Welsh rugby faces an uncertain future with the WRU still set on three teams
The Principality Stadium(Image: Bob Bradford – CameraSport via Getty Images)
As the domestic season edges toward its conclusion and Wales quietly ready themselves for the inaugural Nations Cup, uncertainty continues to hang over the future of Welsh rugby.
Last month, the Welsh Rugby Union confirmed that the professional game would remain a four-region model for at least the next two seasons. Yet behind that decision sits an unwavering long-term ambition to reduce the landscape to three professional sides. The governing body is convinced that a streamlined structure, combined with greater investment in player development pathways, offers the best route to producing elite talent.
However, the collapse of the proposed Y11 takeover of Cardiff has only complicated that vision and raised fresh doubts over how the WRU intends to deliver such radical reform.
A WRU board meeting took place last week, with the governing body understood to have committed to outlining a definitive roadmap toward a three-team model by the end of June.
The WRU also confirmed last month that both the Ospreys and Scarlets are expected to join Cardiff and Dragons on PRA25 agreements, a move that would bring enhanced central funding and increased playing budgets.
Arguably the biggest positive for the clubs regarding PRA 25 is the debt-for-equity swap.
That means reducing their debt in exchange for preferential shares in the club. Preferential shares aren’t ordinary shares which the club owners hold, and only individuals with ordinary shares control the club.
If the club is sold then individuals with preferential shares gets the money back when the club is sold.
“So, that takes three million of that debt that we swap for equity,” said WRU CEO Abi Tierney.
“That reduces the debt for Ospreys and Scarlets which is really important. We also refinanced (with Goldman Sachs and Natwest) which was really important for us be able to do PRA 25.
“We’re looking to try and bring some stability in the system by reducing their financial outlays.” Win free tickets to watch Fiji v Wales in Cardiff this summer
Next year on PRA25 (YE27), clubs receive £6.4m funding and repay £0.1m as part of debt management which is lower because of debt for equity swap and also because terms are for a longer period under PRA25.
This means a £6.3m cash payment. Competition money is extra and comes via the WRU as they are the shareholders in URC and EPCR; whichever deal the club is on, this is circa £1.7m per club.
As a result the overall budgets for the Welsh teams, including backroom staff, would be around £8m (£6.3m + £1.7m) per club in PRA25 versus £5m (£3.3m + £1.7m) per club on PRA23, although investor contributions need to be added to this.
Yet a month on, neither of the west Wales regions has signed the agreement, with senior sources indicating negotiations have reached an impasse.
There are also unconfirmed reports that the WRU is attempting to renegotiate the terms by lowering proposed playing budgets, further complicating discussions.
Compounding matters, WRU chair Richard Collier-Keywood is due to step down on July 15, leaving the governing body searching for fresh leadership at a pivotal moment for the professional game.
Within current boardroom circles, Andrew Williams — the former chief executive of Halma Plc — is widely regarded as a leading contender to succeed Collier-Keywood.
Behind the scenes, the WRU must also determine whether to press ahead with plans to tender the three proposed professional licences — central, east and west.
Should the union choose that route, it will need to establish clear criteria for prospective bidders while preparing for the likelihood of legal challenges and significant supporter backlash or will they lose their nerve and stick with four sides?
There have also been suggestions in some quarters that moves are afoot to further separate the governance of the professional and community game.
In an exclusive interview with WalesOnline last month Wales’ most successful female entrepreneur, Hayley Parsons, said it is vitally important the professional and community game be split to make it “financially viable for all stakeholders.”
This could potentially be done by moving the community clubs into a charitable vehicle which could be far more lucrative for the community game.
In theory the WRU would make a substantial contribution before the vehicle goes out to raise charitable donations.
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But it would take the clubs a lot of persuading to agree to that.
Simmering in the background is the wider question of the future structure of professional competitions. The Rugby Football Union is understood to have granted permission for Ealing Trailfinders to join the United Rugby Championship, while London Irish remain another potential option.
This has a knock on effect on the WRU because the URC would need to find a replacement for the axed Welsh team or the governing body could face a substantial fine.
With PRL looking to expand to 12 clubs by 2028 before eventually going up to 14.
PRL has denied future Welsh participation, with the Rugby Football Union keen to grow the game in England by potentially forming new sides in Birmingham, Cornwall or even Yorkshire.
But WalesOnline understands there is a significant appetite from Gallagher Prem clubs to include one, if not two, Welsh clubs in the future, provided Cardiff is one of them.
Following the collapse of the proposed Y11 takeover of Cardiff Rugby the WRU confirmed it would retain ownership of the region for the foreseeable future, and WalesOnline understands they have begun the search for a new CEO of the club.
For now, the immediate crisis may have eased, but uncertainty continues to surround the direction of Welsh rugby and what its professional landscape will ultimately look like in the years ahead.
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