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Welsh Rugby Union seeks £20m loan to cover Covid shortfall

The Principality Stadium in Cardiff, Wales during last year's Six Nations. The venue is currently in use as a field hospital. (Photo by Michael Steele/Getty Images)

The Welsh Rugby Union’s chairman Gareth Davies has said that the body is seeking a £20m ($25.3m/€22m) loan to help it deal with the impact of the Covid-19 pandemic.

The WRU is facing a significant shortfall in funding due to the outbreak. More than half of its expected annual revenue of £90m comes from international rugby matches and other events staged at the Principality Stadium in the Welsh capital of Cardiff, with almost the entire slate of events for 2020 having been wiped out due to lockdown measures put in place in the UK.

The WRU believes it is looking at losses of £50m if international rugby is unable to return to the venue this year. 

Davies’ comments follow the admission from WRU chief executive Martyn Philips last month that the union was likely to require financial support, though at the time he did not specify how much. 

It is likely that the Welsh government and World Rugby will be appealed for assistance. World Rugby has established a $100m (£80.4m/€92.2m) relief fund to offer support to struggling unions, though is unlikely to be able to cover the full £20m Davies says the WRU requires. 

A private bank loan or even a remortgaging of the Principality Stadium are other options, with Davies telling BBC Radio Cymru that the body is “still in talks to secure a loan, hoping to finalise something before the end of the month as we have bills to pay”. 

Philips also added that the majority of the loan would not go directly to the WRU itself but to the four Welsh regional sides – Cardiff Blues, Scarlets, Ospreys and Dragons– that play in the Pro14.

The Principality Stadium is currently being used as a field hospital to ease the burden on health services in the area, and British prime minister Boris Johnson last week outlined a £3bn package that would see the seven so-called ‘Nightingale hospitals’ remain in this role for the rest of the year.

Davies said that the WRU remains in discussions with the NHS about how long this arrangement might remain in place, and the WRU is reportedly in talks with three venues in London – Twickenham, the Tottenham Hotspur Stadium and the London Olympic Stadium – to host autumn internationals later this year, should the Principality not be an option by that time. 

WRU is not alone in feeling the financial effects of Covid. The Rugby Football Union, the WRU’s English counterpart, has outlined plans to cut up to a quarter of its workforce due to the pandemic, and its chief executive Bill Sweeney has said that it could take up to five years for the body to recover from the financial impact of Covid-19. Even if the autumn internationals go ahead, Sweeney has said that the RFU expects a revenue hit of £85m if fans are not allowed into the venues. 

The long-mooted investment of private equity firm CVC Capital Partners into the Six Nations is one potential source of fresh funding for the WRU, but the group has also made clear its reservations due to the pandemic, seeking to insert a “Covid-19 clause” into its contract which would allow it to withhold funding if next year’s event is unable to go ahead or is otherwise disrupted. 

CVC has been in talks over acquiring a 14-per-cent stake in the Six Nations for £300m (€331m/$378m) but the move has been  delayed because of the global crisis .