Newport Gwent Dragons latest Welsh region to post financial losses (according to the Western Fail

Newport Gwent Dragons are the latest Welsh rugby region to post worrying losses in their annual accounts.

Recently published accounts reveal the Dragons were nearly £2.4 million in the red in the year ending May 2011, with the region's auditor saying he is concerned about the future of the team.

The region, which is part owned by the Welsh Rugby Union, made a net loss of more than £270,000 during that period.

The independent auditor who examined the Dragons' accounts says they reveal "a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".

The news comes just weeks after Cardiff Blues' accounts revealed losses of £.2.3 million for the year ending May last year, while the Ospreys faced a winding up order from HMRC over an unpaid tax bill in May, although the region insisted the issue was being dealt with amicably.

Meanwhile, Scarlets chief executive Mark Davies revealed details of a revival plan at Parc y Scarlets after their accounts showed a £1.8 million loss for the year ending June, 2011. The auditor of those accounts also warned the figures suggested there was "significant doubt over the company's ability to continue as a going concern".

All four Welsh regions have agreed a salary cap of £3.5 million from next season to stem the tide of financial losses, while a major review and consultation process between the regions and the WRU is still ongoing.

Dragons chief executive Chris Brown said of the accounts: "They are disappointing and they are losses again.

"We're not terribly happy with that but we have been working on that since then.

"We believe we can generate sufficient funds, together with the money we receive towards the players, to have a break even situation," he said.

"The key to what I'm trying to do is looking for a more sustainable future without such reliance on benefactors.

"It's of concern so far into a deep recession that rugby clubs and other sports clubs rely on benefactors to keep them going.

"It's a lot of money. I talked before about the new stand and it has been key in terms of getting hospitality and catering money coming into the business, and certainly we've been successful with that since the stand was completed," he told the BBC

Read More http://www.walesonline.co.uk/rugbynation/rugby-news/2012/07/09/newport-gwent-dragons-latest-welsh-region-to-post-financial-losses-91466-31355110/#ixzz207aPHUHw



Don't know much about the Dragons finances, but considering the Fail wrote a similar (but even more gloomy) article about the Scarlets - which it alludes to with the comment about the Scarlets going bust. Despite the fact that there is no basis for those comments, then I imagine this article is similarily rubbish. I'm also not suprised that the Dragons are in the red when you consider they've just had a shiny new stand built, but since those finances (if accurate) were produced the Dragons have significantly decreased their wage bill.

But what does everyone else think of the above?

Loss is just a figure that only means something when comparing it to a simallar figure.

As deprecaition (reducing the value) of you assets is part of a company expense it means little.

The main thing is how is their cashflow as that will tell us more about their situation.

If anything does happen financially wise to the regions expect the WRU to step in and take them on but let the company and it's losses go, akin to Rangers. As the new companies would not have to worry about a place in the Rabo they would be fine.

The fail does like to drag down the regions or is it just always up and down on welsh rugby depending on the last game

True True, Loss & Profit have slightly different meanings on balance sheets/Profit & Loss sheets.

The reason I put up the topic though was because the Western Fail have a history of publishing incorrect figures, or figures taken from a few years ago and passing them off as current figures. They also don't take into account any other circumstances, such as investing in a new stand. As you say the Fail does constantly has a go at the regions - with Wales it's very up and down depending on results, the player or the coach in question.

I doubt the WRU would step in, they already own half of the Dragons but there was talk of having a development/feeder region to the other 3, so I'd imagine the WRU would rather watch a region go down than step in.

They (dragons) recently made cutbacks in the hospitality area, so they are definitely in the red. Not sure how extreme though. Also, all their new signings seem cheap.

Doesnt the Welsh press ever have anything positive to say about the regions?

Peter Seabiscuit Wheeler wrote:Doesnt the Welsh press ever have anything positive to say about the regions?

NEVER!!!

Only after they win in europe.

On the financial side surely the regions for the WRU would be like having 3 ulsters and a connacht. surely the WRU could run them or atleast one of them without it being to much.

Afterall the WRU has the fastest growing profits.

Smirnoffpriest wrote:

Peter Seabiscuit Wheeler wrote:Doesnt the Welsh press ever have anything positive to say about the regions?

NEVER!!!

Thats not true, they do like to talk the regions up leading to an impossible task, so they can slag them off even more after.

Brendan - looking at the debt of the regions and the profits of the WRU theoretically they could run two regions and still be paying off their own debt. (I remember seeing the figures on w who is running at loss Jeff/Rabo/T14 thread somewhere).

