The Maths Of Pro Rugby – Wales is Skint

Warning – the following will contain numbers, some limited assumptions and some rounding up. It won’t appease the romantics, the disenfranchised or the lovers of compass point teams (you know the people – those who never use numbers to support their opinion.

Last year the WRU earned (turned over) £85.3m. It also collected another £11.7m on behalf of the four pro teams via their broadcast and competition money. As is explicit in the WRU Annual Report, that money belongs directly to the four participants but the belief is that the money passes through the WRU’s accounts in order to placate its agreement with Barclays.

Here’s some context on that £85m – Exeter turned over £20.5m, Bath £18.6m and Gloucester £16.3m. So, in reality, the WRU is the size of about four or five Gallacher Premiership Clubs. Some more context is that the £85m was a record year and £4.8m of that money was earned by hosting Ed Sheeran, Anthony Joshua and co.

Of that £85m, the following went into the Professional Game:

NDC = £2.6m, WRU Payment = £9.1m, Team Wales appearance money = £3.8m, RGC = £0.5m

So the total from the WRU was £16m. Remember, the competiton money was £11.7m. So the total ‘pot of money’ that the Professional Rugby Game Board has to spend is about £28m.

Let’s go back to Exeter (as they are often lauded as a model club to follow and they are successful at both league and European level – to a degree). Of their £20.5m turnover, they spent £12m on staff wages. So now we know the cost of wages to run such an organisation (Gloucester spent £10.6m, Bath spent £11.2m on wages).

So what does £12m on wages buy a rugby business? The simple breakdown would look something like this:

£8m player wages, £2m coaching wages (at all levels down through academy), £2m staff costs (from programme sellers to the Chief Exec, bar staff to cleaners to Grounds Staff to the guy who washes the kit).

Many often trot out the daft line of “regional rugby was supposed to deliver us a European Cup winner”, without any nod to how the cost of professional rugby has accelerated since 2003. But what we do know now is that it costs a wage base of £12m to have a company that can challenge for the top honours.

Which takes us back to the £28m the WRU and its supply chain (the Pro Teams) have in their war chest and now we can see how pathetically small that sum is and how it simply cannot facilitate four teams that could challenge in the Champions Cup each year.

It’s only – and I mean ONLY – because of the generosity of the benefactors that we’ve had any level of success at three of the four pro teams (the Dragons once won a 7zzz competition, in all fairness). It’s not because of the WRU, who have spent the last 23 years trying to push private finance out of the game.

We are now at the point where that private finance has all but lost interest – and who can blame them? There’s no return for them in the meaningless and dreadfully unpopular PrO’14. Our friends across the bridge – with whom our rugby culture has far more in common than any PrO’14 country – are booming whilst we (as the figures prove) will have to shrink.

The only conclusion here is for the WRU to finally get its way. To get its two team solution and for us to follow the Scottish model (not the Irish model, as Wales cannot afford that) by having two centrally controlled teams. Remember that £28m and the £11.7m made up of competition money? Well, if you half that competition money by halfing the number of teams participating, you still have £22m left in the pot. Even the WRU should be able to do something similar to Glasgow and Edinburgh (spend more on one team than the other) with that kind of money. With a little bit of sponsorship for each team and potentially some gate money, there could be enough to get each challenging for qualification to the Champions Cup.

Of course, there are a few more things to consider before the ‘disenfranchised’ get excited at the prospect of “East” and “West”. Firstly – where would they play? The obvious solution is for the WRU to try to take over the lease the Ospreys have for the Liberty but I somehow doubt that Swansea City would be willing to offer similar terms. That leaves PyS, but the WRU would be putting the Scarlets out of business in order to get their own way, so would the lease holders be willing to offer a competitve sub-lease deal to the WRU?

And in the East – would CAC members allow a team NOT called Cardiff to play at CAP? We know that playing league games at the PS is a non-starter because of the huge costs involved in opening it for events. When the Os plays Stade there, they lost money on that game. Which points us to Dave Parade, a ground where the WRU aren’t (at the moment) the main tenant of its own facility and a ground that has a tiny capacity and changing facilities that barely scrape league regulations.

And the final consideration is that the WRU’s income earning ability is saturated. It’s maxed out. It can’t play more international rugby to generate the income to pay the bills. Therefore, it cannot keep up with the rising costs of professional rugby. This is its limit. If you exclude private finance now, a) you won’t get it back (see the problem in Scotland for proof of that) and b) you will never be in a position to grow the game.

In summary – it’s a shambles. The WRU has driven the professional game in Wales off a cliff by continually backing the wrong horse and by seeking solace amongst other blazers in Scotland and Ireland.

The WRU this week noted in it’s statement regarding the PRB (they seem to have, ironically, dropped the word “Game”) that “Nothing is off the table and we will be both bold and innovative in our thinking as we ask the fundamental questions about what is best for the future of our national game”. Well, the answer is obvious: get on the blower NOW to PRL or move to a two team solution that will collapse within 5 years.