The past few months have been some of the most turbulent in the history of Welsh rugby with the game in complete and utter disarray.
But over the past fortnight there has been significant change with the governance of the Welsh Rugby Union getting completely overhauled at an extraordinary general meeting, while a six-year financial framework was also agreed between the governing body and its four professional sides.
However, there has been outcry from supporters due to the impending pay cuts and the lowering of the regional playing budgets.
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WalesOnline sat down with one of the most powerful men in Welsh rugby and a figure who played an integral part putting together the new six-year deal.
Malcolm Wall, chair of the Professional Rugby Board in Wales, lifts the lid in this exclusive Q&A on why Welsh rugby has to go through some short-term pain and the long-term plans to ensure a thriving national game.
Q: Why do wages and budgets have to be corrected?
A: “I think you need to look at it in a wider context not just in terms of Wales.
“Wales has some very particular challenges but lets have a look at what’s happening in rugby across the piece. You’ve seen two clubs go bust in England. On average over the last few years, and obviously it’s been distorted by Covid, private investors have put £4srcm a year into the English game.
“I say investors but let’s be realistic about these people because a lot of them are hugely generous benefactors.
“Some are expecting to get some form of return but they are doing so not in the classic form of investment with very specific expectations of financial return.
“We’ve got a different structure in France but from my information the level of investment from benefactor investors is close to £3srcm a year.
“The situations in other countries are obvious for all to see. Scotland has moved to a model which only supports two professional clubs, and they’ve accepted a very different model.
“Ireland is a very successful model but one that sees rugby union as the primary sport in the country. They don’t have professional football clubs like we do in Wales nor do they have the proximity to the football Premiership.
“In terms of GDP and any other economic measures they are a wealthier country than Wales. They also have more corporates who will support their rugby whereas we don’t in Wales.
“We don’t have very large banks in Wales, we don’t have brewers of the size of Guinness so they’ve got everything going for them for a good economic model.
“To their credit they’ve also worked their pathways really well and they’ve bought discipline to the way they’ve approached it so they start from a good position.”
Q: Why are we in this situation? Where have we gone wrong?
A: “I look at Wales and we have had significant challenges.
“First of all the original PRA which was established in 2src17 and came into effect from 2src18 looks at an annual agreement between the WRU and the professional clubs for funding. That doesn’t give you any chance of forward planning.
“It also assumed there would be no need for benefactor or investor involvement and the wonderful work the likes of Peter Thomas had done over the years was recognised but they said it wouldn’t have to go forward.
“In the short termism you had at view that there was no need for external revenues, you had much worse commercial revenues than is enjoyed in other Northern Hemisphere countries like Ireland, England, and France.
“We also had rising player inflation so even before Covid I would argue that the PRA was not likely to be sustainable. We then had Covid which hit lots of organisations for six.
“We had a situation where a delicate infrastructure was very badly impacted and emergency money had to be put into the individual clubs. The Welsh Government helped by putting in long-term loans.
“It should be recognised those long term loans immediately needed a £5srcsrc,srcsrcsrc a year servicing by the clubs as a mixture of interest and repayment. So, whilst they saved the clubs in the short term it also caused a long-term issue.”
Q: So, why are players having to take pay cuts?
A: “When I arrived last year I did a thorough investigation of what the situation was. My conclusion was technically the clubs were either close to or technically bust.
“There was a funding gap in the current financial year against what the WRU had pledged to put in. There was a lack of cost control in terms of the amount of money the clubs were playing the players but also the other areas.
“I just want to deal with that amount of money the clubs are paying the players. I’d never blame a player or any employee for accepting an offer or negotiating their best offer, and then taking that money.
“They are not then at fault if the employer runs into financial difficulty. For each player, who has a short career, it’s entirely right for them to accept and to push for maximum remuneration during their terms as a player.
“We’ve had some significant legacy issues and I think we’ve miscalculated our ability to perform commercially. We were overpaying and our cost of running was too high.”
Q: Many people have suggested we can only afford three professional sides. What do you say to that?
A: “We then had considerable debate about the actual structure of rugby which has raged in the media. Should we have two pro teams, should we have three or should we have four clubs?
“The PRB debated this long and hard and concluded that if at all possible four cl
…. to be continued
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