’s also club secretary at Lampeter, and another in the long line of local councillors who populate the WRU ranks. Last year in the Mirror, he was famously quoted as saying “I always go along with the official press releases from the Union. It’s always been a policy of mine never to go into details about anything really.” Does this sound like the views of a man who will provide the necessary leadership and drive we need to take the game into the professional era in Wales?
Where did the funding come from to run club rugby in Wales?
The Rugby Football Union gives £2.3m to each of its 12 Zurich Premiership teams. Money is distributed equally to all clubs. The Scottish and Irish Rugby Unions also fund their professional province and district teams on an equitable basis, with Ulster getting around £2.2m from the Union.
In Wales, each of the nine premier clubs receive just under £270,000 from TV deals brokered by the Union with S4C and BBC Wales.
Clubs also receive a £30,000 each time one of their games is shown live on TV. Under-21 rugby is funded in Wales to to the tune of less than £50,000 per club. Heineken Cup get just under £300,000 each for participating in the tournament. Parker Pen teams get only £180,000.
Other funds are distributed by the Union based on the number of players each club supplies to the Welsh squad 0 the more players, the more money clubs recieve.
The WRU also takes out £90,000 of the clubs money for central marketing. That’s a hell of a marketing budget from the Union – wonder how they use that? Wouldn’t that money be better spent by the clubs?
What does the future hold?
Moffett’s report on four provinces laid out quite detailed plans of what structure the Union wanted. Now however, a combination of poor PR from the Union and poor press reporting means fans have little idea of exactly what has been decided – if anything. Moffett’s original plans were widely reported in the press, but since then, we’ve heard or read little factual information and the only conclusion one can draw is that it’s pretty much a free for all.
Not that the clubs have been any better since their final proposals were adopted by the Union. Should we expect any more from the clubs? Do they have a body to act in their best interests? Uh, no. That should be the Union. On the long road to the demise of the professional game in Wales, each club is fighting for its best interests (you could argue that that’s no bad thing), and the Union is unable to offer any leadership or focus.
Finally, a Celtic Super 12 has been delivered, but we’re still no wiser on where the funding for this will come from. The Union, meanwhile has announces a new £10million academy – massive indoor arena, weight training facilities, four rugby pitches, an Astroturf surface and a 400 metre running track. So the money seems to be there – or is it?
Central contracts? What do the players think? Well, Jon Humphreys said he would retire from the game if the WRU forced him to move from Cardiff, but things seem to have moved on since then. Gareth Williams was told he had to move from Pontybonty to Cardiff, and Alfie was told he could not sign for Cardiff – even though that’s what he wanted to do. This season’s coach is telling players where they should play their rugby, even if it’s unlikely he’ll be around when the very same players contracts are up for renewal.
Unfortunately, our view of how the game will develop next season is that very little – if anything – has changed.
Regions, Provinces, Amalgamated clubs – what’s the difference?
Well, the short answer to that question is, don’t ask the Union. Alan Phillips publically dismissed the idea of provincial rugby, but he’s hardly alone in that opinion. Sadly, few in the game have a clear business idea of what the difference is between regions, provinces, franchises, amalgamations and super clubs – and don’t expect the press to dwell on the details of what has been done to our game. Spin and headlines are far more valued at Thomson House and the English press just print the same regurgetated copy. As for the BBC, well, they’re even worse.
Despite Moffett’s announcements that there would be no mergers – that’s exactly what we’ve got.
What we have is teams forced to amalgamate to save money – they could not rely on the same Union hand outs to keep them afloat and as a result they’ve had to cut costs. Newport – in the guise of the submission of Tony Brown – mysteriously surrendered 50% control to a village at the top of the Valley who will bring nothing to Wales’ third largest City. The bois from Jurassic Park have no players, no finances and no where near sufficient supporters to fund a professional team, but have somehow managed to wrestle control of Newport away from Mr Brown. Newport’s benefactor has clearly done so much for the game in Newport and in Wales in general – attracting international names to the game and boosting the exposure of the sport. However, he’s clearly sold Newport short on this one and rugby in Gwent will suffer as a result. Our prediction is that Newport (if they play at Rodney Parade they’ll be Newport in all but name), will struggle next season. Divisions behind the scenes will lead to an unsettled squad and the team will fail in Europe and in the Celtic League. Fair-weather supporters will no longer turn up, and the club will quickly revert to pre-Brown days.
Pontybonty should have the strongest squad on paper, but will the Ponty faithful flock to the Brewery Field? We think not, and expect higher attendances for the Pentref Premiership games than the amalgamated club games. Once more divisions between Yoda and the Bridgend bois will cause problems, and as Leighton Samuels found out, investing £4m took four years to bear fruit in Wales. In Europe and the Celtic League, the situation will be worse.
For the Blackjacks, its a case of chalk and cheese. Mr Cuddy’s happetite will mean more games at the cricket pitch at Neath, and insufficient crowds to pay for the club. If Morfa gets built quickly enough, then the attraction of a new stadium could put bums on seats and may ensure the Blackjacks future. Without Morfa, there’s simply not enough money around and the new club will pretty soon be going cap in hand to the Union.
As for the Scarlets, well they have the strongest XV on paper and could do well in Europe next season. They have an ageing team, but if they can stay free from injury, they’ve a coach who could provide the town with a winning team. Will they come and watch? Well, they haven’t done so in sufficient number in recent seasons, so will they do so in the future? If the Scarlets need 8,000 a week, what evidence is there that they can attract these sort of numbers in the future?
Finally, Cardiff are set for another tough season next year. The squad has been strengthened, but with so many new faces and an inexperienced coach, they too are set to struggle in Europe and away in the league. Of the five clubs involved next season, Cardiff have the largest number of millionaires on the board, so the club will survive whatever happens. Competition outside Wales will be a severe test on Young and his youngsters, so don’t expect any dramatic change on this season.
So in conclusion, with three out of the five clubs in financial difficulties at the end of the 2003-4 season, what will the Union do? Sell the stadium to raise money to keep the clubs alive? Take the difficult decision of forcing bankruptcy on a “no more bail outs” policy? That’s when the real tough decisions will need to be made. Will Moffett be around to make them?