Rant! – Finance and Future

With the revelation that the Llanelli Scarlets face extinction from rugby all together, boards of directors everywhere will begin to check their books that extra time before giving their accountant that OK sign for signing their next star man. But how loud does money talk in Wales, and is it safe to gamble with sugar daddy’s cash?

Like at Strady, the Cardiff Blues main source of cash is financial backer, Peter Thomas – former owner of “Peter’s Pie’s”, and former player. While this has meant fans get to see the likes of Jonah Lomu, Xavier Rush and Ben Blair is their team shirt, there are serious risks in playing with money that you don’t own.

This is the problem at Llanelli.

Their own problems come from the fact that they’ve been hit by a double-whammy in that their proposed move away from Strady Park has been rejected by the council, and thy cnnot sell the land for housing yet, and that money-man Huw Evans has said he’s no longer ploughing money into the region.

They spent money on players such as Regan King and Steven Jones, thinking the sale would go through and leave the clubs finances in the black, however this assumption could well see the death of professional rugby in West Wales.

The delay in the sale looks set to cost them around £2 million, a sum they cannot afford. This means they are getting more and more into debt, and have no means of making money.

There is no doubt that they are definitely in a lot of trouble.

As for the Dragons, their books are actually one of the healthiest of the four regions, with Paul Turner sticking to his shoe-string budget during the off season, and excellent management with their forecasted earnings/losses.

The Blues however are not far away from a major epidemic.

Currently, Cardiff RFC Ltd. (the company which owns both CRFC and the Blues) have a loan off Peter Thomas, a figure of around £2.5 million. What’s worse is that Thomas is actually charging a higher rate of interest than high street banks. Thus leaving the Blues in a spot of bother.

However as much as you can resent Thomas for this rather businessman approach to his former club, without him we would be in a lot o trouble.

It’s though Thomas’ long-term aim was to write off the entire dept in exchange to become majority shareholder. However, his recent calls for central contract do seem to reject this.

If Thomas were to leave and call in his debt, it would leave us in a position like the Dragons wee in last year, however not for long.

There is a consortium of Cardiff’s richest men who have been wanting to buy out Thomas for a long time, and would happily pay him off in exchange for his former position.

These men are believed to be much better for the running of the club, and in the long run would see a more healthy future.

Either way, Thomas holds all the cards. Should he leave, the fact of the matter is all hell would brake loose. Effectively Cardiff RFC Ltd. would be for sale.

In football, w can see this happening all the time. In the last few years, Manchester United were bought out by the Glazer family, Chelsea by Roman Abramovic and this year alone Aston Villa and Portsmouth have soared up the table following new owners of the club. But this is not a good thing, you only have to look as far as Leeds, formerly in the Champions League, who fell from grace after £30 million debts following their financial backer leaving them in the lurch.

So what is the answer to saving our beloved clubs? Many feel central contracts are the way forward, with the WRU paying the majority of Welsh players in the squad’s wages, and the club paying any foreign star they wish to bring in. This is good for financial reasons, but if you look as the clubs, they rarely field a full strength team. As a fan, it can be very frustrating watching a second-string side play in the league, just to have them play for Wales.

Another issue with central contracts is that the WRU would spread the players evenly across the sides, so next season, Nick Robinson could be drafted to the Ospreys and there is noting Dai could do about it.

The only other answer is that the clubs begin to fund themselves, much like a lot of Guinness Premiership clubs do. London Wasps and Leicester are amongst a number of English sides who fund their side simply on merchandise and sell-out games every week. This is of course the ideal answer, but is by no means an easy feat, in fact in Wales it’s looking very far away.

The Ospreys are closest to this, generally hitting 8,000 fans a week; the Blues are just behind with a good crowd size. Unfortunately, the Dragons and Scarlets are a long way behind.

The Cardiff Blues have also made strides by moving games to the Millennium Stadium. Last year in the Celtic League, Cardiff twice recorded the record crowd attendance, the latter in the Mil Stad against Leinster a huge success.

But regardless, we have a long way to go before we can ever begin to fund ourselves.

Until then, it is just a case of sitting an d waiting for the inevitable to happen, and the club become embroidered in a bidding war and major changes occur at the top. Either that, or the WRU take control, and who knows what will happen.