The deal replaces the UK government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) emergency loan secured in October 2020.
The CLBILS was used to mitigate the effects of the pandemic on professional gambling in Wales but, under the rules of the UK government scheme, was repayable over the maximum allowed three-year period – the new agreement effectively spreads repayments over 20 years.
The WRU secured the hugely important initial funding on behalf of the four professional regions of Wales at the height of the Covid-19 pandemic.*
A CLBILS loan of £18.0m was combined with further funding of £2.0m secured from World Rugby, making £20m available to the four regions.
The Professional Rugby Board (PRB) unanimously approved the initial loan and further agreed to distribute the funds according to the needs of each region. Cardiff Rugby received £5.0m, the Dragons £4.5m, the Ospreys £5.0m and the Scarlets £5.5m.
“The CLBILS arrangement was the right thing to do at the right time and allowed our professional game to survive the pandemic,” said WRU CEO Steve Phillips.
“The pandemic has had a catastrophic impact on the sports sector and it was vital at the time that we acted quickly to secure funding.
“We have been extremely grateful to the Welsh Government for their support throughout the pandemic and their significant help in creating much more manageable reimbursement conditions, as we seek parity for our regional teams with their peers.
“We must also extend our thanks to NatWest for their initial support in making the CLBILS loan and their pragmatism in helping to facilitate the refinancing.”
All CLBILS loans had a repayment term of three years and although the loan was transferred to the regions with the same terms, the WRU paid the quarterly installments directly while seeking to renegotiate more favorable and manageable terms for the four professional parties.
“Following the challenges of the previous two years, the Welsh Government has stepped in to provide the WRU with a long-term repayable loan of £18 million to help it refinance a short-term coronavirus loan it took out during the pandemic,” said Dawn Bowden, Deputy Minister for Arts and Sport.
“This financial support will help ensure the continued success of rugby and the regional game in Wales.”
The CLBILS has now been refinanced with a new loan from the Welsh Government and will be repayable in equal quarterly installments by 2040. The WRU has also negotiated a deferral of additional £2.0m funding from World Rugby.
This has allowed the full £20m loan to the regions to be extended to 20 years, so capital repayments will now be paid over 20 years, a significant improvement on the previous three-year term.
“There is no doubt that the support of the Welsh Government has helped the survival of professional gambling in Wales throughout the pandemic. We now have the opportunity to build for a new era,” said Nick Garcia, CEO of Ospreys Rugby.
“We have survived the global pandemic, but there is still a lot of hard work ahead for professional football in Wales and we know we need to work together to create the conditions in which we can both survive and succeed,” said said Simon Muderack, president of the Scarlets.
“The repayment terms for this funding are now greatly improved as we now look to build a better future for regional rugby in Wales,” said David Buttress, Chairman of the Dragons.
“We are hugely grateful to the Welsh Government for their support and to everyone involved in renegotiating the terms of the loan, the next step is to go beyond survival to succeed both on and off the pitch.” , added Alun Jones, chairman of Cardiff Rugby.
The new loan agreement is directly with the Welsh Government and allows for more flexibility, including extended tenure.