Talks held over potential merger between two Welsh rugby sides

Exploratory talks about a possible merger between the Welsh regions of Cardiff and Ospreys have taken place as British rugby continues to grapple with financial difficulties.

The English Gallagher Premiership has already seen three of its teams disappear this season. Worcester, Wasps and London Irish all disappeared after financial problems.

Welsh rugby is also experiencing its fair share of economic problems after a tumultuous season, both on and off the pitch. Wales currently has four professional sides – Dragons, Cardiff, Ospreys and Scarlets – and they all signed a new six-year deal with the Welsh Rugby Union earlier this year on a status quo basis.

However, MailSport understands that there are clauses in the agreement for Wales to work with three teams and not four in case one runs into trouble.

That’s why both Cardiff and the Ospreys have been in talks.

Ospreys (in black) also held talks earlier this year about a merger with the English Ealing

A possible merger between the Ospreys and England Championship side Ealing was also discussed earlier this year.

After months of delays, three regions – Cardiff, Ospreys and Scarlets – have started receiving much-needed centralized funding from the WRU as part of the new agreement.

The first part of that funding is retroactive from the 2021/22 season.

But the longer-term financial outlook remains bleak and so powerbrokers at Cardiff and Ospreys have discussed a possible merger in the future.

Welsh Rugby’s Professional Rugby Board, made up of WRU and regional representatives, has said it has not been approached by any club to merge.

Cardiff, who finished the 2022/23 season as the top team in Wales, were left vulnerable at the end of March when former chairman and long-term financier Peter Thomas lost his battle with cancer. Thomas made arrangements in his will to continue subsidizing Cardiff through his estate for the next four years.

But Cardiff’s hierarchy admitted after his death that the club was for sale.

Any possible deal between Cardiff and the owners of the Ospreys – Asia-based Y11 Sport & Media – would likely see Y11 take control of the capital side stake belonging to the Thomas family. Y11 also has a stake in the New Zealand Super Rugby franchise Hurricanes and is looking for more opportunities in the global rugby market.

Worcester Warriors, Wasps and London Irish all disappeared this season due to financial problems

Y11 is backed by Navis Capital – a leading financial institution with $5 billion in assets under capital. They have also previously looked at involvement with South African side Stormers.

There is no guarantee that a merger between Cardiff and Ospreys will happen, but it is a path being explored by the respective parties.

The WRU has previously stated that it is committed to funding four regions.

But in 2019, the governing body came close to striking a deal that would see the Ospreys merge with Llanelli-based Scarlets as part of ‘Project Reset’.

That deal fell through after a tidal wave of anger erupted over the proposal.

This time, talks on two possible regions to merge are at an early stage, but come amid a landscape of much worse financial conditions than four years ago.

The four regions of Wales have been struggling financially since they were ordered to repay a £20 million loan they took from the WRU through the Welsh Government.

The loan was necessary for the regions to survive the Covid-19 pandemic.

For the start of the 2023-2024 season, each of the four sides has a budget of just over £5 million, with a budget of £4.5 million for the next campaign.

Simply put, the lack of money in Welsh rugby means players’ salaries and the size of the regional teams are being reduced, and the chances of success on the pitch are slim.

The four regions of Wales have struggled since having to repay a £20 million loan they were awarded through the Welsh Government from the Welsh Rugby Union

As a result, there has already been an exodus of top Welsh talent abroad.

Many in Welsh rugby believe there simply isn’t enough money to fund four competitive regions. There is also uncertainty with the Dragons, who have one week left to meet a deadline imposed by the PRB to take the region currently owned by the governing body into private ownership.

The reason the Dragons have yet to receive their first tranche of central funding is because they have not yet met their private property condition. If they fail to meet their deadline by the end of the month, they could cease to exist, although there is confidence that a deal will be struck.

Should a merger take place between Cardiff and Ospreys – and there is certainly opposition to it – Welsh rugby would have to pay fines to both United Rugby Championship and European rugby. That’s because the WRU receives an estimated £9 million from those two organizations as it supplies four teams to the premier league nationally and in Europe.

MailSport understands that the initial proposals for a merger between Cardiff and Ospreys would involve the team playing at Cardiff Arms Park and the team becoming known as Cardiff Ospreys.

The Ospreys do not have their own ground and currently play at Swansea.Com Stadium, the home of Championship football club Swansea City. Their average ports are less than 5,000.

Should a merger between Cardiff and Ospreys happen, it would mark the most seismic change in Welsh regional rugby since the number of the country’s professional teams went from five to four when the Celtic Warriors were disbanded in 2004 after just one season.

Rugby in Wales is beset by problems and controversies, both on and off the pitch

It would also come at the end of a campaign in which Welsh rugby has been dogged by trouble and controversy both on and off the pitch. In the past 12 months, the WRU has been rocked by a sexism and misogyny scandal that saw the former CEO resign, while Wayne Pivac was replaced as head coach of the men’s national by a returning Warren Gatland.

The Wales players also threatened to strike ahead of the Six Nations match with England amid financial and contractual chaos leading to a delay in contract offers.

A possible amalgamation of the Cardiff and Ospreys selections would effectively create Wales’ most powerful domestic side.

But it would also cast doubt on the future of many players.

There is also the question of who will coach the team. Cardiff boss Dai Young is currently suspended while he is being investigated over claims his colleagues have made against him.

Toby Booth is the current Ospreys coach.

The best players from both teams are currently part of Wales’ training camp ahead of the World Cup and more regional uncertainty is sure to be a distraction ahead of the tournament in France.

Players from the Ospreys not involved with Wales have begun to return to pre-season training, but Cardiff’s official preparations for the 2023/24 season have been postponed due to uncertainty over Young’s future.