Auditors’ doubts over future of Newport Gwent Dragons

Auditors’ doubts over future of Newport Gwent Dragons

Auditors’ doubts over future of Newport Gwent Dragons

First published in Dragons South Wales Argus: Photograph of the Author by , Reporter

AUDITORS of Newport Gwent Dragons have cast doubt over whether the region can continue as a going concern.

In recent filed accounts for the year to May 2011, auditors Arthur Gait & Company said the region has liabilities of £2.4 million and incurred a net loss of £272,141.

"These conditions... indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern," the accounts read.

The accounts of Dragons Rugby Limited say that the directors considered there were "adequate facilities for the company's requirements" for a period of at least 12 months from the date of signing of the balance sheet.

"However the margin of facilities over requirements is not large and inherently there can be no certainty in relation to these matters."

The accounts show that Dragons Rugby Limited owes £762,207 to its parents company Newport Rugby Football Club Ltd, and owes £1.16 million to sister firm Rodney Parade Ltd.

On both Newport Rugby Football Club and Rodney Parade's accounts, the auditor says: "Dragons Rugby Limited may not... be able to repay this amount to the company".

Dragons Rugby is dependent on continuing financial support from the Welsh Rugby Union, its bankers, directors, "group undertakings" and others, according to the accounts.

Comments (31)

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10:48am Mon 9 Jul 12

bloggsy1 says...

Now aren't they glad they went Pro
Now aren't they glad they went Pro bloggsy1
  • Score: 0

11:05am Mon 9 Jul 12

ebbwdragon says...

As opposed to ?

We blew this at the start by not being a proper region.

Mike
As opposed to ? We blew this at the start by not being a proper region. Mike ebbwdragon
  • Score: 0

11:24am Mon 9 Jul 12

Owain Vaughan says...

The concept of "regional rugby" is fatally flawed anyway, whatever a "proper region" is.
The concept of "regional rugby" is fatally flawed anyway, whatever a "proper region" is. Owain Vaughan
  • Score: 0

11:30am Mon 9 Jul 12

Rugby Warrior Paulo says...

What a shame.

I'm wondering how much of a loss it will actually be if there's no more NGD?

Perhaps every cloud has a silver lining...
What a shame. I'm wondering how much of a loss it will actually be if there's no more NGD? Perhaps every cloud has a silver lining... Rugby Warrior Paulo
  • Score: 0

12:06pm Mon 9 Jul 12

Robert Shillabeer says...

This talk is normal in any business, as is a working overdraft. There are many people who just love to knock the concept of regional rugby simply because it is not thier regional side (Ebbw Vale based people blew it because of the greed of one man). Money is very tight yes, but just look at the other regions, the Ospreys are in trouble with the tax man and are operating at a loss, the Scarlets have been bailed out twice by the WRU and the Blues lost about £3m last year. The Dragons are carrying the debt for the new stand, but this is a sum spread over ten or twenty years so is not that much of a worry as t is being funded. Operationally things are very tight and bigger crowds are needed to make things safe. With an underspend of some £700,000 on players wages next year this cost seems to be under control and with additional income from the County playing at Rodney Parade the whole of Newport Rugby is reasonably secure but more needs to be done before anyone can say the business is secure.
This talk is normal in any business, as is a working overdraft. There are many people who just love to knock the concept of regional rugby simply because it is not thier regional side (Ebbw Vale based people blew it because of the greed of one man). Money is very tight yes, but just look at the other regions, the Ospreys are in trouble with the tax man and are operating at a loss, the Scarlets have been bailed out twice by the WRU and the Blues lost about £3m last year. The Dragons are carrying the debt for the new stand, but this is a sum spread over ten or twenty years so is not that much of a worry as t is being funded. Operationally things are very tight and bigger crowds are needed to make things safe. With an underspend of some £700,000 on players wages next year this cost seems to be under control and with additional income from the County playing at Rodney Parade the whole of Newport Rugby is reasonably secure but more needs to be done before anyone can say the business is secure. Robert Shillabeer
  • Score: 0

12:14pm Mon 9 Jul 12

high x boy says...

well said Robert
well said Robert high x boy
  • Score: 0

12:19pm Mon 9 Jul 12

NakedDancer says...

