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Euro spat to turn nasty in Wales

Wed, 01 Jan 2014 11:13
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New January deadline

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The stand-off and public spat between the Welsh Rugby Union and the four domestic regions is threatening to turn nasty.

In the latest twist in the ongoing saga surround participation in European competitions beyond the 2013/14 season, the four regional teams in Wales, called Regional Rugby Wales, stood their ground and declined to sign a new Participation Agreement.

The organisation, RRW, has instead given the WRU until the end of January 2014 to settle their differences.

The WRU responded strongly by hinting it could set up new teams for "sanctioned" games.

This raised the possibility of players being forced to choose between new WRU teams or existing regions.

At the heart of the chaotic stand-off in Wales is the failure of the WRU to provide a financially viable playing structure.

RRW insisted they remain committed to a breakaway European club competition.

The regions have been in dispute with the WRU over a host of issues, but failed to reach an agreement by Tuesday's deadline.

They said it was impossible to plan for next season without the financial and fixture guarantees they need.

The Welsh regions have previously joined the French and English clubs in their plans for a breakaway European club competition, which has subsequently been thrown into disarray by the French clubs' u-turn and decision to stay with the European Cup.

The latest development appears to leave the Welsh regions and English clubs on their own, however, the format and structure for next season's European competition is still unclear.

"RRW and the Regions re-affirm their commitment to the Rugby Champions Cup under the aegis of Six Nations, which will generate a guaranteed £12-million (US$19.88-million) additional funding across the four regions over the next three years and help reduce the funding gap compared to the French, English, Irish and Scottish clubs," the RRW said in a statement.

The Welsh regions have been struggling financially for many years and have seen many of their high profile players join English and French clubs.

Despite the national team's success in the Six Nations in recent seasons and Wales' huge influence in the British and Irish Lions' series victory over Australia this year, the clubs have struggled desperately to make any impact in the European Cup.

"It is astonishing that they (WRU) have put the four businesses in this position as a result of failing to fulfil their obligations under the agreement, despite having almost two years to resolve the issues involved," RRW added.

"As it stands, the Regions do not believe the participation agreement reflects the changes and demands of the modern game."

The WRU argued the regions knew what they had signed up for.

"The participation agreement provided a 10 year rugby framework for the professional game in Wales and is an integral part of the rugby pyramid structure in Wales," the WRU said.

"The decision of the existing regional organisations not to continue with the PA has now freed the WRU to present a new participation agreement focused on recognising and rewarding regions which identify, develop and retain players capable of challenging for international honours with Wales. This is in the best interests of Welsh rugby."

The regions had always looked unlikely to meet that cut-off given the uncertainty over the make-up of the competitions they may compete in next season.

RRW did offer an alternative deadline of January 31 to solve these issues, but the WRU made no allusions to that date in an incendiary response in which it stated its contractual relationship with the regions will end in June.

The WRU is committed to fielding teams in the Pro12 and European Cup, whatever incarnation they take place in next term, and it said Welsh teams will continue to play in those tournaments next season hinting at the possibility of new regions being set up under union control.

If the union did form new professional teams, it could opt to centrally contract players whose regional deals are set to expire in the summer - such as Sam Warburton, Adam Jones and Scott Williams - and place them with the franchise of their choice.

The two statement in full!

STATEMENT FROM REGIONAL RUGBY WALES
 
RRW, on behalf of the four Welsh Regions, confirms that the Regional businesses remain unable to commit to extend the existing Participation Agreement with the WRU by the deadline of 31st December 2013.
 
Whilst the Welsh Regions, their players and coaches, investors, sponsors, supporters and communities take great pride in their contribution to Welsh Rugby at all levels of the game and remain totally committed to working with the WRU to secure a sustainable and competitive future for professional Rugby in Wales, at this point the WRU remains unable to confirm;
 
The existence and structure of any European/Cup Competition for the period 14/15 to 18/19
The income and distribution from any such competition over the period
The number of teams participating in the Pro12 league for the period 14/15 to 18/19
The income and distribution from the Pro12 league over the period, or even the confirmation of a main sponsor

Consequently, the basic definition of ?participation? within the legal agreement cannot be confirmed. So the WRU are demanding that the Regions legally commit to their operating costs - without committing in turn to the competition incomes that are their obligation under the agreement.
 
