Last updated on .From the section Welsh Rugby

Dragons takeover: Stuart Davies warns of dangers facing rugby in Newport

The Welsh Rugby Union (WRU) takeover of Newport Gwent Dragons will be put to the vote on Tuesday, 9 May.

The takeover, which would include the Rodney Parade ground, has already been approved by the WRU and Dragons boards.

It needs to be ratified by 75% of Newport RFC shareholders next month.

Dragons chief executive Stuart Davies agreed the decision was pivotal, adding: "It is a hugely important moment in the history of Newport RFC, the Dragons and Rodney Parade."

He warned that holding company Rodney Parade Ltd faced going into liquidation of a deal was not agreed.

The shareholders have been issued with a document providing information on the central issues. external-link

It also includes an open letter from Tony Brown, external-link one of the two main financial backers, advocating the deal. external-link

Rugby union has been played at Rodney Parade since 1877, and the ground is used by the Dragons regional side, Newport RFC and League Two football club Newport County.

The venue is in need of updating, with the pitch suffering from water-logging problems that have led to football and rugby matches being abandoned or postponed.

What's on offer?

The deal on offer would see:

The WRU paying £3.75m for Rodney Parade

A pledge of £1.5m to improve the venue, including improvements to the pitch, floodlights and stands

Benefactors Brown and Martyn Hazell writing off 84% of loans and paid a total of £900,000 between them

Newport RFC receiving £600,000 and given greater independence.

Davies described the Dragons current financial position - set out in the documents sent to shareholders - as "not healthy" and suggested a refusal to go ahead with the takeover could lead to the end of rugby at Rodney Parade.

quote It all points to one thing. Rugby stops and the ground is sold Stuart Davies Newport Gwent Dragons chief executive

"It's a historic venue known the world over and the protection of the venue has been at the heart of this," he said.

"It's an incredibly important evening and we have done everything we can to ensure everything is understood and more importantly the implications of it not being supported.

"When you read through the circular and see the accounts you realise what our trading position is.

Newport Gwent Dragons, Newport RFC and Newport County FC all currently play at Rodney Parade

"Our financial situation is not healthy so the circular clearly sets out in the event a 'no vote' the directors are likely to call in an administrator or receiver and that leads to events where the ground has to be sold for best price to secured creditors.

"It all points to one thing. Rugby stops and the ground is sold."

How much is the ground worth?

Newport RFC chairman Will Godfrey said the WRU's offer of £3.75m for the ground reflected its value as a sports ground.

"The problem you have got is that you either treat it as a development site or a sporting venue," he said.

"There is limited demand for a sporting venue so when we established the value we consider that to be a fair price for a sporting venue.

"Some of the facilities here are pretty old and people coming are going to look at them and say is a further investment going to bring back a return?"

The money men

Tony Brown's involvement started in 1997 - six years before the formation of Newport Gwent Dragons

Major benefactor Brown said in his letter to shareholders he had initially invested £4m into Newport Rugby Club after his association started in 1997 which was turned into shares and written off when he initially left the board.

After returning to the board, Brown claims he and Martyn Hazell put in an extra £5.5m to 'keep the Newport Gwent Dragons and Newport afloat.'

He said the deal on offer was "the product of two years of many challenging board meetings and difficult decisions being taken to evolve it to this point, once we accepted that the current business model was not working and would ultimately fail.

"Both Martyn and myself are over 80 and anxious to cut back on our responsibilities.

Martyn Hazell is currently chairman of Newport Gwent Dragons and is part of the Pro Rugby Wales board

"Before doing so, we have explored multiple options while trying to ensure a successful Dragons, a secure Newport RFC, protection of the venue and the continuation of professional rugby in Gwent at Rodney Parade.

"The WRU became our preferred option rather than a choice of last resort, and I believe they are doing this with the best of intentions.

"They are best placed to make a success of the Dragons, and ensure rugby for all continues at Rodney Parade."