The WRU’s plans have not gone down well with regional benefactors, with relations in Welsh rugby strained to breaking point
The Welsh Rugby Union’s relationship with its four professional teams is at breaking point after Dragons representatives walked out of a meeting with the governing body.
All four clubs – Cardiff, Dragons, Ospreys and Scarlets – have held individual meetings with WRU powerbrokers over the past fortnight. WalesOnline understands Dragons representatives walked out of a meeting with the WRU which was supposed to last three hours after a mere 10 minutes.
At the meeting the WRU’s director of rugby and elite performance Dave Reddin outlined his demands for total control of all rugby matters at the professional clubs moving forward.
The WRU are planning to centrally contract every player in Wales and employ all of the performance staff, leaving the investors in control of just the commercial side of the business. Sign up to Inside Welsh rugby on Substack to get exclusive news stories and insight from behind the scenes in Welsh rugby.
Reddin’s wish to seize control away from the regional investors could see some of the wealthiest and most successful entrepreneurs and business people in Wales lost to Welsh rugby forever.
Many within the game believe the WRU has gone too far with its demand for central control and a middle ground needs to be found, with one source claiming the current approach has left Welsh rugby at breaking point.
The WRU are planning to reduce the number of professional teams from four to three, with one based in Cardiff, one in the east and one in the west.
As part of a new 10-year deal the WRU are asking the current funding directors to pour millions in, but the governing body wants complete control of the rugby side of the organisation.
WalesOnline understands the funding directors will be required to put in at least £1m a year as part of a fixed licence fee.
The funding directors will also be expected to pay back the Covid loan which now totals in the region of £7m per club, with two sides deciding against taking out the full loan at the time.
This means the benefactors will need to stump up between £1m-£1.5m a season per club depending on the cost of the loan taken out.
Before this latest saga the WRU had decided to take the Covid loan onto its own balance sheet and pay it back on behalf of the four professional clubs, but WalesOnline understands this has changed.
From year six of the licence fee, the debt will have been paid off but there will then be a variable licence fee which is calculated as 50% of net surplus. Get the latest breaking Welsh rugby news stories sent straight to your inbox with our FREE daily newsletter. Sign up here.
In other words 50% of profits the three clubs make from the commercial side of their business will have to go to the WRU.
If consensus is not found on a way down to three teams by the end of the year then the WRU will go out to tender on the licences for the three remaining teams early in the new year.
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