Regional rugby seems to work well in Ireland, the Wales national team are doing well and the Welsh Regional setup seems to be producing a lot of good young talent. There seems to be a lot of benefits yet the finances seem to be a shambles.

A Dragons net loss of 272k for the season isn't that scary compared to 2.3m loss for Cardiff Blues and 5.5m debt at the Scarlets. The Dragons probably can break even season on season.

However, the Dragons will never generate the profits to pay back 1.9m debt to Newport RFC/Rodney Parade. Hence, unless a benefactor or the WRU pay the debt, the obvious solution is for Newport RFC/Rodney Parade to take over the regional franchise and scrap the Dragons.

On the other hand, if the Dragons are part-owned by Newport RFC do they just owe the debt to themselves ? confusing !
Regional rugby seems to work well in Ireland, the Wales national team are doing well and the Welsh Regional setup seems to be producing a lot of good young talent. There seems to be a lot of benefits yet the finances seem to be a shambles. A Dragons net loss of 272k for the season isn't that scary compared to 2.3m loss for Cardiff Blues and 5.5m debt at the Scarlets. The Dragons probably can break even season on season. However, the Dragons will never generate the profits to pay back 1.9m debt to Newport RFC/Rodney Parade. Hence, unless a benefactor or the WRU pay the debt, the obvious solution is for Newport RFC/Rodney Parade to take over the regional franchise and scrap the Dragons. On the other hand, if the Dragons are part-owned by Newport RFC do they just owe the debt to themselves ? confusing ! NakedDancer
  • Score: 0

1:00pm Mon 9 Jul 12

ebbwdragon says...

Robert Shillabeer wrote:
This talk is normal in any business, as is a working overdraft. There are many people who just love to knock the concept of regional rugby simply because it is not thier regional side (Ebbw Vale based people blew it because of the greed of one man). Money is very tight yes, but just look at the other regions, the Ospreys are in trouble with the tax man and are operating at a loss, the Scarlets have been bailed out twice by the WRU and the Blues lost about £3m last year. The Dragons are carrying the debt for the new stand, but this is a sum spread over ten or twenty years so is not that much of a worry as t is being funded. Operationally things are very tight and bigger crowds are needed to make things safe. With an underspend of some £700,000 on players wages next year this cost seems to be under control and with additional income from the County playing at Rodney Parade the whole of Newport Rugby is reasonably secure but more needs to be done before anyone can say the business is secure.
So Ebbw Vale based people blew it through greed did they ? It was nothing to do with 11.5k people signing to put 'Newport' in the name and then after getting their way ( something that lost us all the valleys support ) didn't bother to turn up.

I broadly agree with the rest of your post regarding the situation being 'par for the course' but make no mistake you cannot blame all our woes those nasty people from up the valleys.

Mike
[quote][p][bold]Robert Shillabeer[/bold] wrote: This talk is normal in any business, as is a working overdraft. There are many people who just love to knock the concept of regional rugby simply because it is not thier regional side (Ebbw Vale based people blew it because of the greed of one man). Money is very tight yes, but just look at the other regions, the Ospreys are in trouble with the tax man and are operating at a loss, the Scarlets have been bailed out twice by the WRU and the Blues lost about £3m last year. The Dragons are carrying the debt for the new stand, but this is a sum spread over ten or twenty years so is not that much of a worry as t is being funded. Operationally things are very tight and bigger crowds are needed to make things safe. With an underspend of some £700,000 on players wages next year this cost seems to be under control and with additional income from the County playing at Rodney Parade the whole of Newport Rugby is reasonably secure but more needs to be done before anyone can say the business is secure.[/p][/quote]So Ebbw Vale based people blew it through greed did they ? It was nothing to do with 11.5k people signing to put 'Newport' in the name and then after getting their way ( something that lost us all the valleys support ) didn't bother to turn up. I broadly agree with the rest of your post regarding the situation being 'par for the course' but make no mistake you cannot blame all our woes those nasty people from up the valleys. Mike ebbwdragon
  • Score: 0

1:04pm Mon 9 Jul 12

ebbwdragon says...

