European and Welsh rugby woes

It’s taken me a while to summon up the energy or even desire to write this latest blog entry, and I apologise in advance for its length, I confess it’s rather turned into an essay! For those who’ve read this blog in the past, they will be aware that the current issues facing Welsh rugby are not new ones. I started blogging about them back in September 2012, and even then they weren’t new problems. They were rumblings, always bubbling below the calm serene surface of the national team’s success.

What has happened however since the start of the 2013/2014 season is that the English and French clubs wanting to reform the Heineken Cup has effectively blown all of the problems in Welsh rugby to the surface. No longer are there quiet rumblings, there’s an out and out torrent now and whether you want to listen to it or not, there are very real concerns that are continuously being failed to be addressed.

When the English clubs (PRL) and the French clubs (LNR) served notice two years ago, you would have expected the European Rugby Cup (ERC) to have had rather large warning bells ringing in their heads that the two biggest draws in terms of television revenue were in serious danger of leaving the competition. Instead the ERC did nothing. Despite repeated attempts at negotiations again ERC did nothing. It was akin to burying their head in the sand, and perhaps working under the belief that the English and French would not carry out their threat of walking away. More fool them.

With not even a hint of a compromise on the cards the English clubs, whether you agree with it or not, ploughed ahead and signed themselves up to a new competition, with a new broadcaster; BT. This last point is an important one, as the TV deal for a European tournament is still a massive sticking point. In response, ERC decided to extend its contract with Sky, thus cementing a conflict that is still yet to be resolved.

The biggest difference in the TV contracts is the money. BT are looking to throw a significantly larger amount of cash at a European tournament than Sky, and this in a way highlights one of PRL’s main points; that clubs be allowed to negotiate their own commercial and TV deals, as they do not feel that the ERC and respective Unions have done a good enough job. Looking at the behaviour and lack of negotiating the best deals from ERC, they have a point.

As the rows have rumbled on, PRL have gone from having FFR as allies until they were blocked by the French Union (FFR) to now having formed ties with the four Welsh regions (RRW). They are still adamant that they will participate in a new tournament where clubs have control over negotiating the commercial side of the game. RRW understandably would enjoy that freedom, as currently they are locked into a deal with the Welsh Rugby Union (WRU) which sees the Union responsible for negotiating all of their competition and TV deals. As with the ERC they have proven themselves to be less than successful in this area.

Despite the PRL withdrawing themselves from the current European set up, the Scottish Rugby Union (SRU), Irish Rugby Union (IRFU), FFR, WRU and the Italian Union (FIR) all pushed on and signed themselves up to a European competition run by, you guessed it, ERC. This is despite the French not being able to confirm even what league their six teams would come from, and RRW announcing they wouldn’t play in it, leaving the WRU with no teams to put forward. Does that sound like a viable tournament to you?

And so we finally move towards the issues between the WRU and RRW. Ultimately this is what it comes down to; WRU want to control every single aspect of the game, ideally they would like to be able to control the regions but they cannot currently afford to take them over, as that would mean paying off the benefactors, who have invested a whopping £40million into the professional game in Wales over the last ten years. So instead, as has been noted by pundits such as Dr Gwyn Jones, they are looking to slowly strangle the regions into submission, so they are able to take them over on the cheap, and thus seal their ultimate control. RRW on the other hand want to make steps that will secure their future. As it stands, the current Pro12 and Heineken Cup is not securing them enough revenue in order for them to remain competitive not just as rugby teams but as businesses. They want the freedom to be able to negotiate their own competition and TV deals as they do not believe that the WRU is securing the best deals out there for them, and when you consider the WRU actually wants to take them over and are slowly forcing them into submission, you can well understand their desire to break free.

But here is where we hit a sticking point for many; are the regions even deserving of a chance to manage their own income and revenue streams when they have made such a mess of it in the past? As many people seem to note, the regions have won “nothing” over the last ten years despite there being quite a lot of evidence to the contrary. Apparently the benefactors are greedy and thus the regions shouldn’t be allowed any more money; this again ignores the fact that it is the benefactors that have kept professional rugby afloat over the last ten years for little to no return. Apparently the regions will be taking money from the WRU pot that will negatively affect the club game; again this is ignoring the realities of the situation. The regions through RRW want the freedom to negotiate and increase their own revenue so that they will be able to be less reliant on the WRU. The competition monies would be entirely separate from the WRU budget and would therefore have no negative affect on the rest of the game in Wales.

Let us look closer again at the regional mismanagement over the last ten years. Have they been managed badly in the past? Andemphatic yes, and what’s more they acknowledge it. Have they made changes from the top down and looked to make themselves sustainable and viable? Yes, they most certainly have and with varying levels of success. Compare that to the WRU over the last ten years. Ten years ago they were being strangled by a crippling debt after appalling management, roll forward ten years and their debt is down to far more manageable levels and their turnover is increasing year on year (even if the figures are inflated by the regional TV and competition monies which they insist on being passed through their accounts first). And yet whilst the WRU is praised for how they have turned things around, the regions are maligned and told that because they made mistakes in the past, they are not deserving of a chance now to improve their own situation. I find that very difficult logic to follow.

