Welsh Rugby Union posts £4.3m loss with £1.9m given to departing employees

Warren Gatland (centre) returned to Wales as head coach in December 2022 while chief executive Steve Phillips (left) and chair Ieuan Evans (right) left their roles

The Welsh Rugby Union recorded a £4.3m loss with a turnover of £101.3m for the year ending June 2023.

Former chief executive Steve Phillips, who left his position in January 2023, received a pay-off of £480,000 as part of £1.9m given to departing employees over a 12-month period.

Last year the WRU recorded a profit of £3.2m and turnover of £94.3m.

The figures included in the WRU annual general report covers the period from 1 July, 2022 to 30 June, 2023.

The WRU annual general meeting is due to be held on Sunday, 19 November.

Facts and figures

The WRU says it invested £16.1m in its senior men's and women's international and pathway sides.

The investment in the professional women's game has grown to £2.8m, with the WRU saying it spent £37.6m across Wales' four professional teams and allocated £11.6m to the community game.

A total of 65% of the group's income was raised from staging international matches featuring senior Welsh teams and the commercial activities associated with those teams.

Average ticket income for rugby internationals was £59 and the average attendance was 68,000, up from 62,000, or 92% of capacity.

Commercial income increased to £16.4m from £14.5m, although match income was reduced from £43m to £39.5m with one less home Six Nations game explained as the reason why.

Hospitality and catering income was £18.7m, up from £15.9m. The Parkgate Hotel was in its first full year of trading, with the WRU claiming increased revenues of £11.1m from £5.7m.

Net bank debt has risen from £13.9 to £21.6m while net debt has gone up to £117m from £109.4m.

Net debt is defined as bank loans, debenture loans and finance lease obligations, less cash balances. Net bank debt is bank loans, less the cash balances.

'Maximum reinvestment'

"All the profits made by the WRU are fed back into the game in Wales, we are guardians of our game and we take this responsibility very seriously," said interim WRU chief executive Nigel Walker.

"We have a stated policy of maximum reinvestment into the game annually, rather than retaining profits.

"We have been able to increase our investment in Welsh rugby by £2.4m, up to £65.3m, despite the tough financial climate our game is facing.

"We continue to explore other avenues to maximise the commercial potential of our game and take great care to prioritise and invest in new areas that will provide a return that we can plough back into Welsh rugby."

Georgia defeated Wales in Cardiff in November 2022

Turbulent year

The report covers a tumultuous 12 months for Welsh rugby on and off the field.

Following home defeats against Georgia and Australia in November 2022, head coach Wayne Pivac was sacked and replaced by the returning Warren Gatland. Pivac's assistants Gethin Jenkins and Stephen Jones were also released.

Gatland oversaw one win and a fifth-place finish in the 2023 Six Nations. Wales players threatened to strike before the game against England in February 2023 because of contractual issues, with the stand-off eventually resolved and a new six-year Professional Rugby Agreement (PRA) signed.

The playing budgets of the four professional sides - Cardiff, Dragons, Scarlets and Ospreys - have been slashed from around £7.2m to £5.2m per side for the 2023-24 season, with a further reduction to £4.5m expected for 2024-25.

Off the field, a BBC Wales Investigates programme in January uncovered allegations of sexism and misogyny at the WRU.

It prompted the governing body to launch an independent investigation, with the report's findings expected later this month.

The programme has already resulted in major changes with Phillips stepping down as chief executive in January and Walker taking on his interim role.

Walker has since been appointed as executive director of rugby and will take up the post officially in January when Abi Tierney becomes the first female WRU chief executive. Walker admitted in the report he felt "a lifetime had gone by" since he took over as interim chief executive.

An extraordinary general meeting (EGM) was called in March, with the clubs voting for major governance change to the WRU board to provide greater diversity and expertise within the organisation.

The WRU was aiming to redress the gender imbalance, with an ambition that at least five of the 12 board members are women, including one of the top two jobs - the chief executive or chair.

The clubs voted for an appointed independent chair rather than somebody elected by the clubs. This resulted in former Wales captain Ieuan Evans stepping aside after only officially being appointed in October 2022 at the last AGM, with Richard Collier-Keywood appointed in June 2023.

The number of independent members was doubled from three to six, while elected national or district members was halved from eight to four.

High-profile departures such as Phillips, Pivac, Jenkins and Jones received pay-offs, which are included in the figure of £1.9m, while Gatland was also appointed with two new coaches Alex King and Mike Forshaw.

The new-look Welsh Rugby Union of executive director of rugby Nigel Walker, chief executive Abi Tierney and chair Richard Collier-Keywood

What the WRU says

Collier-Keywood admitted the costs paid out to former employees has taken its toll.

"I think that the team at the WRU has delivered a strong performance against a year full with difficulties," said Collier-Keywood.

"These difficulties have cost Welsh rugby significant money as the WRU parted company with some significant individuals, including a long-serving executive and chief executive and also some senior coaches during the year. The costs of these changes are disclosed clearly in our accounts and amount to £1.9m.

"We have also taken a fresh look at some accounting in prior years, and made some restatements which will put us on the correct footing to approach the years ahead.

"These are all fully disclosed in the financial information that we are issuing today"

Departing WRU president Gerald Davies added: "In what proved to be a demanding and at times punishing year on and off the pitch, I can take comfort the WRU acted swiftly on all accounts to ensure foundations have been laid for a successful and optimistic future.

"It seemed at some junctures over the last 12 months the WRU was under a constant barrage of criticism, yet due to the sterling work of our staff and members and amazing effort put in by our clubs we got through turbulent times, and the future is brighter than it was this time last year."

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