Rugby Warrior Paulo wrote:
What a shame. I'm wondering how much of a loss it will actually be if there's no more NGD? Perhaps every cloud has a silver lining...
How the hell will losing Regional Rugby in Gwent be a 'Silver Lining'. All the quality players produced in our area and we don't get to see them, surely your not happy to just watch Premiership matches every week as a preference.

Mike
[quote][p][bold]Rugby Warrior Paulo[/bold] wrote: What a shame. I'm wondering how much of a loss it will actually be if there's no more NGD? Perhaps every cloud has a silver lining...[/p][/quote]How the hell will losing Regional Rugby in Gwent be a 'Silver Lining'. All the quality players produced in our area and we don't get to see them, surely your not happy to just watch Premiership matches every week as a preference. Mike ebbwdragon
  • Score: 0

1:18pm Mon 9 Jul 12

Cymro57 says...

Am a valleys rugby supporter too. But it is a fact that only 40 season tickets for the GWENT Dragons were sold to postal addresses outside of Newport in that first pre-season. And some of those were Newport supporters. The Dragons had no other option but to include Newport in the name to entice the lost Newport support. We can't moan now, we in the valleys only have ourselves to blame for that.
Am a valleys rugby supporter too. But it is a fact that only 40 season tickets for the GWENT Dragons were sold to postal addresses outside of Newport in that first pre-season. And some of those were Newport supporters. The Dragons had no other option but to include Newport in the name to entice the lost Newport support. We can't moan now, we in the valleys only have ourselves to blame for that. Cymro57
  • Score: 0

1:27pm Mon 9 Jul 12

East Newport Dave says...

The Dragons are no different to 80% of rugby/football teams which are mired in debt. It depends upon the extent of the debt but I could not envisage Tony Brown calling in the debt. As has been pointed out, Newport RFC and the Dragons crossover financially and what would Rodney Parade be if not for the existence of the Dragons. Of course the Dragons are half owned by the WRU who would shoulder their proportion of monies owed. Wouldn't they??!!??
The Dragons are no different to 80% of rugby/football teams which are mired in debt. It depends upon the extent of the debt but I could not envisage Tony Brown calling in the debt. As has been pointed out, Newport RFC and the Dragons crossover financially and what would Rodney Parade be if not for the existence of the Dragons. Of course the Dragons are half owned by the WRU who would shoulder their proportion of monies owed. Wouldn't they??!!?? East Newport Dave
  • Score: 0

1:51pm Mon 9 Jul 12

dalesman1666 says...

Why is the governing body allowing clubs to run up such large debts. As all the regions are in debt can we now assume once and for all regional rugby is not working in wales. Are the debts managable, The numbers people say no. Ignore at your peril.
Why is the governing body allowing clubs to run up such large debts. As all the regions are in debt can we now assume once and for all regional rugby is not working in wales. Are the debts managable, The numbers people say no. Ignore at your peril. dalesman1666
  • Score: 0

2:22pm Mon 9 Jul 12

dalesman1666 says...

East Newport Dave wrote:
The Dragons are no different to 80% of rugby/football teams which are mired in debt. It depends upon the extent of the debt but I could not envisage Tony Brown calling in the debt. As has been pointed out, Newport RFC and the Dragons crossover financially and what would Rodney Parade be if not for the existence of the Dragons. Of course the Dragons are half owned by the WRU who would shoulder their proportion of monies owed. Wouldn't they??!!??
Would they,? good luck with that one. The dragons will never be able to compete financially with the other regions. The scarlets, ospeys + the blues are global brands. The dragons will allways be a poor region financially. Also some of the other regions debts are bigger than the dragons but they are managable, Due to bigger fan base and lucrative sponsorship deals. Newport and gwent dont exist, cardiff down to west wales is the money train. Nothing changes there. Sad but true.
[quote][p][bold]East Newport Dave[/bold] wrote: The Dragons are no different to 80% of rugby/football teams which are mired in debt. It depends upon the extent of the debt but I could not envisage Tony Brown calling in the debt. As has been pointed out, Newport RFC and the Dragons crossover financially and what would Rodney Parade be if not for the existence of the Dragons. Of course the Dragons are half owned by the WRU who would shoulder their proportion of monies owed. Wouldn't they??!!??[/p][/quote]Would they,? good luck with that one. The dragons will never be able to compete financially with the other regions. The scarlets, ospeys + the blues are global brands. The dragons will allways be a poor region financially. Also some of the other regions debts are bigger than the dragons but they are managable, Due to bigger fan base and lucrative sponsorship deals. Newport and gwent dont exist, cardiff down to west wales is the money train. Nothing changes there. Sad but true. dalesman1666
  • Score: 0

2:59pm Mon 9 Jul 12

Oddjob says...