I am sure pople have discussed this but does a financail backer from your old compeditior eg sugar daddy from Newport not lead to a disallision witht eh gwent faithful that is slowly being rebuilt. Same goes for Os and blues. Would a WRU owned region speed up the trust

Brendan wrote:I am sure pople have discussed this but does a financail backer from your old compeditior eg sugar daddy from Newport not lead to a disallision witht eh gwent faithful that is slowly being rebuilt. Same goes for Os and blues. Would a WRU owned region speed up the trust

I suppose it would depend on how the owner/WRU (WRU in particular) ran the region - isn't Cuddy the old Neath owner?

If the WRU centralise contracts wouldn't they be part owning the Regions then?

I think they'd just 'own' some of the players - or at least part own them

no, only the players. They wouldn't be able to do anything other then demand players play no more then x number of games.

that big report that was due out, did anything come from that.

It's another non story from The Fail.

Welsh region is poor shocker ! It's old news, so a complete non story.

The Dragons seem to be working hard to cut back on spending

I figured as much, but thought I'd post as it would hopefully lead to some interesting discussions and people could post why the Fail is yet again talking out of it's rearend.

Where is the fail based

Western Mail is based in Cardiff

See always thought is was west wales and not just wales thought that would be a given

Also I should point out that the Fails main readership is Cardiff and it's surrounding areas, it has a readership of around 200,000 - I know of no-one in Llanelli that reads it, and in North Wales they generally read the Daily Post, Swansea/Port Talbot/Carmarthenshire is the Evening Post.

As such it's very Cardiff centric and a very poor excuse for a national paper (ha it's more the Cardiff echo than anything)

Never believe anything in the Western Fail

I not sure why some are having a go at the press for the problems of the regions (clubs), the Wales TV News at 6 reported the Dragons accounts as in the WM article. What I did not quite get, they stated the figures were for the "playing" side of the business, what is the other business and what are the accounts for that business? Is it Newport RFC that own the ground etc or is it the management side of the Dragons and what part does the WRU own 50% of?

The debts of the Dragons if it is the total (£2.4M), are much better than the other regions, the other regions losses this year are higher than the Dragons total debts.[u]

Haven't seen their accounts, but as long as their EBITDA is healthy that will keep their lenders happy short term. Worries are if they're making losses at the bottom line that will shrink their balance sheet and make securing future funding more problematic. Which leads to the big concern that their auditors chose to qualify the accounts - that's a big concern.

Change name to Gwent Dragons Bank and all will be well.Mr Diamond told me!!!!!!!

There is only one way to improve their cash-flow. Go and support them at Dave. Buy the drinks, eat the food, wear the jesrsey with pride, take a mate. Convince him/her to buy a jersey and get them into it. Be there.

Im a Dragon fan for next season. Rugby is bigger than a province or a region. I love the way their fans get behind their team at games. They just need more of em now. More than ever before.

Im paying a visit when Leinster go there.

Creid!

Fuss over nothing. For some reason trading losses, massive debts and (Ospreys aside) dire performances at the regions 'results' in a competitive test team, which is all that really matters.

After nearly two decades of pro rugby - we've found the new Welsh Way.

If it ain't broke etc...

Cas,
Do you actually believe that man? Feic de regions for the Country's sake?

It doesnt work that way. Not in the long term.

If I have misunderstood, please illucidate.

Cas with Gibson on this one. If your pro game goes bust how can that work for your national team?

Morgannwg wrote:They (dragons) recently made cutbacks in the hospitality area, so they are definitely in the red. Not sure how extreme though. Also, all their new signings seem cheap.

Why would the Dragons cut back in the hospitality area? The new Bisley stand & the associated debt was built to expand the match & non matchday experience - Please explain your comment & preferably your source?

Gibson wrote:Cas,
Do you actually believe that man? Feic de regions for the Country's sake?

It doesnt work that way. Not in the long term.

If I have misunderstood, please illucidate.

I used to think strong clubs/regions were essential to support the national team too, but the evidence (in Wales at least) is that it doesn't matter. There's no logic to this, but the facts are there.

And, 'regional rugby' has had ten years to sort itself out - but it's a fundamentally flawed structure, a lame duck - and will never be financially viable. I'm not saying 'feic de regions', I'd love to see them do well, I'm saying why worry about it when the test team is the important thing.

Smirnoffpriest wrote:Also I should point out that the Fails main readership is Cardiff and it's surrounding areas, it has a readership of around 200,000 - I know of no-one in Llanelli that reads it, and in North Wales they generally read the Daily Post, Swansea/Port Talbot/Carmarthenshire is the Evening Post.

As such it's very Cardiff centric and a very poor excuse for a national paper (ha it's more the Cardiff echo than anything)

To be honest in Pembs if you don't want to read the english press, the fail is the only other alternative (we have once a week papers and thats it).

Cast - the national team may not need the regions to be lifting all the trophies they are entering, however the national team does need the regions to exist. Since regionalism we have picked up 3 Grand Slams, so to lose any of the regions would be a serious blow to the national side.

dragon999 wrote:

Morgannwg wrote:They (dragons) recently made cutbacks in the hospitality area, so they are definitely in the red. Not sure how extreme though. Also, all their new signings seem cheap.

