WRU statement on cutting a region is ‘can kicking’ says leader of Swansea Council

Rob Stewart claims the Ospreys are protected until at least 2030 and could potentially then enter an Anglo-Welsh league

The leader of Swansea Council, Rob Stewart, said rugby region the Ospreys are now protected until at least 2030 and described the WRU’s statement that it remains committed to reducing the number of regions from four to three as a “can-kicking” exercise.

The union insists that its board remains fully behind the case for reducing the number of regions, despite the ending of negotiations to sell Cardiff Rugby – which it acquired out of administration last year – to the owners of the Ospreys, Y11 Sport and Media.

A deal had been seen as a way of effectively shelving the Ospreys and reducing the number to three, with Y11 divesting from Swansea and investing in Cardiff Rugby.

READ MORE: Y11’s deal to buy Cardiff officially off as west Wales clubs offered agreementREAD MORE: The WRU on its financial outlook after £6m deficit to plan on Six Nations and autumn internationals

However, Mr Stewart, who has led a vociferous campaign – including a legal challenge from the council – against the WRU striking a deal that would have led to the demise of the Ospreys, believes it will now be difficult for the union to maintain its position of three regions without the backing of all four after. The Scarlets and Ospreys are now expected to sign new four year funding deals with the WRU.

This is despite the WRU having early termination clauses in PRA 25, which it has already entered into with the Dragons and Cardiff, the latter which it operates through a subsidiary company. Contrary to Mr Stewart’s position, the union said it will look terminate PRA 25 deals with the region at end of the 2027-28 season.

The WRU said it will provide more details on how it intends to reduce the number of regions to three in June. It is highly likely it will announce details of a competitive tendering process for three licences; one based in Cardiff, and the others for east and west Wales.

There is always potential for three regions to be achieved through a voluntary merger, the most likely being between the Scarlets and the Ospreys, or through another club failure due to the commercial challenges of running four professional clubs in relatively close proximity and often competing for the same commercial and sponsorship sources.

Mr Stewart said: “We believe the action we took as a council, and the legal action, has clearly focused the WRU’s mind and means they no longer wish to proceed with a deal for Cardiff with Y11. It also means that Y11 is now fully committed to the Ospreys as the team they will own and support going forward for the next four years.

“They are having to commit their own resources to sign the PRA, so in that respect there are controls and commitments placed upon Y11 to get this deal over the line.

“This is a major win for the campaign to save the Ospreys that I’m proud to have been a part of. This is the outcome we have been working towards, and it’s amazing to see it happen. This now secures the Ospreys’ future into the 2030s and allows four professional regions to continue to play in Wales, which is what the fans, players and public wanted.”

He said he was not critical of Y11’s position – before the termination of its Cardiff acquisition negotiations with the WRU, – of not being able to commit to the Ospreys beyond 2027. The WRU had secured approval from the United Rugby Championship for Y11 to own two Welsh sides.

Mr Stewart added: “That goes for any investor or owner across the region. I don’t think we can hold Y11 to a higher standard than anyone else. There are always opportunities for backers to decide they don’t want to run a club any longer and to put it up for sale, but that could happen at any club.”

On the WRU’s statement that it remains committed to reducing the regions to three, Mr Stewart said: “It looks like can-kicking, and it is going to be difficult, with all the PRAs signed, for the WRU to extract itself, given that investors have to put something in to access the enhanced funding via the PRA. It is going to be incredibly difficult and messy for the WRU to do it.”

On the prospects of a merger between the Ospreys and Scarlets, he said: “In the same way as Cardiff City and Swansea City would never merge, the Jacks and the Turks won’t either… we are very tribal.”

He said the council’s legal challenge against the union, despite the termination of a Y11 deal for Cardiff, would not be stood down.

In February, the council submitted a legal case to regulator the Competition and Markets Authority, claiming that the proposed sale of Cardiff to Y11 breached the Competition Act.

While the CMA has confirmed it received a legal letter from the council in February, it has not taken the investigation forward. It does not comment on its deliberations, but usually, within six weeks, if a case is to be pursued, it would be listed on its website. This is currently not the case. Swansea Council has also lodged a High Court action.

The WRU is understood to have secured a significant win in a legal arbitration judgment following a challenge from the Scarlets, which argued that its acquisition of Cardiff, and the required financial support, amounted to overreach and was unfair to the other three regions.

That ruling could have given the WRU confidence that it could retain ownership of Cardiff for the long-term and pursue a more lucrative future sale of the club, particularly if an Anglo-Welsh or British and Irish league is created.

Mr Stewart said: “The Scarlets’ legal action was much narrower than ours, and we are not standing down our legal action, let’s be clear about that. Our action is much broader and tackles a number of different points. So, until we have full assurances from the WRU on what we are requiring, the legal action will continue.”

Y11, which is majority-owned by Navis Capital, will now look to work with the council on the redevelopment of St Helen’s as a new sporting and community venue. Subject to sign-off on a new funding deal with the WRU, the Ospreys are understood to be looking to invest £3m, although a small element could be in the form of a commercial loan from the council.

The council will also invest £3m turning the ground into a new home for the Ospreys. The redeveloped ground will also be used by other sporting teams.

Mr Stewart said: “The Ospreys playing at a redeveloped St Helen’s from the start of next season will be fantastic for the city, our local economy and the supporters.

“I’d like to thank the team at Swansea Council, the supporters, fans, players and the public who have backed the campaign -this win is for all of you.

“We could have been in this position a year ago had the WRU not presided over chaos and confusion. The clubs and the union have suffered financially, and fans and the game have faced unnecessary uncertainty. The union’s approach has always been about money rather than the underlying reality, which is the culture of rugby in Wales. If you don’t understand the culture, you are never going to get the right result.”

The Ospreys is a loss-maker in Y11’s media and sporting ownership portfolio. However, Mr Stewart believes that Y11 are attracted to the potential of a route for the club into an Anglo-Welsh league from 2030.