‘Never sell tomorrow to fund today’: A fan’s view on selling the Principality Stadium

By Rob Thomas – Fan’s View

Rob Thomas is a rugby supporter and hospital director. He wrote for Swansea Bay News in February, warning that Welsh rugby could not “shrink its way to greatness”. He returned in August to urge the Ospreys and Scarlets to challenge the WRU’s licence process together. The views here are his own.

Former Wales international and property developer Mike Hall has floated an idea that will make plenty of Welsh rugby supporters instinctively recoil: sell the Principality Stadium, lease it back, and use the capital released to rebuild Welsh rugby.

Sell the national stadium?

Surely not.

But before we reach for the pitchforks, it is worth separating the emotional reaction from the commercial argument. Hall is a property developer and, unsurprisingly, he is looking at the problem through a property developer’s eyes.

The model he is describing is essentially a sale and leaseback. A business owns a valuable property, sells it to an investor, receives a substantial lump sum and simultaneously signs a long-term lease allowing it to continue occupying and operating the property.

In corporate finance this is hardly revolutionary.

The attraction is obvious.

The WRU potentially has a very valuable asset sitting in the centre of Cardiff. Yet Welsh rugby desperately needs investment elsewhere.

Selling the stadium could therefore release a very substantial amount of capital without Wales actually losing the use of its national stadium.

Imagine, purely illustratively, that such a transaction released hundreds of millions of pounds.

That immediately creates an intriguing question.

Could some of that money be invested in academies, coaching, facilities, community rugby, the professional game and the commercial development of Welsh rugby?

Could a properly invested capital fund generate returns that helped support the game for decades?

Could we turn bricks and mortar into rugby infrastructure?

Those are legitimate questions.

And this is where I think Hall deserves a fair hearing.

Welsh rugby has spent too much of the past few years talking about cuts, restructuring, mergers and survival.

All may sometimes be necessary.

But you cannot shrink your way to greatness.

Eventually Welsh rugby needs a strategy for growth.

However, there is an enormous catch.

Selling an asset does not create wealth by itself.

It simply changes the form in which you hold it.

Today the WRU owns the stadium. After a sale and leaseback, somebody else owns it and the WRU has a contractual obligation to pay rent, potentially for decades.

That rent will almost certainly rise over time.

The stadium would therefore move from being an asset on which Welsh rugby has considerable control to becoming a long-term financial liability.

And that makes the crucial question not:

How much could we sell the stadium for?

It is:

What would we do with the money?

That distinction is everything.

If the WRU sold the stadium and used the proceeds simply to cover operating losses, subsidise an unsustainable structure or postpone difficult decisions, it would be a dreadful transaction.

You would effectively be selling the family silver to pay the electricity bill.

Eventually the money disappears.

The problems remain.

And now you have rent to pay as well.

But there is another version.

Suppose the proceeds were ring-fenced rather than absorbed into everyday expenditure.

Suppose a significant proportion became a professionally managed long-term investment fund.

Suppose another element funded genuine transformation of the rugby system, producing better players, stronger clubs, improved facilities and new commercial revenues.

Then the calculation becomes considerably more interesting.

You would be comparing the future economic value of owning the stadium with the future economic value created by deploying that capital elsewhere.

That is precisely the sort of calculation sophisticated businesses make.

There would also need to be formidable safeguards.

Any lease would have to protect Welsh rugby’s long-term access to the stadium. Inflation-linked rent, maintenance obligations, redevelopment rights, naming rights, event revenues and the eventual expiry of the lease would all matter enormously.

A poor lease could haunt Welsh rugby for generations.

There is also something that cannot easily be captured on a spreadsheet.

The Principality Stadium is not simply another piece of commercial property.

It is one of the great rugby stadiums in the world and an important Welsh national asset. Ownership carries strategic control as well as financial value.

Once sold, recovering that control could prove impossible.

So my starting position would not be “sell the stadium”.

Nor would it be “never sell the stadium”.

It would be: show us the numbers.

What is the stadium genuinely worth?

What rent would the WRU pay?

How would that rent escalate?

What income and control would be retained?

What would the sale proceeds be used for?

What return could reasonably be expected from investing them elsewhere?

And, crucially, what would Welsh rugby look like twenty or thirty years afterwards under each scenario?

That analysis should be published and debated openly.

Because there is a broader point here.

Welsh rugby needs to rediscover the habit of thinking big.

For too long much of the conversation has been about how to divide a shrinking cake.

Mike Hall is at least asking whether we can make the cake bigger.

His particular solution may ultimately prove financially brilliant, marginal or completely wrong. Only rigorous modelling can tell us that.

But the mindset behind the question is one Welsh rugby badly needs.

Assets exist to serve the mission of an organisation, not the other way around.

If owning the Principality Stadium remains the best way of creating long-term value for Welsh rugby, keep it.

If releasing some or all of the capital tied up in it could demonstrably create substantially greater value for the game, we should be brave enough at least to examine the possibility.

But there should be one absolute rule.

Never sell tomorrow to fund today.

If Welsh rugby ever sells its greatest physical asset, the proceeds should be used to build something even more valuable in its place.