And so we come to the battle lines drawn up by WRU and RRW. The WRU insist on having control.  They appear to have refused all RRW efforts of negotiation over the last two years (the laughable fallacy of the PRGB and not even considering re-negotiating the terms of the Participation Agreement being a case in point). They have now signed up the regions to an inferior European tournament that will see the regions receiving less money, and are blocking any chance the regions have of playing in the new European tournament as proposed by PRL. This new tournament might be without the French, but BT are still offering so much money that it would see the regions receive an extra £4million each year for the next three years. The Irish provinces would receive the same benefit and Scottish clubs would be protected from any loss of income.

Surely then, that is the solution? Not so in Wales. The WRU refuses to give its consent as it would see them losing the control over the negotiation of contracts. So where does that leave RRW? If they sign the new Service Agreement (SA) proposed by the WRU in replacement of the old, flawed Participation Agreement (PA) they will be tied in to the Pro12, which year on year has proved an unappetising tournament for the Welsh paying public, and a much reduced Heineken Cup. Given that current levels of funding are insufficient, and that there are doubts over the structure of any European tournament and the Pro12 itself with the Italian teams not happy, it is quite clear that RRW cannot sign the SA and sign themselves up to competitions that aren’t confirmed and that give them no security over revenue.

So what else can they do? They have pledged their support to the Rugby Champions Cup, which would in effect be a British and Irish Cup. As reported in the Telegraph, it is understood that the SRU and RFU have given their backing for that tournament, happy for their clubs to negotiate the commercial aspects whilst they retain overall control. Not so the IRFU and WRU, which leaves RRW in a situation where again they have no tournament to play in.

So that leaves us the nuclear option.

The nuclear option is an Anglo Welsh competition. This would replace the current Pro 12, Aviva Premiership and Heineken Cup. It would see a 16 team league that still retained promotion and relegation. PRL have to have a cross border competition to honour their TV deal with BT. RRW have to sign up to a competition that will see them get an increase in revenue if they are to survive. If the Celtic Unions as a whole do not sanction the new RCC then PRL and RRW will be left with no choice but to opt for the Anglo Welsh option. It is a situation that neither truly want as it would be beneficial for European rugby as a whole if all of the top tier nations could participate in a tournament together, but if there is no compromise from certain Unions it seems that the big red nuclear button is going to be pushed.

Which leads us to how this is going to be resolved; the answer is Court.

RRW themselves do not want to end up there; it’s time consuming, crazily expensive and it also cannot guarantee them a successful outcome. But what else, given all of the issues stated above, can they do? I have yet to even see a realistic answer to that question.

The current set up will see them slowly go bust, so they cannot in any good sense or faith sign up to it. The new competition they want to play in is being blocked by their Union, so what other option do they have other than to go rogue and go to Court?

I will not even attempt here to even start to unpick the turmoil that is currently surrounding the idea of central contracts in Wales. Put simply, RRW are not fully against the idea; but they are against the way in which the WRU is choosing to implement them and with grave doubts over the reasons the WRU have for wanting them in the first place.

And so the row rumbles on. The Six Nations are just around the corner and I have never been so unenthusiastic about it; and this is coming from someone who grew up watching Welsh rugby in the 1990’s! The current impasse is putting off even the diehard fans in Wales, and the problems in Welsh rugby don’t just stop with the WRU and the regions. There are serious issues from the grass roots up. Club numbers in many areas are falling. Referee and volunteer numbers are falling. If the grass roots start to crumble then the top heavy pyramid that the WRU have forged over the last five years will crumble, indeed as the issues with the regions are highlighting it has in a way already begun.

What is needed in my opinion is a change in approach from the WRU. The insistence that the national team comes before everything else is slowly killing the game below international level. There needs to be an overhaul of the WRU, from top down, and a comprehensive overview of the game as a whole is needed. What exactly do the clubs want or need to get the community game thriving again? What would they like to see happen with their ties with the regions? Would they like to see more interaction with the regions, which is something that currently the WRU will not allow?

I firmly believe that there have to be stronger ties between the clubs and the regions. I also believe that the regions need the freedom to negotiate their own competition and TV deals. I am not aware of any business that is able to be successful when they don’t have a say over their two biggest revenue streams and when in fact those revenue streams are being negotiated by a man that wants to shut you down and take you over.

The pinnacle of the game will always be representing your country, but there has to be a focus put back on the place that rugby holds in the communities in Wales if the national team’s current success is going to be a long term one. The regional structure has provided Wales with their most successful decade since the 70’s. It is madness to try and kill that off simply for a strange need for total control. The WRU is charged with the governance of the game, not the control of it, and they would do well to remember that.  

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