Cardiff set for administration with WRU in line for takeover

Cardiff play at the Arms Park but do not own the ground

Cardiff Rugby will declare their intention to go into administration with the Welsh Rugby Union (WRU) in line for a takeover of the regional side.

The Welsh professional rugby team has served a notice of intent (NOI) to appoint an administrator.

That is a formal document filed in court by a company or its directors to inform parties the company intends to enter administration, a process aimed at rescuing a struggling business from liquidation.

Cardiff staff, including players and coaches, held an emergency meeting on Tuesday afternoon with chief executive Richard Holland.

A statement read: "Cardiff Rugby can confirm notice of intention to appoint administrators has been filed.

"Please rest assured everything possible is being done to protect our employees and the future of the club.

"We have a plan in place and we will update you as soon as possible."

The WRU cannot officially step in straight away but is set to support Cardiff by initially taking on the day-to-day running of the organisation.

A WRU statement said: "We are aware Cardiff Rugby have confirmed notice of intention to appoint administrators, and we are working closely with the Cardiff Board and the administrators to safeguard the future of professional rugby in Cardiff."

The CF10 Rugby Trust reassured its members they would do their "utmost to ensure the survival of our great capital city club".

A statement from chair Lynn Glaister on behalf of the Trust read: "Whilst shocked at the news we now need to look to the future."

Investment group Helford Capital Limited completed a Cardiff takeover in January 2024 after it acquired an 84.55% shareholding in the regional team.

The news of Cardiff's administration comes with the WRU due to announce a new deal with all four Welsh professional sides - called the Professional Rugby Agreement (PRA) - as part of the "One Wales" strategy through until 2029.

The premise is based on the four regions - Cardiff, Dragons, Ospreys and Scarlets - being functioning independent businesses with private investment.

Who are the Cardiff owners?

Cardiff are currently ninth in the United Rugby Championship table

The investment of Helford Capital Limited in Cardiff Rugby was led by British businessmen Phil Kempe and Neal Griffith, who are on the region's board.

Kempe is a Welshman with an association stretching back more than a decade with the club.

Cardiff said at the time that Kempe had a range of successful business interests across multiple industries in the UK, Canada and the Middle East.

Griffith, who also has Welsh roots, is a former investment banker with numerous global business interests as an investor and director.

The duo had significant business relationships in the United Arab Emirates, which they said they planned to leverage for Cardiff's benefit.

The takeover followed the death of former chairman and benefactor Peter Thomas in March 2023.

The deal secured the minor stake of the Thomas family and other significant shareholders.

The takeover was approved by a "99.99% majority" at Cardiff's general meeting.

The investment group gained approval from the Cardiff board, the WRU and the Cardiff Athletic Club, which retained a minority shareholding in the club.

The due diligence test was undertaken by an independent London-based company.

Cardiff Rugby chair Alun Jones said the takeover would "represent a huge moment in the history of Cardiff Rugby and gives us a bright, secure and exciting future".

Cardiff history

Cardiff is regarded as one of the grand club names in world rugby.

Greats of the game including Cliff Morgan, Bleddyn Williams, Sir Gareth Edwards, Barry John, Terry Holmes, John Scott, Neil Jenkins, Jonah Lomu, Gethin Jenkins and Sam Warburton have all worn the Cardiff shirt in different guises.

Cardiff Rugby were formed in 1876 following an amalgamation between Cardiff Wanderers and the Glamorgan Football Club and the first game took place on December 2, 1876, against Newport RFC.

The Blue & Blacks became universally acknowledged as one of the world's most famous and successful sides.

Playing at Cardiff Arms Park, they claimed victories over major touring teams, including Australia, New Zealand and South Africa, and achieved numerous national honours.

With the advent of regional rugby in 2003, Cardiff was granted its own standalone professional team.

They initially played under the Cardiff Blues brand, with a semi-professional Cardiff RFC side beneath them playing in the Welsh Premiership.

The region originally encompassed Cardiff and the Vale of Glamorgan but following the demise of the Celtic Warriors in 2004, Cardiff club took on responsibility for a wider area that included Rhondda Cynon Taf, Merthyr and Powys.

Cardiff dropped the 'Blues' title in 2021 when they were rebranded as Cardiff Rugby.

In the regional era, Cardiff have won the European Challenge Cup twice in 2010 and 2018.

What will this all mean?

If the WRU takes over in the short term it could be searching for new long-term investors.

The union could consider taking over permanent ownership of the side but that is something it has attempted to avoid in the past, highlighted by the return of Dragons to private ownership in 2023.

It is set to be business as usual with Cardiff having four United Rugby Championship (URC) games left this season, which will be fulfilled with Matt Sherratt's side still having hopes of finishing in the top eight and qualifying for the play-offs.

Their next fixture is against Ospreys on Saturday, 19 April at the Principality Stadium. They are then scheduled to host Munster at the Arms Park six days later.

It is understood the plan is to honour contracts and the new signings who have been announced by Cardiff should join up with the squad in the summer.

Unlike football, there are understood to be no automatic points deduction from the URC if a team goes into administration.

Rugby finance issues

The state of rugby finances is under the microscope with London Irish, Wasps and Worcester having all gone out of business during the 2022-23 season, leaving the top flight of English rugby with only 10 teams.

In Wales in 2003, five professional regions were created from the club game before Celtic Warriors were disbanded in 2004.

In 2017, the WRU stepped in to be the majority stakeholder at Dragons following financial difficulties. The Newport-based side were eventually returned to private investment in 2023.

In March 2024, Cardiff announced a loss of £2.1m for the year ending June 2023, with the next set of accounts due in May 2025.

Both Ospreys and Scarlets have recently announced losses of more than £2m for the year ending June 2024.

The current budgets for the four Welsh professional sides is £4.5m. That is planned to rise to £5.1m and then to more than £6m in the coming seasons.