The IRFU last night revealed a €26 million loss in projected earnings from the sale of five- and 10-year tickets. Less than half the 3,700 tickets that recently went on sale for €9,000 and €5,500 were actually sold.
It means the union will have to borrow to fund the professional game over the next six years, in the hope of making up the deficit with the sale of 5,000 premium level tickets in 2020.
The 2,000 leftover tickets will now be available on a match-by-match basis.
"We've been to the market and the it has said what it has said, we sold just under 50 percent of the tickets," IRFU chief executive Philip Browne confirmed.
The aim was to make €40 million from their sale, but only €14 million will be banked. This will force the union to borrow €25 million to keep the national and provincial squads competitive over the next six seasons.
Browne also confirmed the funding of all professional squads will need to be reduced. It is unconfirmed how this will influence contract negotiations with Ireland's best players.
“We will all have to tighten our belts but we are going to continue to operate at the levels we are at. We will continue to fund four professional teams and the national team and the domestic game.
“It is business as usual we are just going to have to borrow to fund that cash deficit over the next six years.”
This all came as a surprise to the union. They had consulted 10-year ticket holders and Deloitte before setting the same price as 2003, which was a €6,000 reduction on 2010 10- year tickets.
“I think everybody is surprised we didn’t sell as many as we hoped but that’s the nature of the economy at the moment.”
A severance payment of €11.5 million did come from Puma after they prematurely pulled out of Irish rugby and a new short sponsor is imminent, said Browne.
There was also a drop to a €4.5 million deficit in operating cash flow from last season’s €2.4 million surplus.
Honorary treasurer Tom Grace didn't try to sugar coat the union's disappointment at last night's AGM at the Aviva stadium.
“It was hoped we would be debt-free by now; however, the down turn means we will have to borrow,” said Grace.
“Overall, if there’s a message coming through here it’s that the national team is the key provider for all activities undertaken by the union.
“Without the dividend this generates there would be no IRFU funding for provincial teams and consequently the branches would be relying on what they themselves can generate.
“There is absolutely no doubt that times are hard but we are extremely fortunate that we have managed our cash conservatively over the last number of years. The disappointing result with the sale of 10-year tickets reflects what is happening in the economy.
"I think, as a unit, we need to concentrate to develop again. If we don't spend on the development of the game we can throw our hat at it," said Grace in a speech to union members, including new president Pat Fitzgerald.
Loss in income
There is another loss in income expected when, or if, the ongoing negotiations with the French and English for newly structured European competitions reaches a conclusion.
Browne was angry about what he believes is the behind-the-scenes work of the English clubs on this matter.
“I think there is a fair degree of misinformation floating around in the media in relation to this. I think there is some pretty errant nonsense in the media, I presume it comes from the English clubs, suggesting ERC aren’t entitled to centrally sell the rights for future competitions. That is nonsense as it has been done in the past. How else do you secure your future but by selling your rights?
“It is also strange that they take that view when they also have a shareholder on the board and were present when that decision was rightly taken.
“It is also bizarre that Premier Rugby Ltd (English) castigated ERC for selling the rights centrally then went off and sold the rights to all matches involving English teams in England, Scotland, Wales and Ireland to BT Vision without any reference to the Irish union, Scottish union, Welsh union or, I think, to the English union.”