Welsh Rugby Union wants break from Covid loan interest payments
- Published
The WRU's chair said £2m a year was being spent on loan repayments and interest
The Welsh Rugby Union (WRU) has asked Welsh ministers for three years of "breathing space" on interest payments from an £18m Covid recovery loan.
Its chair said some of the changes the organisation is making after a damning independent report into its culture could face cuts without it.
Richard Collier-Keywood and new WRU chief executive Abi Tierney were appearing before a Senedd committee.
Last year an independent report found a toxic culture at the WRU.
It followed allegations in a BBC documentary.
Later on Wednesday it emerged that the Senedd will vote next week on whether live Six Nations rugby coverage should remain on free-to-air TV, after the UK government's rejection of calls for the tournament to be moved to the so-called "crown jewels" list of sporting events.
The Welsh government provided an £18m on-commercial terms loan to the union in 2022, which it passed on to the four professional sides.
Mr Collier-Keywood told the Senedd's Culture and Sport Committee: "We have asked the Welsh government to reconsider its position in relation to those loans.
"The rationale for that is that we think we need a little bit of breathing space to get this new strategy in place, to get new income streams and to get the benefit of some of the commercial expertise which we've now got round the board table to deliver a better financial outcome for the WRU.
"But it's really hard to do that instantly.
"The only way you can do that it by cutting costs in an organisation, and I think it would be a great shame to cut into some of the good things that are currently being done by the WRU.
"So we have asked for some breathing space in relation to the Welsh government loans and they have said they will go away and think about that."
Richard Collier-Keywood is a barrister and ex-senior adviser to the Department for Digital, Culture, Media and Sport
Mr Collier-Keywood said that when the loan was agreed it had interest payments of 2.25% above the Bank of England base rate of 0.5%.
But rising interest rates mean now the payment is 3.25% over a base of 5.25%, a total of 8.5%.
He said the request for help had been made to Deputy Minister for Sport Dawn Bowden in a meeting last Thursday.
Conservative MS Tom Giffard asked if the WRU was looking for the government to take the 3.25% "bump-up" off the loan.
Mr Collier-Keywood said he thought there were a number of things that could be done, and also cited more favourable terms in UK government loans for clubs in England.
He said that loan repayments were having a "very severe" effect on the four professional sides - Ospreys, Cardiff, Scarlets and Dragons - with £2m a year being spent on repayments and interest.
"If we do not get that breathing space we are going to a Plan B as yet undefined," he said, and added that cutting the number of sides was not without its own issues.
"What we're really asking for is that bit of breathing space for three years so we can finance things as people would want them financed."
A Welsh government spokesperson said: "An initial discussion has been held and we will consider the information presented."
'Avoid putting at risk the future'
After the committee session, Mr Giffard backed the WRU's call, urging ministers to "take the heat off" the union.
"The WRU are paying well above the initial rate of interest on this loan, which is putting both the rugby regions and community game at severe risk," he said.
"The Welsh Labour government should act quickly to avoid putting at risk the future of our national sport."
Earlier in the hearing Mr Collier-Keywood said that the vast majority of recommendations from the independent report into the WRU's culture would be completed by the end of 2024, and that another independent review would take place in spring 2025.
Ms Tierney, who is only 13 days into her role, said she had been "struck by a real determination to turn things round and build for the future."
The Six Nations is not on the free-to-air list of live sporting events
Later on Wednesday Senedd members turned their attention to the question of whether Six Nations rugby should continue on free-to-air TV, with news the Welsh Parliament will vote on the issue next week.
The UK government has rejected suggestions it should ensure coverage of the tournament is made available to the widest possible television audience.
But last year a UK government minister indicated it could be looked at again if the Senedd made a compelling case.
The Welsh Conservatives will use a debate next Wednesday to call on the UK government to include the Six Nations on the list of sports protected for free-to-air television.
Welsh Labour government Deputy Sports Minister Dawn Bowden called it "an excellent move" and said "the point we can make to the UK government is that this has cross-party support in the Senedd."
The list means live coverage of the Rugby World Cup final, the football World Cups, the Olympic Games and Wimbledon finals have to be offered to free-to-air TV channels such as the BBC, ITV or Channel 4 on fair and reasonable terms.
The Six Nations is not in the group A list, but is in group B, which says it can be on a subscription service as long as highlights are offered to free-to-air channels.
The current BBC-ITV rights deal for the Six Nations is set to end in 2025.
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