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Little is known about why the Ospreys’ owners want to buy Cardiff
Potential details of the Welsh Rugby Union’s impending deal with Y11 to buy Cardiff are emerging, despite the Ospreys owners’ silence on the matter continuing.
Y11 have not spoken publicly on their plans – although that could soon change given the intense criticism from Ospreys fans – after the WRU chose them as the preferred bidder to buy the Arms Park club. With the two parties now entering a period of exclusivity, the aim will be to strike a deal in the coming weeks that will pave the way towards the governing body achieving their goal of culling a team.
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Obviously, the move by the WRU to effectively end one professional club has been met with widespread dismay in Welsh regional rugby circles, with Ospreys and Cardiff fans being up in arms at the prospect of one set of owners taking over the other club.
Ospreys fans are understandably distraught at the prospect of their owners buying a rival club and bringing their future into serious doubt. Initial fan reactions have accused Y11 of betrayal but, as head coach Mark Jones said on Wednesday, we will only know if that is true once their intentions become clear.
As for Cardiff supporters, there are obvious questions over the motives of Y11 in terms of buying the Arms Park side.
For both fanbases, the hope might be that enough of an uproar could yet unsettle the deal. After all, nothing has been signed off just yet.
And there have been previous reports of mergers and deals falling through late in the day. A heads of terms was signed for the Ospreys and Scarlets to merge in 2019 before that was called off, while Y11 have previously been in talks with Cardiff that have gone nowhere.
However, any late reprieve this time around ultimately depends on whether Y11 and the WRU can weather whatever backlash comes their way.
And that comes down to why they are doing the deal, with it clearly suiting both parties.
For Y11, it appears to be a purely financial one.
Rugby has not been a healthy place for many financially, with sources suggesting that the money Y11 are losing per year in charge of the Ospreys is around £2.5m.
Sources have previously stated how rugby only accounts for about 10 per cent of Y11’s portfolio, questioning whether it’s worth the financial and logistical headache.
Despite that, those within the WRU have been at great pains to stress Y11’s commitment to Welsh rugby in the last year or so.
“Rugby clubs generally do not make money,” said WRU chair Richard Collier-Keywood at the Welsh Affairs Committee on Wednesday.
“So if I was a private investor, would I be thinking about investing in them? Yes, because I love rugby. The key is in that.
“We are trying with Y11 and Ospreys to create a different model going forward with that. The importance of all that is rugby clubs can be valued on their turnover.
“It’s very handy to have a private equity player in that market to understand that and help us on how best to create an environment over the next five to 10 years where you’re attracting investment for investment’s sake.”
Any deal for Cardiff – given the commercial possibilities and season ticket sales – is understood to offer an improvement to their finances on an annual basis – with Collier-Keywood’s comments providing some clues towards Y11’s next move in Welsh rugby.
As for the WRU, getting down to three clubs has been the modus operandi of the governing body of late, but it was the threat of an EGM that moved things back to the negotiating table.
Y11 had initially pulled away from talks after the WRU had asked for too much, with the Ospreys’ owners then believed to have been ready to join the Scarlets in legal action against the governing body.
Both west Wales clubs had been furious after the Dragons had signed the new Professional Rugby Agreement in the wake of the WRU’s takeover of Cardiff, with both frustrated that the WRU did not add specific assurances concerning their ownership of the capital club.
On Wednesday, WRU CEO Abi Tierney said those assurances concerned money from the WRU towards Cardiff that the two west Wales clubs did not want the Arms Park side to receive.
Sources close to Y11 said at the time that they felt things were progressing towards a more financially sustainable ecosystem, with the decision by the Dragons to sign the new PRA seen as a betrayal.
It’s understood that Y11 came back to the table following the threat of the EGM, amid concerns key figures within the governing body could be ousted.
Tierney and Collier-Keywood told MPs on Wednesday that they are hearing there is not sufficient support for the EGM yet.
If that is how we got here, where we go next remains unclear.
Ospreys CEO Lance Bradley told players on Tuesday that the Ospreys would be around for at least 18 months, with the Professional Rugby Agreement that they are signed up to expiring in 2027.
Things could move quicker than that though, with it unclear how ownership will look if and when a deal for Y11 to take over Cardiff is completed.
Some have suggested that an ownership swap could be an option, with the WRU taking over the Ospreys until the United Rugby Championship find a replacement club.
The alternative is keeping hold of both ahead of a merger of sorts.
On Wednesday, Collier-Keywood stated that Y11 “still have a lot of local passion” for Swansea. It was a comment that, unsurprisingly, drew a lot of derision.
Sources do suggest that Y11 are keen to not give up on the Ospreys branding easily – with some believing a ‘superclub’ could be more likely than simply a Y11-owned Cardiff playing at the Arms Park and any trace of the Ospreys disappearing.
There would be several logistical hurdles to jump if that was the chosen route, though. Cardiff Athletic Club, the owners of the Arms Park, would become an issue were the plan for a team that wasn’t simply a Cardiff brand to play the majority of games at the famous stadium.
A meeting between Swansea Council, Collier-Keywood and Bradley on Thursday morning could provide some clarity – with the redevelopment of St Helen’s to be discussed.
Any work on the ground is only likely to go ahead if there are reassurances on what rugby will be played there in the future.
What constitutes a fair amount – be it women’s rugby or a handful of professional games – remains to be seen.
