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Report claims four regional sides may be too many for a country of Wales' size

A damning report into Welsh regional rugby has questioned whether one or more of the four composite teams will survive amid the present financial downturn, and has criticised "poor management" at some of the organisations, most of whom are struggling with falling attendances and revenue, and are underperforming in the RaboDirect Pro12 competition.

Accountants, PriceWaterhouse-Coopers, assessed the financial situation of the four districts – Cardiff Blues, Newport-Gwent Dragons, Ospreys and Scarlets – up to April of this year, and highlighted a range of options, including disbanding these sides and handing back power to the clubs. That option was dismissed, in favour of the report's main recommendation of greater collaboration between the Welsh Rugby Union and the regions, which would be "enforced" by a new management board. But there is no guarantee that this will halt the malaise.

The news might come as a surprise, considering that the Principality have won three grand slams since 2005, and surged to the third of these in the most recent RBS 6 Nations. That success has not been replicated at regional level, though, where none of the Welsh sides have won the Heineken Cup, and have largely been superseded by their Irish counterparts in recent seasons.

Part of the reason for the decline lies in the lack of integrated management in one of the sport's heartlands. Despite rising income for the WRU, the regions' annual funding gap rose from £2m in 2008 to £5.2m in 2011. Although those figures may be small beer in football terms, rugby, even in Wales, is labouring to cling on to existing sponsorship and commercial deals.

The report says: "The historical financial performances show that the four regional businesses are not sustainable, on a stand-alone basis, in their current form."

It further paints a gloomy picture of rising dissatisfaction in the valleys over the way that the governing body has undermined the club game, some of which will be familiar to those who have followed events in Scotland since the advent of professionalism in 1995.

"We understand from regional representatives that the impact of the global financial crisis, together with benefactors becoming disillusioned with a relationship of conflict [with the WRU] has removed most or all of this support for the regional businesses. [They] could and should have been run in a more professional and commercial manner and poor decision-making has contributed to the size of the funding gap."

Essentially, the report has confirmed three key realities for the Welsh to mull over. First, they must now accept that they cannot compete financially with the richer French and English clubs and will have to cut their cloth accordingly.

Second, they cannot expect supporters to keep turning up at district level without a marked improvement in results, given the increasing number of expensive international fixtures being staged by the WRU in Cardiff. And third, that, irrespective of Wales' rich rugby heritage, four regions may be too many in a country which only has 1.5m people.

In that light, the report might sound a wake-up call. On the other hand, it may heighten fears about the long-term viability of a 12-team tournament, where the Welsh and Italians are toiling.

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