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Welsh regions are still waiting for the first full instalment of the new long-term financial deal they signed with the Welsh Rugby Union (WRU).
A new six-year deal between the WRU and four professional teams was officially signed in March 2023.
The contract requires Welsh Government consent because of a current loan agreement it holds with the WRU and regions.
Discussions are still taking place.
The deal was announced by the Professional Rugby Board (PRB) which is made up of representatives of the WRU and Cardiff, Ospreys, Dragons and Scarlets.
It included a new Professional Rugby Agreement (PRA) that will run until 2029 and “provide financial predictability”.
External agencies
It was announced when the deal was signed that some of the key features of the new PRA would be “reliant on certain external approvals related to existing loan arrangements”.
The regions and WRU signed up to this agreement, aware of this detail and are still awaiting the approval required.
Those issues would have to be resolved before the full first payment of the new deal could be given to the cash-strapped four regions.
The sides are still receiving funding from the old financial agreement but are struggling as they have to pay outstanding bills.
There will be a number of organisations who would have to give their approval. The most significant existing loan agreement is the £20m secured by the WRU on behalf of the four Wales professional regions at the height of the Covid-19 pandemic.
An £18m government loan was combined with another £2m of funding secured from World Rugby with the total made available between the four sides who would then have to repay the loans.
The WRU announced in March 2022 they had reached a re-financing agreement with the Welsh Government which they said would allow for more flexibility and included extending the term of the loan.
A Welsh Government spokesperson said: “We are engaged in discussions regarding the existing loan arrangement and proposed changes to the WRU’s business plan.
“Short-term measures to allow payments to proceed have been agreed whilst we work through the detail of the proposed changes.”
Scarlets chairman Simon Muderack hopes the money will be released soon from the new deal.
“Some of the money has been released but there is still a final approval process to be had with the Welsh Government to release the full extent of the money into our coffers,” Muderack told BBC Radio Wales Sport.
“That is a process we need to get through as quickly as we possibly can and that will carry us through the end of this season.
“We have got more work to do through next season and the season beyond. We have worked hard on this deal. I personally worked out I worked on this deal for 23 months and nine days.
“That deal is done now and I do believe the new structure we have put in place has a lot of good aspects to it. We just have to grow the business.”
Reduced wages and squads
Long-lasting financial uncertainty in Welsh rugby reached crisis point during the 2023 Six Nations with Wales’ international players threatening not to play England amid an impasse that had lasted since the summer of 2022.
That threat was averted but reduced player squads and wages have already seen high-profile departures from the regions.
No Welsh region managed to finish in the top eight of the United Rugby Championship (URC)
Salary caps will be implemented from the start of the 2023-24 season which will be £5.2m for each of the four teams, reducing to £4.5m the following season.
Muderack insisted the four professional sides have a responsibility to create their own growth.
“For the upcoming season we are in pretty good shape and one we have been planning for some time,” said Muderack.
“For the following season across the regions we have some work to do. Now the deal is in place we have to go and grow our businesses.
“We are not talking about growth at the moment, we are endlessly talking the downward spiral and we have to stop circling about where we are today. We have to bring joy back to the game.
“A lot of hard work is required but this is solvable. We face a lot of tough decisions and the clock is ticking but there is a lot of things we can do and once we solve the problems for the season after next, we need to grow the game.”
