The Welsh Rugby Union has spelled out the “tough” economic state of the game in Wales – despite suggesting its financial position was “pretty good” just five months ago.

The governing body has announced a significant decline in its finances, saying it has posted an £18m loss for the financial year to June 2026 – compared to a £7.2m loss the previous year.

Financial boss Gavin Marshall admitted the figures were disappointing and came despite turnover rising £10m to £116.2m.

Just five months ago, new chief financial and operating officer Marshall claimed the WRU’s finances were in a “pretty good position”.

But it says that rising energy and staffing costs, combined with falling ticket sales and reduced fan spend, were to blame for the dramatic fall.

The union says it is already predicting a similar loss next year, and said the figures back up its case that four professional regions are no longer sustainable.

“We can’t go on like this,” said Marshall.

The financial performance of the WRU, on the back of the controversial decision to cut the number of regions from four to three, is sure to provoke dismay, frustration and even anger from clubs and fans.

“The numbers are tough and not where we want them to be, but it’s been a challenging year,” said Marshall.

“As an executive team we are accountable for these numbers, so we have to look at our performance and where we can do better.

“But we can only control certain things and it’s a tough world out there impacting all sport with the cost of living crisis affecting what people spend as well as our own costs.

“We should be aiming to break even but we’re quite some way off where we want to be. I’m ambitious and we need to grow our way out of that deficit but the gap, right now, is stark.”

The WRU insists Welsh rugby is “living beyond its means” and cannot go on sustaining such losses.

The official accounts for the past financial year are expected to be lodged with Companies House on Friday but have already been shared with clubs.

The WRU’s audited annual report for the 2023 financial year showed new profit and loss figures for the previous two years, with the loss in 2023 re-listed as £14m up from £4.9m – although the profit in 2022 now stood at £37.3m rather than £2.9m.

Since that re-audited positive 2022 figure, the financial situation has continued to decline.

When former WRU chair Richard Collier-Keywood and a new board took charge at the start of 2024, he admitted the finances were “a mess”.

In an interview with the BBC the following year he revealed the extent of the problem, saying that “in January 2024 the WRU had run out of money – we were up against our overdraft limit”.

The WRU had taken out an £18m Covid support loan from the Welsh government in 2022, for which it subsequently appealed for an improvement in terms.

But a new £55m debt-refinancing package agreed in January 2026 – via banks HSBC and Goldman Sachs – was designed to see the Welsh government loan and a separate commercial loan paid off.

In the past few years, the union has also paid out £1.9m to departing employees, as well as keeping Cardiff afloat since taking over the struggling region in April 2025.

The WRU will struggle to avoid the accusation from west Wales that the regions threatened with closure – Ospreys and Scarlets, who have been approached for comment – are paying the price for the WRU’s financial performance.

“We have a lot of costs, including the stadium [£26m], the national teams [£20m], interest on our loan [£3m], funding community rugby [£4m],” said Marshall.

“That leaves about £20m to invest in professional rugby but at the moment we’re funding £26m across the four clubs. From a financial perspective, we just can’t afford that.

“We need to grow revenue but also sensibly manage our costs, investments and distribution of funds.

“We could have as many clubs as you want but it’s how you fund those clubs, how competitive they can be with that funding and how much benefactor funding goes into the clubs. At the moment we’re not sustainable.”

The men’s national team is the biggest driving factor behind the WRU’s revenue, contributing almost half its income.

So it is clear that while a successful Wales boosts the coffers, a team on a record losing run, as Steve Tandy’s side were until March, sees income stall.

Empty seats for last year’s home Test against world champions South Africa and again in the Six Nations game against France reflected a declining appetite among fans who, on average, are also spending less when they do attend the Principality Stadium.

“We hosted seven men’s internationals compared with five the previous year but match income increased by only £2m,” said Marshall.

“This was challenging and reflected lower average ticket prices, some lower attendances and the global economic pressure on consumer spending.”

The WRU is now caught between encouraging more fans to buy tickets – broadening the price categories from three to six – and the need to maximise income from those key matches.

Adding fuel to the fire from west Wales is the WRU sustaining Cardiff’s £1.2m loss for the past financial year.

That figure is not startling given Ospreys and Scarlets both lost more the previous year – the most recent figures on record.

The union took over the failing region in April 2025 and while a deal with Ospreys owners Y11 Sport & Media later fell through, Marshall confirmed Cardiff will be put up for sale again, though not until the current shake-up is complete.

That could mean holding on to Cardiff until at least 2028.

“The strategy is not to own Cardiff but we decided that while we are in this restructure and level of uncertainty, it’s a tough environment to sell a club,” he said.

“When there’s certainty for Welsh rugby, that will enable us to find the right buyer and right value for the Cardiff.”

The WRU aims to increase the number and range of non-rugby events at the Principality Stadium.

While concerts only raise modest funds, they are seen as risk-free opportunities given promoters pay rent for the venue while the WRU earns from food and drink sales.

However, they face rising costs and increasing competition from other venues, which will include a new 16,500 music arena under construction in Cardiff Bay, while Kanye West – set for two nights at the stadium – was refused entry to the UK.

But football’s Community Shield returned to Cardiff in August while the stadium will host world heavyweight boxing between Tyson Fury and Anthony Joshua in December, before summer concerts by Andrea Bocelli and Sam Fender.

However, Marshall confirmed there are no immediate plans for the regional derby event Judgement Day to return to the stadium.

These latest figures will come under scrutiny from member clubs at next month’s annual general meeting (AGM).

Marshall also confirmed the WRU had received £9.6m for its stake in a portion of United Rugby Championship (URC) shares – shared by all five competing unions – sold to private equity firm CVC Capital Partners.

The one-off deal will mean less participation money each year from the league but the WRU insisted Cardiff, Dragons, Ospreys and Scarlets will get enough of the £9.6m to cover that reduction.

Meanwhile, the union remains committed to its investment in the community game and pointed to a profit made by the Parkgate Hotel it owns in Cardiff.

However, the WRU has already raised worrying concerns for the next financial year as it is already predicting an operating loss of £16m.

“Our responsibility is to build a financially stronger organisation capable of supporting the game at every level,” added Marshall.