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We are one week on from the shock news that Cardiff Rugby, the URC team based in the Welsh capital, was to go into administration and transfer into the ownership of the Welsh Rugby Union, and the much heralded takeover of the club by Helford Capital had been a failure. It has been a difficult time for fans but, slowly, we have started to get some answers as to how this happened and what might come next.
We are one week on from the shock news that Cardiff Rugby, the URC team based in the Welsh capital, was to go into administration and transfer into the ownership of the Welsh Rugby Union, and the much heralded takeover of the club by Helford Capital had been a failure. It has been a difficult time for fans but, slowly, we have started to get some answers as to how this happened and what might come next.
It has been revealed that Cardiff going into administration was not something that happened overnight.Administrators has been contacted some weeks ago with the WRU being kept abreast of the situation. That this didn’t get out in the goldfish bowl of Welsh rugby is almost impressive.
Hindsight is 20:20 but those close to the club are now saying the warning signs were there. For instance, when Helford Capital assumed ownership of the club, they did not appoint and new management or make any changes to the board - peculiar for a business investing millions of pounds into an organisation.
Welsh rugby has been waiting on tenterhooks for almost a year in anticipation for the WRU’s new RPA deal with the four regions that will deliver them from the dark times and get the national game back on track. Until last week, everyone had assumed the delay was down to incompetence at the Union. However, we now know that the deal could not be signed as Cardiff were unable to present the funds they would be obligated to commit under the proposed deal.
How exactly the WRU takeover of Cardiff impacts the timeline of that deal, we don’t know - but it probably hasn’t made things easier. On Friday last week the Union put out what it called it’s new strategy, but it was closer to a reheated version of the PDF they put out last year listing their goals and targets by bullet point. It seems slow going just got even slower.
The WRU assumed ownership of Cardiff Rugby at a cost of 480,000 pounds + 300,000 worth of liabilities. For context, a 3 bed bungalow in Leamington Spa would also cost around 480k. Cardiff’s lack of assets meant that taking over the business was ‘cheap’ for the WRU. In fact, it cost them less than the annual salary of recently departed Wales Men’s head coach Warren Gatland.
WRU CEO Abu Teirney confirmed the low cost of taking over Cardiff was actually less than the prospective fine from the United Rugby Championship for dropping down from the contracted 4 regions, making the decision ‘easy’.
Whilst Teirney was emphatic in her answers regarding the safeguarding of rugby in the Welsh capital, saying it was imperative to Welsh rugby’s new strategy that Cardiff survive, she refused to commit the other 3 regions would have been so lucky.
If avoiding fines from the URC was indeed a key driver in the decision, one assumes the Ospreys also would have been saved as they are in a similar position to Cardiff: owning almost none of their own assets. However, the Ospreys have looked in peril of extinction several times over the last few years, so perhaps the decision might have been different.
The Dragons and the Scarlets are have different situations. The WRU had the chance to wind down the Dragons when they owned them right up until last summer, but chose not to. Dragons also own their own ground - Rodney Parade - so the cost of taking them over would be much higher (it also makes it highly unlikely they would go into administration thanks to having such a valuable assets to leverage).
The Scarlets also have their own ground, but where the Dragons are owners and Ospreys and Cardiff are renting, the Scarlets are still paying off the mortgage. This would make them more difficult to buy out and with many suspecting the WRU do not want two regions in the west of Wales, perhaps their safety would have been most at risk.
Following the news of Cardiff’s administration, many a side-eye was shot in Sam Warburton’s direction - he having been the loudest advocate for cutting a region. Within hours, it was revealed in a face-saving article by the Times that Warburton had stepped down from his role on the Cardiff board.
Curiously, however, it was said that his stepping down had occurred two weeks prior, but had been unannounced by either himself or the club until after the WRU takeover. Warburton has since insisted that he knew nothing of the impending financial doom of Cardiff whilst he was on the board - which is quite hard to believe unless he had close to zero contact with anyone actually at the club - and said his stepping down was more due to conflict with his media commitments (despite the initial Times report saying it was to focus on his fitness company).
One suspects that the conflict he refers to is that he constantly undermines regional rugby, the competition the regions play in and flies directly in the face of the WRU’s stated position on professional rugby in Wales. He admitted in his Times column his views had created ‘awkwardness’ with the Cardiff board; them and half of all rugby fans in Wales you suspect.