Why would the Dragons cut back in the hospitality area? The new Bisley stand & the associated debt was built to expand the match & non matchday experience - Please explain your comment & preferably your source?

Yeah, I don't understand that one either. The new stand was always a way of making money from corporate groups and outside of rugby too.

I'm getting a season ticket for my birthday, it's only for the North Terrace but living away from the mighty, mighty port I wont get to see them too often.

Despite some of our 'big' players leaving I'm quite optomistic for the next season, good young talent has been signed up

ScarletSpiderman wrote:Cast - the national team may not need the regions to be lifting all the trophies they are entering, however the national team does need the regions to exist. Since regionalism we have picked up 3 Grand Slams, so to lose any of the regions would be a serious blow to the national side.

I think we could afford to leave one fold, and concentrate resources into three teams. Better to have three stronger regions than 3 irrelevant and 1 decent one, if you do support the theory that better regions makes for a better test team.

dragon999 wrote:

Morgannwg wrote:They (dragons) recently made cutbacks in the hospitality area, so they are definitely in the red. Not sure how extreme though. Also, all their new signings seem cheap.

Why would the Dragons cut back in the hospitality area? The new Bisley stand & the associated debt was built to expand the match & non matchday experience - Please explain your comment & preferably your source?

Because the Dragons are a business that needed to reduce outgoings (like everyone else). I work there. The guys who were running the hospitality were let go (apparently under-qualified for the job aswell). The job was given to the kitchen manager, who now oversees it all. They don't have much going on in the stand during the summer as far as I know, with the rugby season and rugby presentations finished. There will probably be a few wedding dinners here and there.

I would have thought they'd be pushing to do more events and catering work to increase profit in the end of season break

Weird

And now, the end is here
And so I face the final curtain
My friend, I'll say it clear
I'll state my case, of which I'm certain
I've lived a life that's full
I traveled each and ev'ry highway
And more, much more than this, I did it my way

munkian wrote:I would have thought they'd be pushing to do more events and catering work to increase profit in the end of season break

Weird

They'll be pushing alright. There's less staff there atm too. The people let go had previously worked at Parc-y-Scarlets, not sure what the situation was there. All I know is the wages down Parc-y are higher than that at RP.

It's wrong to think that the national team have been doing well whilst the regions have been broke (Wales would be nowhere without pro regions). The only reason the regions have survived is because a few individuals continue to throw their own money in every season. It's a model that has worked because of their generosity but is it a long term solution? I don't think so.

It's very disappointing that 4 professional rugby teams can't operate in Wales without hand outs. I agree with Gibson - the solution is to get behind your region, buy a season ticket, spend some money and support professional rubgy.

+1

offload wrote:It's very disappointing that 4 professional rugby teams can't operate in Wales without hand outs. I agree with Gibson - the solution is to get behind your region, buy a season ticket, spend some money and support professional rubgy.

I think the major problem is that rugby is the national sport of Wales, however football id the club sport of Wales, if that makes any sense. We need to convert the 'international' fans into regional fans. There are about 50-60 people where I work who all seem to follow the internationals, and probably about 20-30 of those attend 1 or 2 internationals a year. However I am the only one who is a regional season ticket holder, and there are about 2 others who attend a game or two a season. The conversation on a Monday morning tends to be more about who fell over and played dead playing for Chelsea or Arsenal than anything to do with rugby.

What the WRU need to do is stop catering for those who don't really follow rugby and turn up to wear silly cowboy hats and get peed, and put more emphasis on getting regions attendances up.

ScarletSpiderman wrote:

offload wrote:It's very disappointing that 4 professional rugby teams can't operate in Wales without hand outs. I agree with Gibson - the solution is to get behind your region, buy a season ticket, spend some money and support professional rubgy.

I think the major problem is that rugby is the national sport of Wales, however football id the club sport of Wales, if that makes any sense. We need to convert the 'international' fans into regional fans. There are about 50-60 people where I work who all seem to follow the internationals, and probably about 20-30 of those attend 1 or 2 internationals a year. However I am the only one who is a regional season ticket holder, and there are about 2 others who attend a game or two a season. The conversation on a Monday morning tends to be more about who fell over and played dead playing for Chelsea or Arsenal than anything to do with rugby.

What the WRU need to do is stop catering for those who don't really follow rugby and turn up to wear silly cowboy hats and get peed, and put more emphasis on getting regions attendances up.

I thought season ticket sales were up across the board for the four regions, heck there is a thread on this very forum saying the Ospreys have shifted over 8000 and rising. Something must be going right if they have sold that much. For once I would like to see a little more optimism in Wales instead of all doom and gloom, what is wrong with Casaterlli he seems to be on a permanent downer when it come to Welsh rugby.CHEER UP MUN !!!! I am sure we will see massive improvements next season.

