Scarlets executive chairman Simon Muderack says Wales’ professional rugby sides are in a “perilous position” and a long-term deal needs to be agreed with the Welsh Rugby Union (WRU).
Scarlets, Cardiff, Dragons and Ospreys are negotiating with the WRU to resolve the long-term financial future of professional rugby in Wales.
Muderack insists a deal must be agreed.
“There is no doubt we’re in a perilous position as the four professional clubs across Wales,” said Muderack.
Representatives from the four sides and the WRU sit on the Professional Rugby Board (PRB), which runs the game in Wales.
“We’re working hard, have made progress but there is more work to be done,” said Muderack.
“We need to come up with a first version of a solution we can enact pretty quickly.
“We all need to get on with our seasons on the pitch – we should already be deep into planning for next year.
“The time this has taken up is important and we want to be able to plan several years into the future. That requires time and effort but we’ve got to get on with it.”
Muderack insists the regions remain united in the negotiations with the WRU.
“Ultimately throughout this process, the regions have been well-aligned and we’re collaborating well to come up with solutions,” he added.
“The working relationship between us has been good so long may that continue.”
There remains a discord between the WRU and regions on how much money the professional sides should receive although a £32m deal has been mooted.
“It’s fair to say there is a gap at the moment,” said Muderack.
“The £32m is specific but what we’re looking at is ideally a multi-year model where the numbers would be different.
“There is a big gap in terms of funding although it’s not just about money.
“It’s about the structure, how efficient we are, how we work with the union, work together and with players.”
Any proposed deal worth £32m from the WRU would come with caveats.
Muderack believes the return of benefactors, who propped up the Welsh domestic game when it became regional in 2003, was not beneficial.
That model was phased out when the last deal, dubbed ‘Project Reset’, was agreed but it has returned to the agenda.
“When we did Project Reset a few years ago, the whole purpose was to get the game self-funding on a sustainable basis,” added Muderack.
“Let’s thank those benefactors for their contributions in the past but move beyond that. I don’t think any of us want to go back to that.
“We should be doing a better job of working together and with the union to have a long-term strategy that ideally doesn’t require benefactors sticking their hands into their pockets.”
Muderack also believes any deal should avoid any more debt being heaped on the professional sides.
Cardiff, Scarlets, Ospreys and Dragons already have a combined £20m loan to be repaid that originated from the Covid-19 pandemic.
The loan was originally taken out with the NatWest bank by the WRU in order to keep the Welsh professional game afloat amid the huge losses incurred due to lockdowns.
The £20m debt was passed to the regions, who will have to repay the loan over a 20-year period.
“Ultimately, we’ve got to do what we’ve got to do but would you look at these businesses and say that in the short term more debt is a good idea?,” Muderack added.
“You wouldn’t. We’ve got to look at the long-term prosperity and viability of this business as well as its immediate short-term survival.
“Ideally, we would not be burdening the business with more debt at this moment in time.”
Muderack accepted the four professional sides need to improve when it comes to creating their own revenue.
“Clearly on-field success has a big impact in terms of the money that comes through the tills and is also why we are here and exist,” added Muderack.
“We’ve got to do a better job of that.
“We are lucky we’ve got this amazing facility (Parc y Scarlets) which to be blunt is the second biggest asset in Welsh rugby, second only to the Principality Stadium. This is an asset we want to get more revenue out of.
“We want to work with United Rugby Championship (URC) and European Professional Club Rugby (EPCR) to help those competitions generate more revenue to us.
“We are also motivated to work with the WRU to help generate more revenue which ultimately will flow through to us.
“We’ve all got to do a better job to run our businesses for greater prosperity.
“It’s not just one silver bullet, but having that multi-year plan and a funding solution enables us to go and focus on other things.”