Season ticket sales must be slow. Anyway the WRU are co-owners of the Dragons, let them stump up a few bob to pay the debts owed to Newport RFC.
Season ticket sales must be slow. Anyway the WRU are co-owners of the Dragons, let them stump up a few bob to pay the debts owed to Newport RFC. Oddjob
  • Score: 0

4:04pm Mon 9 Jul 12

dalesman1666 says...

It,s a bit more than a few bob, And not the wru,s debt, They didnt lose the money ngd did. Also should the money raised by the wru from the paying public be used to bail out a region that many welsh clubs have no connection with. I wouldnt like to put it to a vote. As it,s only a few bob the supporters could raise that in a few weeks surelly.
It,s a bit more than a few bob, And not the wru,s debt, They didnt lose the money ngd did. Also should the money raised by the wru from the paying public be used to bail out a region that many welsh clubs have no connection with. I wouldnt like to put it to a vote. As it,s only a few bob the supporters could raise that in a few weeks surelly. dalesman1666
  • Score: 0

6:14pm Mon 9 Jul 12

East Newport Dave says...

Dalesman - the WRU insisted on joint ownership so they carry a joint burden. It's got nothing to do with the paying public.
Dalesman - the WRU insisted on joint ownership so they carry a joint burden. It's got nothing to do with the paying public. East Newport Dave
  • Score: 0

6:47pm Mon 9 Jul 12

countyno9 says...

When i stated that the rugby needed the County as they were in debt i was met with derision and told i was taliking rubbish , well i dont like to say i told you so , but i told you so , the rugby needs the county and the more successful the footy are the more the rugby will benefit , so are the rugby glad they have the County there ? Yes of course they are and they definetley need the footy to do well as the better the County do the more cash the rugby get , and boy dont the rugby need it , so heres to hoping that all three teams have great seasons and we all buy into the Newport sporting club venture be it Footy or Rugby , in me the rugby has gained a fan and now the barriers have come down i will pay my money and watch the rugby when im not at the County , and likewise it would be nice if the County gain rugby sports fans , as the future of sport in newport looks like we both need each other , which is no bad thing , so heres to Newport sporting success in 2012 , 2013 season .
When i stated that the rugby needed the County as they were in debt i was met with derision and told i was taliking rubbish , well i dont like to say i told you so , but i told you so , the rugby needs the county and the more successful the footy are the more the rugby will benefit , so are the rugby glad they have the County there ? Yes of course they are and they definetley need the footy to do well as the better the County do the more cash the rugby get , and boy dont the rugby need it , so heres to hoping that all three teams have great seasons and we all buy into the Newport sporting club venture be it Footy or Rugby , in me the rugby has gained a fan and now the barriers have come down i will pay my money and watch the rugby when im not at the County , and likewise it would be nice if the County gain rugby sports fans , as the future of sport in newport looks like we both need each other , which is no bad thing , so heres to Newport sporting success in 2012 , 2013 season . countyno9
  • Score: 0

7:36pm Mon 9 Jul 12

the dork says...

If NG Dragons merge with London Welsh next season and play English Premier teams at RP it will be filled No one wants to see edinburgh glasgow connaught et al.
If NG Dragons merge with London Welsh next season and play English Premier teams at RP it will be filled No one wants to see edinburgh glasgow connaught et al. the dork
  • Score: 0

8:46pm Mon 9 Jul 12

dalesman1666 says...

