The Welsh Rugby Union has put investment before profit as it looks to build up the game at grassroots level and bolster its four regions, who have all struggled in Europe and the Pro12 in recent seasons.
The WRU enjoyed a 13% increase in turnover last year to a record £73.3m, allowing it to increase investment in the game to £33.1m, an 11% rise. Debt, which stood at £60m+ little more than a decade ago, has been reduced to £11m and no longer has conditions attached.
“We are pleased with the results, all the more given that it was a World Cup year,” said Steve Phillips, the WRU’s chief finance director. “We have invested the increase in turnover in our game which is what we are here to do and we have put record amounts into the regional, Premiership and community levels. In the past, our debt created certain difficulties, not least having to retain profits of around £2m due to banking agreements.
“When we refinanced last year, it allowed us to invest more and not have to retain a profit. The question I am asked most is about our debt, but we are no longer a basket case, and have not been for a while, and our relationship with the bank is much better. We have revolving credits and the facility available to us in June 2019 will be £15m.
“Debt is a business tool and there is no contractual obligation or pressure to reduce it and whether we do will be a management decision. The debt was more than £60m at one time with a burdensome interest repayment. We were so regulated by the bank then that they effectively owned us. We could not do anything without their consent. It is a proper business relationship now we are no longer in the intensive care department.”
Wales have, for the first time, offered ticket concessions for their autumn internationals against Australia and South Africa at the Principality Stadium, with under-16s getting in for half price. “The young are important to us as we fight to win their hearts and minds,” Phillips said. “We are attracting more into the sport by offering versions of the game other than contact and we want to ignite interest at the lower levels to garner support at the top.”
Nothing illustrates the change in Welsh rugby since Gareth Davies became chairman of the WRU last year – and then Martyn Phillips took over as chief executive – than the relationship with the regions who as recently as 2014 were considering a breakaway in frustration at the way they were being treated by the governing body.
“The regions are essential to our success,” Steve Phillips said. “For Wales to do well, they have to and the way we look at it now is to look at how to assist as best as we are able. The dialogue and co-operation are better now and we are working together. You want the community game to feed the Premiership and the Premiership to feed the region and that is what we are trying to bring about.”
The sporting headlines in Wales this year have been made by the national football team, who on November 12 take on Serbia at Cardiff City Stadium a couple of hours after Wales kick-off against Argentina at the Principality Stadium.
“There is no indication that people are diverting and our ticket sales for the day of the clash are healthy,” said Phillips. “I think we can co-exist. They used to play at the Principality Stadium and we would have them back. We have had conversations in the past: they have been comfortable at Cardiff City Stadium, but they are a different proposition now.”
Sam Warburton will lead Wales in the autumn series despite having an operation on a fractured cheekbone this week. He is expected to return within a month.
