Welsh rugby facing fresh financial threat from English clubs
WELSH rugby could be facing a new threat from the English game with Gallagher Premiership clubs set to rake in a eye-popping £18m in an investment deal with a private equity firm.
When news broke back in September, it was likened to the deal that formed football’s mega-rich Premier League back in 1992 and has the potential to make seismic changes to the club game in Europe.
There was some resistance to the deal with CVC Capital Partners from the Premiership clubs, and owners initially voted against selling a majority stake to the company.
But Premiership Rugby chairman Ian Ritchie now says a prospective nine-figure deal which will change the face of the domestic game “remains on track”.
Ritchie had been expected to announce the completion of the £230million deal – widely reported to be with CVC Capital Partners – following Tuesday’s fourth meeting of recent months.
But instead, the top-flight clubs will have to wait a little longer for the financial boost which will earn them around £18m each in exchange for CVC becoming the PRL’s partners.
Ritchie said: “We had a good PRL board meeting and there remains a unanimity about our approach and our desire to enter into (this deal).
“We remain on track with our objectives. These discussions are inevitably complex but we have had a good meeting today and we remain with that shared objective.”
PRL chief executive Mark McCafferty indicated that the deal was so close it might not even require another formal meeting before the biggest investment in the history of the game can be announced.
Officials hope it will transform the domestic competition, leading to a much greater strength in depth and more opportunities for the smaller clubs to challenge for silverware.
Under the PRL’s existing rules, the current salary cap level remains at £7m irrespective of the prospective investment levels, meaning a bigger initial benefit to those clubs that currently spend less.
McCafferty said: “I wouldn’t say there were sticking points, it’s more that these are not straightforward negotiations because they have got a number of different angles to them. With the collective will around the table today, we can find the results to those remaining few items.
“It will be a landmark moment if we can get there, which will usher in a new era for the game going into next year, and that will allow the clubs to make the next big investment in the game.”
Clubs are expected to use the windfall to focus on revamping their current facilities, including training pitches and even hotels to boost their income streams.
It could well spell bad news for the Welsh and French game with England better equipped to offer star names bumper deals to ply their trade in the Premiership.
With some English rugby clubs currently spending less than the current £7m salary cap, they would be in a stronger position to bolster their squad.
Last season in Wales, the Scarlets, Cardiff Blues and the Ospreys shared £20.6m, according to the WRU’s 2018 annual report, which worked out at about £6.86m each if shared equally, from the union.
The Dragons received £6m from a separate pot.
An improved funding arrangement was actually put into place for this season with an additional £2.4m being shared by the Scarlets, Blues and Ospreys. and they tend to play a little bit more for each other.
“They will be a very determined outfit this week. Good luck to them and the next coach that comes in.”
Strange is among a list of contenders who have been linked with the vacant position with the Dragons set to appoint a caretaker coach until the end of the season.
Andy Robinson, the former England, Scotland, Bath, Edinburgh and Bristol coach, would fit that bill as he lives just over the border, is available and has vast experience.
Former Northampton boss Jim Mallinder, who pulled out of a move to the Blues earlier this year, has also been linked with it but has taken up an important coaching role at the Rugby Football Union.
Many Dragons supporters would like to see the return of the region’s most successful coach, former Wales boss Mike Ruddock, while another Gwent man who has backing is Scarlets defence organiser Byron Hayward.
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