Cardiff Rugby: Funding needed to solve 'cashflow pressures' says chief executive Richard Holland

Richard Holland (left) in conversation with Wales head coach Warren Gatland

Cardiff chief executive Richard Holland says his organisation have "cashflow pressures" as they await the first instalment of the contract they signed with the Welsh Rugby Union (WRU).

A six-year deal between the WRU and Wales' four professional teams was signed in March.

The deal requires Welsh Government approval but that has yet to be agreed.

A major sponsor of the regional game has also announced it will not continue to back Welsh rugby.

Independent fuel supplier Oil 4 Wales, whose headquarters is in Nantycaws, Carmarthenshire, says it is suspending sponsorship until "transparency is apparent and issues are resolved by the WRU, especially with the funding issue surrounding the regions". Oil 4 Wales say they will honour existing contracts.

Why is the Welsh Government involved?

Holland outlined his issues over a funding delay in his latest newsletter to Cardiff supporters.

"Frustratingly and despite signing the new PRA we are yet to receive monies from the WRU due to a delay in getting final approvals," said Holland.

"This is putting cashflow pressure on the company but we hope to be in receipt of the money very soon."

The financial 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".

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 payment of the new deal could be given to the cash-strapped four regions.

There will be a number of organisations who must give their approval, including most notably, the Welsh Government.

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.

It is understood the sides are still receiving funding from the old financial agreement and any new payments will be backdated.

Cardiff are not the first to express concerns after Scarlets chairman Simon Muderack told BBC Radio Wales Sport of the issues in April.

"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," said Muderack.

"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."

A Welsh Government spokesperson said: "We are actively engaged in discussions regarding the existing loan arrangement and proposed changes to the WRU's business plan."

Sponsor suspends backing for Welsh rugby

Wales captain Ken Owens in action for Scarlets

Meanwhile, Oil 4 Wales have outlined why they are threatening to stop backing Welsh rugby in the future, also citing the resignation of major officials at the WRU, that would include the departure of chief executive Steve Phillips in January.

Oil 4 Wales have been involved with all four professional sides and are the main sponsor for the Scarlets.

"Oil 4 Wales, is a family-run business brand that can be seen across all rugby regions in Wales in addition to numerous community rugby and sport clubs," said founder Colin Owens in a statement.

"Over the last two seasons, Oil 4 Wales became the main sponsor of the Scarlets region.

"We strongly believes their ethos of team work and working with and for the communities of Wales is replicated by both the professional and community rugby clubs in Wales.

"Going forward, in light of recent events involving the resignation of three major officials at the WRU and the future of Welsh rugby, Oil 4 Wales have decided to suspend any future sponsorship for both the professional and community clubs (except for the contractual agreements) with immediate effect until transparency is apparent and issues are resolved by the WRU, especially with the funding issue surrounding the regions."

Competing in Europe

There was no mention in Cardiff's May newsletter of the future of director of rugby Dai Young. It is understood he was suspended before the final game of the season, but Cardiff have only stated his absence was due to "unforeseen circumstances".

"We are acutely aware of the frustrations among supporters regarding the lack of updates on player recruitment, retention and other affairs within rugby," added Holland.

"However as soon as we can communicate with you we will, and we hope to begin making some announcements soon."

Cardiff will be the only Welsh side in the Heineken Champions Cup next season after finishing as the top Welsh region in the United Rugby Championship (URC) in 10th place out of 16.

The reduction in finances and squad sizes has seen the Cardiff squad affected with 16 players leaving and the side struggling to recruit.

"It is certainly going to be a massive challenge to compete in the top tier of Europe given the state of the game in Wales at the moment," said Holland.

"But when we have all of our players available we will still have a very strong team."