This could be the opportunity to gauge the support for the region by trying to raise a large amount of capital to help reduce the debt. Well what are you waiting for, Every little helps. lol
This could be the opportunity to gauge the support for the region by trying to raise a large amount of capital to help reduce the debt. Well what are you waiting for, Every little helps. lol dalesman1666
  • Score: 0

8:47pm Mon 9 Jul 12

DOWNTHEPIT says...

why not use the dragons as a development team, the u/20 coaches are saying that their players need to play more rugby and not sitting on benches , more or less the same as connacht did in ireland when they started and their other 3 sides haven't done to bad have they
why not use the dragons as a development team, the u/20 coaches are saying that their players need to play more rugby and not sitting on benches , more or less the same as connacht did in ireland when they started and their other 3 sides haven't done to bad have they DOWNTHEPIT
  • Score: 0

9:38pm Mon 9 Jul 12

LSB Bee says...

Less money from the WRU, less people attending matches, less gate money, all the best players incl the likes of Falateau and Lydiate playing for the other regions, yes that sounds like a really good idea
Less money from the WRU, less people attending matches, less gate money, all the best players incl the likes of Falateau and Lydiate playing for the other regions, yes that sounds like a really good idea LSB Bee
  • Score: 0

9:54pm Mon 9 Jul 12

arvinda strop says...

Exactly what the fareparck and mfi bigwigs said just before it all went belly up.
Lets hope this is not of the same ilk.
Exactly what the fareparck and mfi bigwigs said just before it all went belly up. Lets hope this is not of the same ilk. arvinda strop
  • Score: 0

5:47pm Tue 10 Jul 12

Robert Shillabeer says...

All the doom merchants are posting on here again, normal I suppose, but look beyond all this rubbish about development regions and Newport RFC becoming the side in the Rabodirect, it won't happen. As an Ebbw Vale lad now living now living in Caldicot and a season ticket holder of both the Dragons and Newport RFC for a number of years and watching how Ebbw Vale get on with an eye on Cross Keys, Pontypool and Bedwas as clubs that form part of the Gwent region and have Dragons players allocated to them, something that Pontypool could lose very shortly, shows how the Dragons are trying to build a truly regional concept in East Wales. As for the Dragons merging with London Welsh, this makes me laugh, why would either side want to do this, if London Welsh moved to Rodney Parade thier support would be devastated as would the Dragons should they move to Oxford, so realistically that is a none starter. The financial report is after all well over a year old and at less than £3 million and mainly down to the new stand is manageable and still less than the other three regions. As far as season ticket sales they are 80% up on the same period last year, so to me that says 80% more committed support this coming season. What time is the 2012/13 fixture list published, anyone know?
All the doom merchants are posting on here again, normal I suppose, but look beyond all this rubbish about development regions and Newport RFC becoming the side in the Rabodirect, it won't happen. As an Ebbw Vale lad now living now living in Caldicot and a season ticket holder of both the Dragons and Newport RFC for a number of years and watching how Ebbw Vale get on with an eye on Cross Keys, Pontypool and Bedwas as clubs that form part of the Gwent region and have Dragons players allocated to them, something that Pontypool could lose very shortly, shows how the Dragons are trying to build a truly regional concept in East Wales. As for the Dragons merging with London Welsh, this makes me laugh, why would either side want to do this, if London Welsh moved to Rodney Parade thier support would be devastated as would the Dragons should they move to Oxford, so realistically that is a none starter. The financial report is after all well over a year old and at less than £3 million and mainly down to the new stand is manageable and still less than the other three regions. As far as season ticket sales they are 80% up on the same period last year, so to me that says 80% more committed support this coming season. What time is the 2012/13 fixture list published, anyone know? Robert Shillabeer
  • Score: 0

8:46pm Tue 10 Jul 12

countyno9 says...

looks like its over to the towns footy team to save the rugby , my god you need a successful County now , more people more the rugby get , no wonder the rugby were dsperate to get the County to Rodney , good bit of buisness if you ask me , and football will save the day.
looks like its over to the towns footy team to save the rugby , my god you need a successful County now , more people more the rugby get , no wonder the rugby were dsperate to get the County to Rodney , good bit of buisness if you ask me , and football will save the day. countyno9
  • Score: 0

9:51pm Tue 10 Jul 12

Regionalist says...

countyno9 wrote:
looks like its over to the towns footy team to save the rugby , my god you need a successful County now , more people more the rugby get , no wonder the rugby were dsperate to get the County to Rodney , good bit of buisness if you ask me , and football will save the day.
Eh? How much debt do you think it will take to make Newport County successful?
[quote][p][bold]countyno9[/bold] wrote: looks like its over to the towns footy team to save the rugby , my god you need a successful County now , more people more the rugby get , no wonder the rugby were dsperate to get the County to Rodney , good bit of buisness if you ask me , and football will save the day.[/p][/quote]Eh? How much debt do you think it will take to make Newport County successful? Regionalist
  • Score: 0

11:40pm Tue 10 Jul 12

LSB Bee says...

