Gareth Davies, chairman of the Welsh Rugby Union, has urged grass-roots clubs in Wales to stop paying players and return to full amateur status following a national survey of their financial status to assess the impact of the Covid-19 lockdown.
The WRU are currently analysing the results of the survey, which has been completed by over 200 of the 300 community clubs in Wales.
Davies told Telegraph Sport that he had been encouraged that the majority of the clubs would remain in a “reasonably healthy state” for the next six months but said the grass-roots game needed to embrace a new model – excluding payment to players – to secure its long-term future.
Davies believes the unprecedented challenges now facing the sport should force clubs below the Premiership in Wales to radically rethink their business models.
“At the top end of the game we are all saying this is a great opportunity to recalibrate the global calendar, but it is also a great opportunity for the community game to go back to its roots,” said Davies. “Grass-roots clubs shouldn’t be splashing cash.
“This (pandemic) is something that is going to rebalance everything. We are trying to look at it in a positive way. We want to keep as many people as possible in the game. Let’s build a model that will give us a better chance of doing that.
“Do we really want to be paying players when the purpose of the community is not to bung some money into a player’s pocket?”
A review of payment to players at grass-roots clubs in England is currently being undertaken by the Rugby Football Union, with a growing sense that a return to amateur status is necessary because of the financial impact of the lockdown.
The WRU currently asks clubs to sign a “declaration of truth” that they do pay players in order to receive grants from the governing body, which distributes almost £12 million per year to the community game.
Some clubs choose not to sign and do not receive funding, which allows them to pay players but there is a suspicion the regulation is flouted by others, with grants spent on players rather than improving facilities.
“I think now is a time for a bit of honesty and perhaps if we can all get into this together, clubs can back off paying players without anyone losing face," Davies added.
“It is the right thing to do. I can’t fathom that paying local guys in local villages is the right thing to do. All it is doing is taking much needed funds away from creating a mini-rugby team, or a girls’ team or taking them on a tour every year.”
Analysis of the survey will be presented to the WRU board on June 10, and it is hoped that it will instigate further discussions with the clubs. The WRU made hardship payments of £1,000 to each club at the start of the lockdown, while it has been issuing weekly status updates as well as helping clubs access funding and reduce costs. Further financial support may be possible but it is expected to be accompanied by change.
“We did [the survey] for a positive reason,” Davies added. “It wasn’t snooping into the clubs’ accounts but we asked them to be honest and answer how sustainable their business is.
“What emerges from that is that the majority of the clubs having taken advantage of union funding and government support, the majority are in a reasonably healthy state in the sense that they have reserves running in about six months in advance.
“We will now look at whether we have further funding that we can distribute as part of the bigger picture. But I also think clubs then have to realise that they have to do things for themselves as well – accessing various economic resilience funds, business rate relief funds.
“We are going to want to support those clubs who have been proactive and contributing towards their sustainability. We are all in this together and the underlying fact is that it gives us an opportunity to work with all the clubs to try to agree a way forward as to what is going to make us financially stable going forwards.
“Not only are they rugby clubs, but in Wales a lot of our clubs, especially those outside of the cities are genuinely the centres of communities. People congregate around our community rugby clubs so losing a club in a small village community in north or west Wales for example is probably far more serious than losing the local bank or post office."
Meanwhile, Hong Kong-based sports marketing group Y11 Sports & Media has acquired a 75.1 per cent stake in Ospreys in a multi-million pound deal. Ospreys chairman Robert Davies will continue in his role and, along with other existing shareholders, retain a 24.9 per cent stake, while Y11 chief executive James Davies-Yandle and his business partner Donald Tang have joined the Ospreys’ board.
A new holding company, Ospreys International Group, has been established and proceeds from the deal will be reinvested in the club.