This is a delicate, sensitive moment for Welsh rugby. In public, hard words have been spoken – most of them by senior figures associated with the Swansea-based Ospreys, by some distance the leading side in the country – about the relationship between the governing body and its national team, startlingly successful both on and off the pitch, and the four professional regions, struggling horribly in all the same places. In private, serious negotiations are in progress that could lead to profound changes in the way the sport is structured west of the Severn.
The man at the centre of these talks is Roger Lewis, the Welsh Rugby Union chief executive who has delivered a 44 per cent hike in turnover and a 31 per cent rise in earnings since 2007: sizeable figures that sit snugly alongside equally substantial returns on the field of play, which include two Six Nations Grand Slams over the same period and a first World Cup semi-final appearance in almost a quarter of a century.
Lewis is not one of life's natural Trappists – when the WRU has a good news story to tell, he goes out of his way to ensure it is told well – but he rarely speaks out when the political fur is flying. This week, however, he agreed to share his thoughts on the great matters of state.
In heading up regular meetings between the WRU and delegates from the regions aimed at "finding a way to fix this situation", he is pushing for a new compact that would see the leading players in the country effectively placed on central contracts by the governing body and the quartet of professional teams, all of whom are losing money by the potload, yield some of their autonomy – but not all of it – in return for greater financial assistance. This would move Welsh rugby some way towards the ultra-successful New Zealand model, although Lewis points to the four-province system in Ireland as a better comparison.
"It's a really heavy thing to say, but we are where we are largely through past managerial incompetence at regional level," he states after careful thought. "I've kept my counsel on this until now. Why? Because a year ago, when we saw the regions heading towards the rocks, we commissioned PricewaterhouseCoopers to produce a detailed report – to go into each of the four clubs [Ospreys, Cardiff Blues, Newport-Gwent Dragons and the Llanelli-based Scarlets] and analyse their financial positions and projections. That report is now completed, although it hasn't been published. What it shows, and there are senior figures in regional rugby who acknowledge this, are a lot of self-inflicted wounds. This is the backdrop to our current negotiations."
At this point, Lewis offers a brief history lesson. "Back in 2009, we signed a contract with the four teams that presented them with what I call a 'horizon' of around £80m over five years. How was that constructed? To begin with, there was £6.2m a year in return for international player release. Then, I personally negotiated a television deal for them in respect of the Celtic League, or the RaboDirect Pro12 as it is now. Together with the money from European tournaments – and I've spent six years on the European Rugby Cup board ensuring income is maximised – that realises £9m a year. We also agreed to fund the four regional academies when they told us they couldn't afford to do it themselves.
"I'm not trying to score points here – I'm trying to position myself so we go forward, not back – but in '09 we offered the regions financial certainty and they failed to make the most of it, failed to flourish. But that's water under the bridge because I would also say this, and it's vitally important: the meetings we're presently engaged in are between like-minded people; realistic, logical men; good men; people who are leaders in both business and rugby and are happy to play their part in honest, objective discussions about where we go from here. In this sense, our relationship with the regions is better than it's ever been. There is no red mist, there are no cheap shots. These are fruitful talks and I feel very positive that a sensible agreement can be reached."
So what exactly might "sensible" look like in Lewis's eyes? "My ideal model would be complete WRU ownership of the four teams with sufficient devolved responsibility to enable them to go about their businesses as they see fit," he replies. "But that's not what we're looking at here. What we're working on is a hybrid – a system of joint control. At the heart of our discussions is a desire to find a way of working more closely together in establishing proper structures under which we can maximise the performance of our best players – and indeed our developing players – while leveraging this fantastic machine we have at our disposal [by which he means the Millennium Stadium] so regional rugby can function optimally.
"Look, if any of the four regions wanted to pay off their debts and sort out their loans, I'd be happy to take the keys off them. What I won't do is take on their liabilities. I've been completely up front about this, every step of the way: if we at the WRU are going to put more money into the regions and take on greater risk as a result, we have to be able to exert greater control. That's a fundamental of business life. I had to build a commercial model that would guarantee the regions what I promised them in 2009 and if we're talking about putting in more money on top, I'm the one who has to generate it."
Lewis feels he has made a considerable impact in his six years as CEO – "a job people told me was a poisoned chalice but which I saw as a glass of champagne, even though Welsh rugby was effectively dysfunctional, without an agreed budget or any overarching sense of vision, and I was basically in retirement" – and the national balance sheets, competitive as well as financial, bear him out. But some of the forces at work in the game are simply unmanageable, French financial muscle being foremost among them.
One of the issues that has exacerbated rank-and-file supporters' concerns over the future of the regional teams is the cross-Channel exodus of players as high-profile as Lee Byrne, James Hook, Mike Phillips, Gethin Jenkins and Luke Charteris. Many expect Jamie Roberts, the top-calibre Blues centre and one of the country's prize sporting assets, to follow the trend, and there has been talk of the increasingly influential Dragons flanker Dan Lydiate doing something similar. At this rate, Wales could end up as a feeder country for the French Top 14 league.
"There are certain salaries being offered in France that no English club could match, let alone a Welsh side," the CEO acknowledges. "Toulon came to Cardiff in the last round of Heineken Cup matches and had four French players in their line-up. Four! It was like the Foreign Legion. In my view, French club rugby is in danger of killing French rugby. In fact, it's in danger of killing European rugby. We can't go down that road, and we won't.
"What we can do, however, is create an environment, a relationship with our players, that will stem the tide. We must start by congratulating Scarlets for going out of their way to secure the services of Jonathan Davies [who partners Roberts in the Wales midfield] and doing the same in respect of Ospreys, who paid top dollar to keep Adam Jones [the outstanding tight-head prop] in the country. Those are major steps forward and, if those of us sitting around the negotiating table come to an arrangement that underpins the regions' future, I believe we'll see more of it."
All of which brings us back to the numbers game: not the game Lewis has been winning year on year since his arrival at the WRU, reflected in annual turnover and profit figures that would be the envy of any CEO in the sports business, but a game that means much to the paying rugby public in the principality. Is he, or is he not, committed to keeping the four existing teams – or regions, or franchises, or whatever they end up being at the end of these negotiations – as the bedrock of the professional game?
It is an important question, for it is not so very long ago that Welsh rugby rejoiced in a nine-team first division. Even more recently there were five regions, and the pain of losing the Celtic Warriors is still keenly felt, not least in the great union towns of Bridgend and Pontypridd, which were left bereft. Could economic factors see a further cut to three, or even two?
"Everything we've been talking about is based on figuring out how we can sustain the four-team model, with the greater input and involvement of the union," he responds. "It hasn't worked so far, if we're honest, but that's not to say it cannot work if we draw the right conclusions from what has happened and reach an agreement on what should happen going forward."Reuse content