A Princely Sum

Principality Building Society have taken a bold step in securing
naming rights to the Millennium Stadium from 2016.
(Pic : Welsh Rugby Union)

As you probably already know, it was announced last week that the Welsh Rugby Union (WRU) have agreed a £15million, ten-year deal with Cardiff-based Principality Building Society for naming rights to the Millennium Stadium, which will be known as the Principality Stadium from January 2016.

It was rumoured that Barclays and Vodafone were interested and it's since been revealed that Barclays have taken a £10million share in the stadium....whatever that means. The deal was accompanied by the latest set of financial results for the WRU, which had a £64.2million turnover in 2014.

The deals, and financial results, effectively means the debt incurred by the WRU for the construction of the Millennium Stadium can be wiped out, or at the very least significantly reduced. The cherry on top was June's announcement that the stadium will host the 2017 Champions League final.

These are all great achievements – no bones about it. Regardless of your opinion of the people at the top, the WRU have been run very effectively from a business perspective - the on and off-pitch politics being a sore point. It augers well for Cardiff Airport, which (out-going WRU Chief Executive) Roger Lewis will move to after the Rugby World Cup.

So why does this deal sit uncomfortably?

It's nothing to do with the name. It's easy enough to tell the difference between the Principality Building Society and the derogatory small-p "principality" (Is Wales a principality?). It's disappointing that the rare occasion of a Welsh company showing ambition – a company which has long supported rugby through sponsorship - has attracted online petitions and social media sniping. It doesn't do the nationalist reputation of being a bit chippy any good.

Now you could see it as a back-handed wind-up - Roger leaving his post doing his best trollface and doffing a WRU cap to Chuck and Billy Windsor. Or, you could interpret the name as honoring the old principality/principalities, irony being of course that Cardiff was in The Marches.

Anyway, that aside, in modern sport selling naming rights is a necessary evil. I would have hoped the Millennium Stadium would've been an exception as it's a national icon, one of Cardiff's most famous landmarks and one of the most iconic stadiums in sport. You can't picture the English FA selling naming rights to Wembley, or Man United selling naming rights to Old Trafford.

What I'm actually disappointed about is how low-value the deal is, and it verges on suspiciously low.

For want of comparison, Dublin's Aviva Stadium naming rights deal has never been officially revealed, but is rumoured to be worth somewhere in the region of £3million (€4-4.5million) a year.

You would've therefore expected the rights to have been sold for at least £2.5million a year, if not matching – perhaps even exceeding – Dublin. That might've provided a bit more money for the grassroots or other investments in the game. It's great a Welsh company is sponsoring the stadium, but maybe it would've been better to have held out for a higher offer.

Watch the Neighbours

With the WRU seeking to expand facilities around the stadium, it
might be worth keeping an eye on the future of another Cardiff landmark.
(Pic : via keytothecity.co.uk)

Central Cardiff is currently undergoing something approaching a property boom. This includes the flagship Central Square development, and projects from local developer JR Smart – the most recent being a £100million deal with the Welsh Government to redevelop land which used to house the Welsh National Opera and No Fit State Circus.

Where there's money to be made there'll inevitably be some slightly backhanded deals going on.

Private Eye recently produced an interactive map (here) listing all the land currently owned by companies and individuals based in offshore tax havens. In south Wales you can see the handiwork of South Wales Land Developments (Dirty Deeds Done Dirt Cheap IV – Endgame?) as well as Oak Regeneration – which are listed as Beech Regeneration (see also : The Parc Slip Monster and The Abyss Staring Back at Wales) and even the National Assembly's Ty Hywel building.

What interested me is a piece of land adjoining the Millennium/Principality Stadium.

Earlier this year, the WRU announced plans to build Westgate Plaza – a 240,000sqft mixed-use development of apartments, retail, a 100-bed hotel andconference facilities directly linked to the stadium itself. This is land the WRU owns and there's nothing suspicious about it – it actually looks like a quality development, but was delayed since 2007 due to the recession.

Nearby – what's currently the Cardiff Civil Justice Centre, Parkgate offices (former Post Office) and a derelict building – is land listed as owned by British Virgin Islands-based company Hyperion Investments Ltd, who bought at least one of the buildings in 2011, reportedly paying £11.8million.

This sale would've happened long after WRU investigations had discovered who owned what around the stadium, and it's likely the WRU's plans for Westgate Street will have become public knowledge in Cardiff property circles long before 2011.

In 2013, it was reported the old post office building was up for sale for £11.5million by a London-based company called Bamfords Trust PLC, which seem to have links to the Syrian community.

Perfectly innocent?
(Pic : Modified via Private Eye)

It's highly-likely that once Westgate Plaza is built, land values on Westgate Street will sky rocket – especially if Cardiff Athletic Club press forward with plans to redevelop the Arms Park. One of the last remaining development plots in the area will be these Grade II listed offices. BT currently lease the building and that lease is due to run out in December 2022.

I might be putting 2 + 2 together here and coming up with 8, but the WRU seem to be in a rush to complete Westgate Plaza, and seem convinced it can be completed by 2019 – helped along by the recent cash boost equivalent of £25million from Principality and Barclays.

After it's built, as said, land values will rise in the surrounding area, which conveniently lies within the Cardiff enterprise zone and eligible for favourable support packages like business rate relief and finance. Currently empty or under-utilised buildings will become more attractive to investors and developers, and I'm sure this prime land - possibly owned by a company based in a tax haven - will be keenly sought after.

There's nothing wrong with that in itself bar the morality of systematic tax avoidance, but as the ongoing saga with the Grade II listed Coal Exchange proves, being listed is no guarantee that buildings of historical or architectural value won't be left to rot.

There's scant information about Hyperion Investments Ltd as the British Virgin Islands operate with notable secrecy, while there are numerous companies with similar names based elsewhere. It would be interesting to know who was on the board and who knew what about Westgate Plaza though but, alas, we will never know.

There's no scandal here, and there probably won't be in the future; but previous experience of cases where off-shore companies and land sales have mixed together, or even neighboured each other, indicates a scandal probably isn't too far away.