And all the rose-tinted spectacle wearers and cloud cuckoo-land merchants are posting on here too. A 'truly regional concept in East Wales' - none so blind as those who don't want to see.
And all the rose-tinted spectacle wearers and cloud cuckoo-land merchants are posting on here too. A 'truly regional concept in East Wales' - none so blind as those who don't want to see. LSB Bee
  • Score: 0

4:15pm Wed 11 Jul 12

Robert Shillabeer says...

Well the Dragons fixture list is out and we have an even split of home and away games for most of the season too boot. Zebre home is the first up on 31 Aug/1/2Sept, got my top ready unless new ones are made available before the kick off. Just waiting now for the season to start.
Well the Dragons fixture list is out and we have an even split of home and away games for most of the season too boot. Zebre home is the first up on 31 Aug/1/2Sept, got my top ready unless new ones are made available before the kick off. Just waiting now for the season to start. Robert Shillabeer
  • Score: 0

4:54pm Wed 11 Jul 12

countyno9 says...

Newport County have very little debt , it,s the rugby thats carrying the big debt not the footy team , the rugby needs the football make no mistake about that , the footy team will save the rugby dont worry.
Newport County have very little debt , it,s the rugby thats carrying the big debt not the footy team , the rugby needs the football make no mistake about that , the footy team will save the rugby dont worry. countyno9
  • Score: 0

2:04pm Fri 13 Jul 12

arvinda strop says...

countyno9 wrote:
Newport County have very little debt , it,s the rugby thats carrying the big debt not the footy team , the rugby needs the football make no mistake about that , the footy team will save the rugby dont worry.
If the county are so sucsessful and affluent why do they not ave a home of there own why did they go cap in hand to there betters down the road at rodney to help with the rent money ?
And where would they be if NRFC had said NO THANKS.
B a good little lodger and be thankful we are letting yu play in such a grand stadium.
lets hope you can afford the rent money.
Sat back and waiting :-)
[quote][p][bold]countyno9[/bold] wrote: Newport County have very little debt , it,s the rugby thats carrying the big debt not the footy team , the rugby needs the football make no mistake about that , the footy team will save the rugby dont worry.[/p][/quote]If the county are so sucsessful and affluent why do they not ave a home of there own why did they go cap in hand to there betters down the road at rodney to help with the rent money ? And where would they be if NRFC had said NO THANKS. B a good little lodger and be thankful we are letting yu play in such a grand stadium. lets hope you can afford the rent money. Sat back and waiting :-) arvinda strop
  • Score: 0

2:06pm Fri 13 Jul 12

arvinda strop says...

Sorry about the spelling it's difficult to type and laugh at the same time.
Sorry about the spelling it's difficult to type and laugh at the same time. arvinda strop
  • Score: 0

7:18pm Sat 14 Jul 12

Robert Shillabeer says...

I felt like posting a comment about Newport County and the deal to play at Rodney Parade, but decided to wait until all the rubbish was said first. This deal is of benefit to all three teams, both the Dragons and Newport RFC gain from the County playing at RP and of course the County will have a far better place to play and be more central to Newport with obvious transport links making it easier to get there. Hopefully all sides will have a good season with bigger crowds and therefore larger income for all three teams.
I felt like posting a comment about Newport County and the deal to play at Rodney Parade, but decided to wait until all the rubbish was said first. This deal is of benefit to all three teams, both the Dragons and Newport RFC gain from the County playing at RP and of course the County will have a far better place to play and be more central to Newport with obvious transport links making it easier to get there. Hopefully all sides will have a good season with bigger crowds and therefore larger income for all three teams. Robert Shillabeer
  • Score: 0

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