Welsh twist in Euro stand-off
Sun, 29 Dec 2013 17:24
The European Cup stand-off has not even taken a break over the festive season, with new reports of 'cash offers' to lure clubs to the breakaway group.
According to a report in the Sunday Telegraph the four Welsh regions have been offered £4-million each to join the Premiership clubs in their attempt to split from ERC controlled competitions.
And the BBC Wales reported that Cardiff Blues, Newport Gwent Dragons, Ospreys and Scarlets will not sign a 'participation agreement' put before them by the Welsh Rugby Union.
The WRU set a deadline of Tuesday, December 31, to sign a new agreement, replacing the current five-year deal that expires in June 2014.
The regions believe the funding in the new deal is inadequate for their needs and are apparently excited by the offer from the English Premiership group.
The offer from the Premiership group would cover the £1.2-million worth of funding they each receive from the Welsh Rugby Union and the £2.9-million domestic rugby brings to the Welsh regions.
The impasse between the WRU and its four teams could see the regions step up their pursuit of playing in an Anglo-Welsh competition next season.
Regional Rugby Wales, the umbrella organisation that represents the four regions, tweeted on Sunday: "The Welsh regions are continuing to work hard to try to find solutions and have a number of scheduled RRW meetings leading up to and beyond the 31st December.
"With regard to the Participation Agreement, the issue remains that neither competition platforms or revenues contained within this legal agreement are confirmed, so the commitment cannot be defined."
The uncertainty surrounding the future of the European Cup, with French Top 14 and English Premiership clubs threatening to withdraw from it in favour of a new cross-border competition, causes further problems.
With no guarantee of what competitions the Welsh regions will be playing in future seasons they are able to make few financial decisions about their future, hence the reluctance to sign a new agreement when other parts of the jigsaw puzzle are not decided.
It has been reported that Premier Rugby Limited, which represents the top-flight English clubs, and its broadcast partner have offered each region £4-million a season to compete in an Anglo-Welsh competition.
While the Welsh regions consider the reported English offer, any cross-border competition would require ratification from the governing unions involved - with the WRU and its English counterpart the Rugby Football Union unlikely to give their blessings at this stage.
That could set the scene in Wales for the four regions to break away from the WRU, a move that would cause turmoil in the professional landscape in Wales and feasibly lead to uncomfortable "club versus country" decisions for some players.
The WRU would not escape unscathed either, as it is legally obliged to enter four teams in the Pro12 and European Cup next season and might have to create four new sides in a hurry to represent Wales.
Television money forms the bulk of the regions' income, with the four Welsh sides sharing a pot of around £9-million between them from competing in the Pro12 and the European Cup.
The WRU adds approximately another £6-million to the shared pot, which includes money for releasing players for international duties, a sum governed by the agreement.
The remaining revenue comes from each region's ticket sales, sponsorship and merchandising, with further cash or loans from owners or benefactors topping up when needed.
A 2012 financial report, jointly commissioned by the WRU and the regions, warned that "the four regional businesses are not sustainable on a standalone basis in their current form without continued additional funding from benefactors or alternative funding sources".
The regions voluntarily introduced a £3.5-million salary cap to help balance the books, but domestic television deals secured in France and England have seen their clubs able to offer players increasingly lucrative contracts.
This has seen a steady stream of leading Welsh players depart for foreign clubs, with the already cash-strapped Welsh regions often unable to respond to the wage inflation.
The situation has led to the WRU consider offering central contracts to its international players.
The impasse in Wales comes amid a festive fixture list that has produced some thrilling Pro12 derbies between the Welsh sides, played in front of capacity or near-capacity crowds.
One potential stumbling block for the Anglo-Welsh league, a tournament which would include 16 teams, is the issue of relegation. However, reports in The Rugby Paper claim a deal has been struck which guarantees top-flight rugby for three of Wales' four regions.
If, for example, the Ospreys are relegated in the first season of the Anglo-Welsh league, they would be demoted to the Championship. But if the Dragons finish at the foot of the table the next season and the Ospreys fail to achieve promotion, the next lowest placed English side would be relegated instead of the Newport region.
Sources: BBC and Sunday Telegraph
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