Cardiff Rugby are preparing to enter administration after players and staff were informed of the club’s financial crisis during an emergency meeting on Tuesday afternoon. The regional side will file a formal Notice of Intention (NOI) to appoint administrators. This is a legal step that temporarily protects the business from creditor action while a rescue plan is considered.

The club’s financial troubles have worsened since the death of long-time benefactor Peter Thomas in March 2023. Thomas was a constant financial lifeline for the club, investing millions into Cardiff Rugby from its inception as a regional entity in 2003. 

In January 2024, investment group Helford Capital Limited acquired an 84.55% shareholding in the club. They completed a takeover that had been hoped to secure the team’s long-term future. The group is led by British businessmen Phil Kempe and Neal Griffith, both of whom joined the board as part of the deal.

However, doubts have since emerged around the credibility of the new ownership. This week, it was revealed that Griffith was previously the chief executive and shareholder of financial services company Optima Worldwide Group. The business went into liquidation in 2021 owing £37 million to creditors, and the liquidation process is still ongoing.

The Welsh Rugby Union (WRU) is expected to take over the running of the club temporarily, although it cannot formally assume control until the administration process is complete. An extended lease agreement could enable joint development plans.

Cardiff’s plight is the latest chapter in a broader financial crisis engulfing Welsh rugby. Since the pandemic, regional funding from the WRU has declined significantly. Payments dropped from £7.2 million in the 2022-23 season to £5.2 million in 2023-24, and then to £4.5 million this season. The steep decline has forced regions to slash player wages and reduce squad sizes.

Several players have also left the clubs for alternative careers, contributing to a talent drain that has affected competitiveness. Scarlets and Ospreys, Cardiff’s fellow professional regions, have also reported serious financial losses. Scarlets posted a £2.59 million loss for the last financial year (a slight improvement from £2.91m), while Ospreys recorded a £2.18 million loss (up slightly from £2.15m). Dragons, who were previously under WRU ownership due to financial challenges, returned to private hands in 2023.

The WRU has been in protracted negotiations with the four regions, namely Cardiff, Ospreys, Scarlets and Dragons over a new six-year Professional Rugby Agreement (PRA). The deal is central to the WRU’s “One Wales” strategy, which aims to ensure each region operates as a viable business backed by private investment.

However, Cardiff’s looming administration is likely to delay finalisation of the agreement. It also raises difficult questions about the sustainability of the current funding model. For now, Cardiff’s season will continue. The club intends to honour existing player contracts, including new signings due to arrive this summer. 

This news marks a significant low point for one of Welsh rugby’s most historic sides. It shows the deep-rooted financial instability in the professional game. In England, top-flight clubs London Irish, Worcester Warriors and Wasps all went out of business during the 2022-23 season. With the rugby calendar increasingly packed, revenue streams shrinking, and costs rising, the pressure on clubs to remain viable has never been higher.