The WRU do not and could not run their business in such circumstances and neither can the Regions. The WRU hold full responsibility under the Participation Agreement for the Competition platform and TV rights of the Regions and it is astonishing that they have put the four businesses in this position as a result of failing to fulfil their obligations under the agreement, despite having almost two years to resolve the issues involved.  As it stands, the Regions do not believe the Participation Agreement reflects the changes and demands of the modern game.
 
As a result, the position the Regions currently face is that;
 
10/32 games are not confirmed for 14/15 season in just 8 months time - 31% season total
Season ticket and match day ticket incomes cannot be confirmed
Sponsor contracts and income cannot be confirmed within contractual deadlines
Playing kit, merchandise design, orders and income cannot be confirmed within contractual deadlines
The total income currently at risk for the 14/15 season alone amounts to a possible £16-million across the four Regions and they are unable to confirm any form of robust business plan and financial forecast beyond May - in just five months time.
 
At the same time, it is very clear that massive increases in the TV revenues being achieved by the Club game in Europe will dramatically increase the funding gap between the Regions and clubs in France and England over the next five years; well beyond the reach of any potential increases in attendance or commercial revenues; whilst the funding provided to Irish and Scottish teams from their Unions remains significantly greater than that in Wales.  
 
Recognising these stark facts and as a direct result of the position they have been placed in, RRW and the Regions have had no choice but to consider every alternative to secure a truly sustainable future for regional rugby in Wales.
 
Therefore, RRW and the Regions re-affirm their commitment to the Rugby Champions Cup under the aegis of Six Nations, which will generate a guaranteed £12-million additional funding across the four regions over the next three years and help reduce the funding gap compared to the French, English, Irish and Scottish clubs.
A solution must be reached by the end of January 2014. Should this not be possible, the Regions will have no choice but to pursue further competition options immediately.

Having secured this position, the Regions are now able to plan positively based on these options, rather than the destructive alternative of massive cost cutting that they would have no choice but to undertake due to the £16-million risk they currently face as part of the existing agreement.          
 
It continues to be the absolute intent and strong desire of RRW and the Regions to work with the WRU in progressing such a positive position for the next five years of professional Rugby in Wales, or indeed to discuss any proposals WRU themselves may have that could provide an even stronger platform for sustainable and competitive professional rugby across Wales.       
 
Without change, professional rugby in Wales will fall further and further behind the rest of the European game.
 
The Regions' passionate commitment to developing world-class players in Wales, their investment in infrastructure, development networks, rugby intellect and experience to support Welsh Rugby success is absolute. It is this commitment, together with their role in promoting and celebrating the rich heritage and history within the regional and club game that they seek to protect.
 
WELSH RUGBY UNION STATEMENT

The Welsh Rugby Union is confident that professional teams from Wales will continue to take part in sanctioned league and cup competitions in the best interests of all of Welsh rugby.

The WRU also remains confident that a European rugby cup competition under the management of the ERC will take place next season. Welsh teams will also continue to play in the Pro12 league organised by Celtic Rugby Ltd.

Furthermore the WRU reaffirms its commitment to the International Rugby Board's regulations which provide that cross-border competitions and tournaments may only take place with the full approval of the relevant unions.

The WRU has received  notice that the four Welsh Regional Organisations do not wish to continue with the existing Participation Agreement, as agreed by all parties in 2009, beyond 30 June 2014.  As such the current contractual relationship between the WRU and the four Regional Organisations will end on that date.

It was always   the hope of the WRU that the four Regional Organisations would have continued with the Participation Agreement  and therefore maintain their contractual right to remain the WRU's nominated teams in sanctioned competitions.

The Participation Agreement provided a ten year rugby  framework for the professional game in Wales and is an integral part of the rugby pyramid structure in Wales.

The decision of the existing Regional Organisations not to continue with the PA has now freed  the WRU to present a new Participation Agreement focused on recognising and rewarding Regions which identify, develop and retain players capable of challenging for international honours with Wales. This is in the best interests of Welsh Rugby.

The governance of rugby  in Wales, through the elected Board of the WRU, will continue to remain in the hands of the 320 clubs of the Welsh Rugby Union.

As the governing body of rugby in Wales the WRU will continue to act in the best interests of all of Welsh rugby at all times from the grassroots through to the international game.

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