Surplus of €7.8m is a 'paper profit'
RUGBY:A RELATIVELY subdued IRFU annual general meeting yesterday saw honorary treasurer Tom Grace adopt a cautionary tone when announcing a surplus of €7.8 million.
In reality, the cash surplus of €2.4 million is a more accurate picture of the union’s financial affairs.
“The €7.8 million surplus is a paper profit only,” said Grace at the Aviva Stadium. “As I said last year, cash is king. If we adjust for non-cash items like depreciation and advertised income (10-year tickets sales, 3,200 of which are for sale in 2013), the union had a cash surplus of €2.4 million for the year, which is considerably less than the paper profit.”
Grace also made reference to a “key risk” to future income that is the inevitable change in the Heineken Cup structures.
“The IRFU and the provinces have benefited enormously from this competition over the last 12 years, from the sale of season tickets, gate receipts, prize money, not to mention the broader benefits to Irish rugby as a whole.
“Any proposed change to the structure of the competition will require the collective attention of the union and the provinces. I believe it is a big issue that needs to be handled carefully.”
Provincial income improved by €1.8 million last season mainly due to the progress of Leinster and Ulster to the Heineken Cup final, which was won by the former.
On this issue, IRFU chief executive Philip Browne said: “It’s well known that England and French clubs gave in their notice of their intention to withdraw from the Heineken Cup. There is a two-year period that clicks in now where we either reach an agreement about the future of the competition or alternatively the competition ceases.
“One assumes we’ll reach some sort of accommodation. It’s early days yet but inevitably there will be some change in how the competitions are structured or finances distributed.”
The union revenue for the 2011/12 year was €67.2 million while expenditure was €59.4 million.
“We made a surplus of €7.8 million compared with €6.7 million last year,” Grace continued.
“However, this is an unfair comparison. No two years in the IRFU are the same.
“For instance, in 2011/12 it was a Rugby World Cup year with no autumn internationals, no tour and two warm-up internationals (in Dublin) before the World Cup so we are not comparing like with like.”
The €2.5 million decrease in international rugby income was due to seven home matches in 2010/11 being reduced to “four and a half games at Aviva Stadium” this past campaign.
A quid pro quo arrangement with England saw the union halve the net gate income from their World Cup warm-up.
In four years’ time the IRFU will get 50 per cent of the gate from Twickenham before the 2015 tournament.
A figure of €300,000 was spent by the IRFU contesting the free-to-air issue television rights issue suggested by former minister for communications Eamon Ryan.
There was also a €2 million reduction in the professional game costs.
Meanwhile, Billy Glynn was elected the 125th president of the IRFU.
The retired solicitor and revenue sheriff is the seventh representative from the Galway club, Galwegians RFC, to take the position.
Educated at Garbally College, he won a Connacht Senior Cup with Galwegians in 1960 and a Leinster Senior Cup with UCD in 1963/64 while also featuring in the Irish universities’ defeat of the Springboks at Thomond Park in 1965.
Glynn was also capped by Connacht before a neck injury curtailed his playing days at the age of 24. He subsequently went on to have an impressive administrative career.