The reality of the financial situation in Welsh rugby is that the four professional teams cannot earn enough income to be able to match the salaries on offer outside of Wales. The English have a £4.5m salary cap with the allowance of a marquee player whilst the French cap is 52% of a club’s turnover, capped (supposedly, although it prevents circumvention as well as did the Maginot Line) at about €8m. In Wales, the four have set it to £3.5m for the 38 ERC registered players and they can just about afford that.
So, to keep the better players in Wales they need more income.
There is a body of thought which suggests that the four have been pretty poor in generating their own income in recent years and there is some truth to that. None of the four are expert marketers and whilst the Ospreys are the leaders in that field (at least for retail punters) they have gone very much for a price led campaign. I think that the reason for this is that the quality of play on the pitch is pretty poor and most of that play is on free to air TV. So why should anybody, let alone a family, brave a winter’s evening in Wales to throw upwards of £40 at something which is available for free for them in their living room?
A major source of this poor play on the field is the lack of income in the game which, as is now obvious, causes a downward spiral. Poor product = poor income = poorer players = poorer product.
For me, much of the issue of this poor play on the field is the very nature of the League the four play in – the Pro12. It is pretty much designed as a training ground for international players rather than a direct, competitive league. Only two of the dozen teams will not play HEC rugby (if such a thing exists in the future) so there is little pressure on the rest of the teams. The play offs have added some end of season fun but it’s not really anything to get too excited about. There certainly isn’t a pot of gold for the winners which will help our income problem in Wales.
I think, therefore, that the four are in a vicious circle. The league they play in is poor and not commercially attractive, so it generates little interest from the paying supporter (even though crowds are at very decent levels in three of the four) in terms of ticket income and, so therefore, the four don’t have the money needed to invest in their squads in order to attract more income.
This is where I blame the WRU. It designed the Pro12 for its purposes in that it isn’t a testing and gruelling league for Team Wales players, allowing them to be “fresher” than their English and French counterparts at least.
If the WRU wants the four to continue to play in the Pro12 then it must acknowledge that the very nature of that competition prevents the four from being commercially attractive, which means that they cannot earn enough income to keep the better players in Wales. Therefore, the WRU needs to offer better compensation to the four for losing those players for so much of the season. I feel that the WRU could easily afford an additional £2m a year across the four teams and this would be enough, were it dished out on a more fairer basis.
If the WRU refuses to do that then it should allow the four to be commerically free of their market restrictions. The four must be allowed to negotiate their own TV deal(s), they must be allowed to negotiate which competitions they play in and what spoils from those competitions are due DIRECTLY to them. All income from these contracts must no longer pass through the WRU’s books (which they do right now and serve only to improve the turnover figures for the WRU).
To both prevent commercial freedom and to refuse to pay a market rate (set by the RFU) for player access stinks of having your cake and eating it. The four are being squeezed by Lewis and it is time that they went on the front foot about it. We’ve already seen Lewis prevent the Ospreys from playing a money spinning game against Tonga, for example, so it is pretty clear where his priorities lie.
It is time for the WRU to pay their fair way or to cut free their market restrictions. If Lewis wants to control the entirity of professional rugby then letting loose the four might see one of them go bust, allowing him to step in. Or it could just be the making of the game in Wales and put our better teams on an equal footing with Northampton.