The Welsh Rugby Union (WRU) has reported losses of £18m for the year to June 2026, more than double the £7.2m deficit recorded the previous year, according to its latest annual accounts.
Turnover rose by £10m to £116.2m, but EBITDA (earnings before interest, tax, depreciation and amortisation, and before rugby allocations and exceptional costs) fell from £32.8m to £19.7m. Excluding the impact of owning Cardiff Rugby, acquired in April 2025, EBITDA reduced from £35.2m to £28.5m.
Rising costs blamed for deterioration
Rising energy and staffing costs, combined with falling ticket sales and reduced fan spend, were blamed for the dramatic fall in financial performance. Distributions to all four professional clubs, semi-professional and community rugby totalled £32.6m, unchanged from the year before.
WRU chief operating officer Gavin Marshall said the forecast for FY27 shows an improved EBITDA of £31.4m, distributions of £34.2m and an operating loss of £16.1m.
"This has been a challenging financial year," said Marshall. "Whilst we have grown revenue, our costs have increased faster, and our financial performance has declined when compared to the previous year."
Match income and costs
Marshall noted the WRU hosted seven men's internationals at Principality Stadium, compared with five the previous year, but match income increased by only around £2m.
"This was challenging and reflected lower average ticket prices, some lower attendances and the global economic pressure on consumer spending. Direct stadium and event costs also increased by approximately £7m, reflecting the additional matches and events during the year, as well as higher staffing and event delivery costs," he said.
The losses are particularly worrying as the WRU plans to cut from four to three professional clubs.
Debt for equity swaps
The annual report also shows the debt for equity swap under PRA 25 for both the Dragons and the Ospreys, with the Scarlets set to be completed over the coming weeks. It shows that £2.9m of debt was converted into an equity interest in the Ospreys. The report also shows that from June 30, 2026, there is an investment of £2.813m in the Dragons, comprising 999 B Class Preferred Shares and one C Class Share.
The shares are "non-voting other than in respect of specified matters and do not provide the WRU with control or significant interest over Dragons RFC Limited."
"As part of that (PRA 25) we've transferred some of the debt for preference shares," said Marshall. "That's been completed now for Ospreys. So that was completed for Dragons this last year so that's in the accounts. Ospreys has happened and we anticipate it completing for Scarlets probably in the next month or so."
"I think it's advantageous for the clubs because they're exchanging debt which they'd be paying interest costs for preference shares where they're not. So yeah, it was all part of the PRA negotiations that we would do that and reduce the level of debt."
Operating costs and revenue breakdown
The scale of the financial strain is laid bare by the WRU's £83m operating costs, with £20m spent on performance rugby and £4m allocated to the community game. A further £28m was paid to Wales' four professional clubs, while Cardiff Rugby, which is owned by the governing body, recorded a loss of £1.2m over the same financial year.
The WRU generated total revenue of £111m during the year, with £39m coming from match income and a further £18m from commercial deals. Hospitality and catering brought in £22m, while the Parkgate Hotel contributed £14m. Competition income accounted for £9m, with £5m generated through other events and £4m from other sources.
The WRU also spent £3m in restructuring and legal costs having been in litigation with the Scarlets and now Swansea Council.
