Looking at the state of Welsh rugby — players threatening to strike, empty club stadiums, empty club trophy cabinets, bad losses in the six nations, disgraced officials — I’ve often wondered: where did all the money go?
What I mean is, in most countries, the sport of professional rugby is underwritten by ticket sales from six home international matches each year.
Wales is blessed with the best stadium in rugby — the Millennium Stadium in Cardiff. It’s got the best atmosphere. It’s also massive, with a 74,000 capacity (compared to 52,000 for Lansdowne Road). Wales fills it six times per year.
What explains this disconnect? If the Millennium Stadium is full six times a year, why is Welsh rugby on its knees?
Different paths The big difference between Ireland and Wales is the way they manage and fund professional club rugby.
In Ireland at the beginning of the professional era, the IRFU decided its clubs were too small to be viable. So it elevated the provinces, which are wholly-owned arms of the IRFU. The IRFU funds the provinces directly, pays some players' salaries, and underwrites provinces' investments. Irish rugby has wholeheartedly bought into this setup. The fans, players and officials all have an interest in making it work.
Superficially, the WRU did something similar. It decided the old clubs were too small to be viable. It consolidated them into four regions.
The big difference is that the WRU didn't own the regions. It didn't control them, it wasn't responsible for their finances, and it didn't fund them heavily.
The Welsh regions never caught on. They weren't well enough funded to build great teams. Their teams weren't good enough to draw big crowds. In the critical early years of professionalism, when everything was up for grabs, they didn't win hearts and minds. A generation of Welsh kids didn't grow up dreaming of playing for them.
The following chart compares WRU and IRFU spending on the professional game plus spending on elite player development. Despite the WRU belatedly ramping up spending on professional rugby in last year, the proportionate gap in pro rugby funding between the two unions has grown in the last ten years.
The IRFU's spending on the pro game pays dividends in lots of ways: higher gates, more kids playing the game, more commercial revenue. One direct way it pays off is in higher competition revenue: prize money for succeeding in competitions. The Irish provinces now take in significantly more competition revenue than their Welsh counterparts.
Governance At this point it's worth talking about how the two unions are governed. In Ireland, clubs and schools nominate members to the provincial branches, and the branches nominate members of the IRFU committee.
In Wales, by contrast, the clubs feed into a regional district which — crucially — is distinct from the professional regions. The regional districts nominate members of the WRU board.
So in Ireland, the board is derived from the four provinces, which run the professional game. In Wales, the board is derived from the clubs, which are independent of the professional game.
So in Ireland, the top committee is dominated by representatives from professional clubs. In Wales, it's dominated by the amateur game.
The WRU's priorities If the WRU wasn't heavily funding professional rugby, where did it spend the money?
The WRU spends much more heavily than the IRFU on overheads. The IRFU spent €11.5 million on administration, marketing and support in 2022. Across the categories of business and administration, direct costs and hospitality costs, the WRU spent €28.6 million. On overheads and the amateur game, the WRU pent €23 million more than the IRFU last year. This is almost exactly the amount the IRFU outspent the WRU on the pro game.
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It would be one thing if the WRU was a bit wasteful with its current spending. But the problems run deeper than that. Twenty years of loose spending have the WRU's balance sheet in bad shape. The WRU owes €24 million of secured bank debt. The IRFU's debt lives with the Lansdowne Road stadium, in a separate company jointly owned with the FAI.
The following chart compares the amount of equity, or net assets, held by the IRFU and WRU.
The Midas curse
The Millennium Stadium was a blessing and a curse for the WRU. They developed it at a cost of only €137 million, using lots of government funding and interest-free loans from fans. It came at the perfect time, right at the beginning of the professional era. Unlike the Scottish Rugby Union with Murrayfield stadium, the WRU wasn't saddled with heavy debts to pay for it.
Because the Millennium Stadium was such a cash cow, the WRU didn't come under any pressure to get its house in order. It could throw money at politically well-connected clubs and at the blazers. And even if the regions never took off, it didn't matter because the national team kept trucking along, drawing crowds to Cardiff.
But any company can only get by on its past investments for so long. The pro game in Wales has been chronically underfunded for decades now, and it's starting to show in the national team. Wales is currently ranked ninth in the world, and there's no sign of things turning around. And attendances have been falling in the Millennium Stadium.
Irish readers will find it hard not to be reminded of John Delaney's FAI. That organisation was managed in the interests of its hangers-on — the clubs, and their friends in blazers.