Over the past 18 months numerous suggestions have been put forward to drag Welsh rugby out of the doldrums. Following last Saturday's humilating 68-14 home defeat to England which sealed back-to-back wooden spoons, the calls for significant change has grown louder. One potential solution which has been put forward by numerous former players is cutting down to three professional sides in order to concentrate talent, as the Welsh Rugby Union have done before back in 2003. The WRU are committed to four professional sides - Cardiff, Dragons, Ospreys and Scarlets - in the new Professional Rugby Agreement (PRA) which will result in playing budgets rising to £6.9m by 2029. One argument against going down to three sides is that the remaining teams would have to take on the debt of the club which folds, while they may also lose out on TV income and there could also be a clawback from CVC - the private equity firm who own a big stake in the URC and Six Nations - due to the fact Wales would no longer be providing the contracted four teams to the club competition. Welsh rugby has undertaken numerous reviews over the years, but a really significant one was commissioned and published back in 2022. The Union paid Oakwell Sports Advisory to undertake a review into the state of Welsh rugby and to find solutions to its problems and plot a way forward. The Oakwell Report made a seismic recommendation, strongly advising cutting one of the professional clubs and stating the remaining three would be better off financially as a result. WRU CEO Abi Tierney has commissioned her own reviews into Welsh rugby, with a company called Portas undertaking the task, although the full findings have not been published. The main difference between Portas' review into Welsh rugby and the Oakwell Report is the latter only looked at the professional arm of the game. Also, Oakwell only looked at the short and very medium term up to 2025, while it never really focused on the failings of the WRU at the time, only highlighting issues with the regions. Oakwell's key suggestion centred on the fact Wales could only afford three professional sides, while it also identified a number of failings within the current structure of pro rugby and issued perilous warnings over what the future would hold unless action was taken. Back in 2022 Oakwell claimed cutting a pro club would realise savings of between £6m-£8.9m per annum in perpetuity. It found there would be no impact in a 25% reduction in competition income on the remaining three clubs but there would be an implication from clawback payments from CVC. It said player contracts from the deceased team would have to be honoured by the remaining three, while the player pool within Welsh rugby would be reduced to 135, i.e three lots of 45 players. Oakwell suggested the side which had been cut would drop into the Welsh Premiership which is now Super Rygbi Cymru. Oakwell was adamant if one Welsh club was to close there would be an immediate saving of £7.8m on average. Going by Oakwell's findings, any remaining CVC clawback for its investment into the United Rugby Championship would be dwarfed by the increase in payments the WRU could then make to the remaining three clubs. If the clawback was £5m, that money would be made back in Year one and the remaining clubs would be significantly better placed from Year two to potentially compete for silverware. During Covid, the Professional Rugby Board undertook an exercise to work out how much money would need to be spent per club to produce a side capable of potentially winning silverware. They came to the conclusion the total salaries for players would need to be in the region of £12m on top of coaching, backroom staff and academy costs. It was concluded their businesses would need to turn over close to £20m to make that work, whereas currently they turn over in the region of £14m. The new PRA is expected to push playing budgets up to £6.8m by 2029. It doesn't take a genius to work out that simply isn't high enough if any of the Welsh clubs are to compete for silverware on a consistent basis again. While the WRU and the Professional Rugby Board chose not to cut a professional side they did heed some of the warnings flagged up by the report. It claimed the funding uncertainty ‘creates budgeting difficulties’ for the four regions and that, according to Oakwell’s market analysis, the regions were overpaying players. Over the past couple of years there has been a "correction" in terms of player wages which have been driven down, while all four professional sides have had to tighten their belts, with the current salary cap set at £4.5m, although two marquee players are permitted above the cap. Another key point of the Oakwell Report focused on the need to implement ‘appropriate governance structures’. The report claimed things needed to be arranged so that the PRB has ‘real powers of authority’. Since 2022, progress has been made, with WRU clubs voting overwhelmingly in favour of governance reforms at an extraordinary general meeting in March 2023. The reform has allowed the WRU to appoint an independent non-executive chair (Richard Collier-Keywood) and recruit two new independent non-executive directors to its 12-person board, doubling the number of independent representatives to six. This has dampened the influence community clubs have over the professional game, with the new-look board far more suited to the challenges of professional rugby. But even so, the PRB probably doesn't quite have the 'real powers of authority" suggested by Oakwell. One suggestion of the Oakwell Report which both the WRU and the professional clubs have taken heed of in the new PRA is the attempt to create greater commercial alignment. There will be an emphasis in the new PRA on shared services, like collective kit deals. Oakwell suggested a central commercialised body with would see shared insights and commercial best practice implemented throughout the professional rugby eco-system in Wales, with things like ticketing & pricing strategies along with promotions & marketing strategies. It was claimed this would help solve the fragmented environment for commercial partners within Welsh rugby. The new PRA will move towards the shared services model while the WRU will also appoint a chief growth officer in an attempt to increase revenue. The WRU is offering to pay about £26m pa from 2027 through to 2029 with playing budgets expected to go up to £6.9m per club. In comparison, the IRFU is paying £33m (just for salaries) to its provinces from 2025 onwards which highlights the huge task both the WRU and the four professional clubs have in front of them to become successful. There is a two-year notice period of the WRU wanted to go down to three sides whereas they believe the instant uplift of funding which also entails taking £20m worth of the Covid debt onto their own balance sheet, will lead to a quicker upturn in performances. But the WRU are confident it can find ways, which are not yet in the public domain, of funding four successful professional clubs which will compete for silverware.