On March 26, it was decided that Welsh rugby would be going down a new path by agreeing to radical proposals that will change the way the sport is governed for the long-term future.
This followed an appalling few months for the WRU, with accusations of a “toxic culture” across the federation including institutional sexism, misogyny, and racism.
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The WRU has also recently been involved in a contract dispute with players which included the men’s team threatening to strike and not play in their Six Nations game against England, the country’s biggest annual sporting fixture.
The EGM decision allows the WRU to finally modernize and catch up after years of governance failings.
The union should be looking to replicate the success of The Irish Rugby Football Union (IRFU) which is currently the front-runner in the northern hemisphere concerning player development and success on the field with the four provincial teams and especially the men’s national team which has become the number one ranked international side in the world.
The decision by the member clubs halted the disastrous prospect of many WRU commercial partners walking away from their sponsorship deals. This included the Principality Building Society which has a five-year deal with the WRU worth $3 million annually for naming rights to Wales’ national stadium.
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By GlobalDataPrincipality Building Society voiced huge concerns as soon as the toxic culture allegations were made about the WRU and demanded the federation take instant and convincing action.
The company’s chief customer officer Vicky Wales stated that “the allegations in the emerging BBC investigation are extremely concerning and we would expect the WRU to take the immediate and decisive action required to remove any discriminatory and bullying behaviors and to uphold the inclusive values that we should all live by.”
It cannot be overstated how imperative it was that the new EGM proposal was approved. Withdrawal of the federation’s sponsors would likely have been the final straw in the demise of the WRU, as the federation would have lost in the region of $24 million in sponsorship money, funds it could not afford to lose if it was going to continue operating.
In total, the WRU had 31 commercial partnerships that could have been terminated if the EGM proposal was not passed. GlobalData estimates that the governing body’s portfolio is worth a total of $39.08 million, including 10 deals worth over $1 million annually with brands such as Macron, Cazoo, Fanatics, and the aforementioned Principality Building Society.
Sportswear brand Macron began partnering with the WRU in 2020, replacing Under Armour as Welsh rugby’s kit supplier. The deal is estimated to be worth a total of $38.63 million across its seven-year timespan.
Since 2021, Cazoo has been serving as Wales’ primary shirt sponsor. The online car retailer took over from Admiral Insurance and has a deal worth $5 million annually, which will expire at the end of this year.
Despite the turbulence at the WRU, so far in 2023 the union has agreed nine deals, the most annually lucrative being the five-year renewal with soft drinks company Britvic to continue to serve as an official supplier, which GlobalData estimates is worth $4 million in total.
Online sports retailer Fanatics in 2018 agreed a long-term 10-year deal with the union receiving exclusive rights to operate the redesigned flagship Welsh Rugby store in Cardiff, existing concourse units at the Principality Stadium, and the official online store. GlobalData estimates the deal is worth $4 million annually across the decade-long period of the agreement.
Lastly, the WRU’s long-term partner Admiral announced in 2021 that it would fulfill a four-year deal to serve as the union’s title sponsor of the Welsh national leagues. The deal in total is estimated to be worth $6.66 million across its four-year duration.
The WRU has now chosen a new and modern long-term approach which will include developing a new diverse board with expert knowledge that can put the sporting organization back on track to produce a turnover of almost $125 million a year.
This creates a huge opportunity for the WRU to attract new commercial partners and provide highly needed funds to Welsh rugby which can be distributed to invest more into grassroots and women’s rugby.
If the WRU proves it can operate a successful, profitable, and diverse business, this should subsequently reduce the sponsorship income gap between the WRU and England’s Rugby Football Union (RFU), the most lucrative British rugby federation in terms of sponsorship income.
The RFU has secured multi-million-dollar partnerships with major brands that include O2, Umbro, and British Airways. GlobalData estimates English Rugby’s most annually lucrative current deal being the five-year agreement with O2 which is serving as the principal shirt sponsor for the RFU.
With the Rugby World Cup taking place this year in France, it is essential that the WRU can prove to potential new sponsors that it has made the correct and appropriate changes across the organization and put itself on the right path to being a leading rugby federation to partner with for one of the biggest events in sport.
Despite the men’s national team having performed poorly since early 2022, the women’s team has recently shown some very positive progression on the back of the WRU offering a further 25 new full-time professional contracts to Wales’ female rugby players.
The WRU will be hoping on-field results continue to improve for the women’s team especially against leading women’s rugby nations such as England, France, and New Zealand as this will be pivotal in attracting new brands to partner with the Welsh women’s team.
The WRU must ensure it keeps investing in the women’s game. Women’s sport continues to grow in popularity every year and is rapidly attracting brands looking to increase their sports sponsorship portfolios. Commercially, women’s sport is showing huge potential for growth.
For all Welsh rugby supporters, March 26, 2023, will hopefully be remembered as a historic day when the federation made the right choice to modernize and create good governance.
With the sport of rugby union in limbo financially, it is critical that the WRU becomes an appealing proposition for brands seeking stable long-term sports sponsorship investment.
For the WRU’s long-term development, the size and value of its sponsorship portfolio will be crucial to generate the finances and infrastructure for the men’s and women’s national teams to succeed on the international stage.
Finally, a much-needed cash injection into Welsh rugby will help the federation develop its player pathway so that youngsters have the best possible chance to develop and become the next stars of Welsh rugby.
Image: David Rogers/Getty Images
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