Just read in the Gus Dragons seasontickets up 80% on this time last year.
These were comments made after accounts up to May 2011 a lot has changed since then Newport County are now paying rent and the Dragons get 90 odd % of beer and food takings on their match days too.
I think this is a bit of a smoke screen as the bbc web site states the Blues lost £2.3mil Dragons £272,000 Ospreys £1.8mil Scarlets £1.3MIL For the same period, take the money for the new stand out of the £2.4MIL owed by the Dragons (which the club states measures are in place to pay it off over the next 20 years) and this is complete non story

LordDowlais wrote:

ScarletSpiderman wrote:

offload wrote:It's very disappointing that 4 professional rugby teams can't operate in Wales without hand outs. I agree with Gibson - the solution is to get behind your region, buy a season ticket, spend some money and support professional rubgy.

I think the major problem is that rugby is the national sport of Wales, however football id the club sport of Wales, if that makes any sense. We need to convert the 'international' fans into regional fans. There are about 50-60 people where I work who all seem to follow the internationals, and probably about 20-30 of those attend 1 or 2 internationals a year. However I am the only one who is a regional season ticket holder, and there are about 2 others who attend a game or two a season. The conversation on a Monday morning tends to be more about who fell over and played dead playing for Chelsea or Arsenal than anything to do with rugby.

What the WRU need to do is stop catering for those who don't really follow rugby and turn up to wear silly cowboy hats and get peed, and put more emphasis on getting regions attendances up.

I thought season ticket sales were up across the board for the four regions, heck there is a thread on this very forum saying the Ospreys have shifted over 8000 and rising. Something must be going right if they have sold that much. For once I would like to see a little more optimism in Wales instead of all doom and gloom, what is wrong with Casaterlli he seems to be on a permanent downer when it come to Welsh rugby.CHEER UP MUN !!!! I am sure we will see massive improvements next season.

Ospreys probably haven't sold 8000, but that many season ticket holders through the gate isn't a bad thing ( if the freebie guys do attend).

I have always said it, that people need to attend games to make things work better. I can't be bothered with people who nail their colours to a certain mast and then won't attend matches. As an example, you see a few Ospreys shirted folk cutting around the Risca area who never go to the Liberty. Point in that really? There's too much of a tv culture when it comes to watching the Regions too, though I am not proposing less coverage as it's a good source of revenue. I know people have genuine reasons to not attend sometimes, but there's plenty of people that simply don't try to go and back their chosen region.

It's a double edged sword.

For every person who go's to the average rabo game there are probably 10 or so who 'support' the club, but don't pay that much attention to games etc...

Clubs have to do more to attract fans IMO too.

I've avoided the CCS for seasons now, with about 15 people or so who claimed to be doing the same, yet now the blues have moved home only 3 of us are season ticket holders. The back half of the last season did nothing to encourage fans, players leaving regions all over the country are not helping either.

It's simple, downgrade you playing staff = downgrading of performance = downgrading of club status = downgrading crowd size = downgrading of atmosphere = downgrading of crowd size etc etc...

Radical actions must be taken all over wales to reignite interest in the club games, and nothing sparks excitement like local derby! Club rugby has to be club rugby, regional rugby has all but failed us.

I propose a 12 team prem with the 'regions' making an appearance come HC time!

So you're suggesting playing Semi-pro rugby all season until a few weeks of HEC and International rugby comes around?

Smirnoffpriest wrote:So you're suggesting playing Semi-pro rugby all season until a few weeks of HEC and International rugby comes around?

No you make the 12 teams fully pro and drag the level up a bit by spreading the players who are currently "regional only" amongst them. There would be greater sponsorship, TV money, and fan interest than there is in the current Welsh Premiership.

However isnt this exactly the set up that Ireland got rid of at exactly the time their "rise to power" began?

But where would you get the money to fund 12 fully professional teams? and how would diluting the standard of the competition the players play in (ie instead of having the cream of the Welsh internationals playing against Irish, Scottish & Italian internationals while fighting other Welsh internationals for a place in the team, you'll have Welsh ints getting into the team every week while playing against/with current semi-pros)

12 pro teams seems a bit racidal when we are struggling to keep 4 afloat. I still don't see why some people think going back to the old teams will be better off. It will be worse than it is now, that includes the attendance figures.

I find myself totally agreeing with Morgannwg for once. 12 pro/semi pro teams, as nice an idea as it is, would be a shambles.

3 is perfect, cut one of the peripheral ones, Scarlets or Dragons, doesn't matter much which one, and the remaining three become proper regions representing West, South and East.

Make a genuine effort with the North, as a long term possibility for re-establishing a 4th region, and keep costs down by letting the older players go to England or France for 'big money'.

Such a simple businessplan - really don't see what all the fuss is about.