The Welsh Rugby Union will take over one of its four regions, Newport Gwent Dragons, in July to prevent it from folding after failing to secure outside investment. With Cardiff Blues struggling and the Scarlets reporting a loss of more than £1.5m this month, the private ownership model of the quartet – Ospreys are the other region – is set to change in the coming years.
The move would involve the governing body buying Rodney Parade – the nine‑acre site on which the Dragons play, along with Newport RFC and Newport County – and laying an all-weather pitch. The proposal has been agreed by the Dragons and the WRU board, but will come to nothing if the shareholders of Newport RFC, who meet at the beginning of May, do not endorse it. “We are doing this for rugby reasons,” the union’s chief executive, Martyn Phillips, said. “If it comes off, rugby will be there for many years; if it does not, we are talking weeks.”
The Dragons, losing £800,000 a year, have been seeking private investment for more than a year but the complicated arrangement at Rodney Parade, where the ground is owned by Newport RFC who have an arrangement with the Dragons and Newport County, who face being evicted because the football league outlaws plastic pitches, proved offputting.
“The only solution for us was to buy the ground,” said Phillips, who said the WRU would drop Newport Gwent from the region’s name to give it broader appeal in the area. The average crowd this season is around 4,000. “The only way we can make this work is by buying Rodney Parade because the investment needed would not be practical if we took out a lease.
“We want to engage the whole of Gwent behind the professional entity while safeguarding Newport RFC playing at Rodney Parade. We signed a heads-of-terms agreement with the Dragons and Newport RFC this week: it is not legally binding but it is a formal arrangement. It is subject to Newport’s shareholders approving it, but we also have a significant amount of due diligence to get the final numbers and legal positions. We have to make sure we do not put the WRU into any jeopardy with this deal.”
The businessmen Martyn Hazell and Tony Brown are owed nearly £5m between them, but may have to write it off as a new company is being set up that will be free of debt. Phillips would not say how much the takeover would cost the WRU, only that it was “several millions”. The value of Rodney Parade is estimated to be £5m and the 1,000 shareholders who have a vote on the deal – 75% would need to be in favour for it to go through – want assurances that part or all of the site would not be sold off to developers.
The WRU chairman, Gareth Davies, a former chief executive of the Dragons, said: “I have read and heard a lot of nonsense that this is an asset-stripping property deal. Our vision is based on four regional entities to compete, successfully I hope, in competitions and to supply players for the national team. Retaining the four sides is important to allow opportunities for young players coming through. We need the support of the people of Gwent: if it is not there in five years, we know where it will end.”
Stuart Davies, the Dragons’ chief executive, said the region and Newport RFC, who have played at Rodney Parade since 1878, would collapse if the deal failed. “If it did not go through, any number of scenarios would be triggered which would lead to the collapse of the group and rugby in any guise discontinuing at Rodney Parade because it would probably result in an enforced sale of the ground. The Dragons would disappear and the rugby club would very probably suffer the same fate.”
Newport RFC supporters have expressed concern that while the deal would leave the club debt-free it would also leave them asset-free, with the union buying Rodney Parade, and vulnerable to being thrown out. “There is more comfort in the sale of the land to the union than to private investors because of the assurances they have given,” Stuart Davies said.
“I cannot think of anyone safer than the WRU which protects the Dragons and the rugby club. They do not have a property play up their sleeve: they did not have to get involved and are doing so out of a sense of duty to the game in Gwent and in Wales.”
Phillips said the name of the region would be one of the first issues addressed if the takeover went ahead. “It is a big, emotive topic. Our view is that it would be better to bring some clarity and call the team the Dragons. We have talked to a few stakeholders and we need to get over the name issue quickly because there are more fundamental things to resolve. We are regional rugby, not super clubs and we have to get that off the agenda.
“If the shareholders do not agree to this, there is not much else we could do. I do not see this happening to our other three regions but we need to find a Welsh model which will be a mixture of central and private investment, a state of interdependence.”
