IRFU say return of crowds is key with deficit of almost €36m
Initial CVC investment in Pro 14 helped pay shortfall in provincial wages
The IRFU annual report for the 2019-20 season lays bare the financial effect of the coronavirus pandemic on the game here in confirming that the Union lost €35.7 million for the accounting period, which was extended to 15 months.
Stark as that is, the prospect of the pandemic being felt for another year or two raises the prospect of the Union having to drastically reduce costs, be it among its 480 employees, of which about 210 are full-time and part-time players, or other areas of the game.
When the crisis first hit the IRFU agreed salary deferrals with staff and players, and subsequently agreed cuts and reductions in working time ranging from 10 to 20 per cent.
With no sign of crowds being readmitted to games, this is a particularly unfortunate time for players facing the final year of existing contracts. Johnny Sexton, Tadhg Furlong, Iain Henderson, CJ Stander, Peter O’Mahony and Keith Earls are among those out of contract in June 2021.
The pandemic is having an equally damaging effect on the game globally, be it the club game in England and France, and the other unions. Accordingly, the Six Nations are looking to delay the start of the 2021 tournament to March/April, in the hope of crowds being admitted by then, which would be worth well over €100 million to the six unions.
There also remains the likelihood of CVC purchasing a 14.5 per cent share in the Six Nations which, prior to the pandemic, was estimated to be in the region of €350 million.
Meanwhile, the CVC investment in the Guinness Pro14 proved timely. The first tranche of €5.5 million helped the Union to effectively cover the provinces’ shortfall of €16 million in the players’ wage bill through to the end of this season.
As yet, unlike the FAI, the IRFU haven’t received any financial support from the Government which has, nonetheless, pledged €40 million to the three main sports bodies, of which the Union would be hopeful of at least a third.
While the Union lost just under €37 million in the 2019-20 season, which covers a 15-month period to incorporate the ongoing payment of wages caused by the extension of the season, in the 2018-19 season, helped by the sale of their site at Newlands, the Union made a profit of €28 million.
It is estimated that the sale of Newlands reaped €25-30 million for the Union, which then purchased its offices in Lansdowne Road for around €20 million.
Hence, in his final annual financial report after 13 years as honorary treasurer, the former Irish winger Tom Grace, noted: “We are very fortunate to have cash in the bank and an asset strong balance sheet at the moment.”
In addition to their new and old office in Lansdowne Road, the IRFU also own other properties on the other side of the Dart station as well as having a significant stake in the Aviva Stadium. The Union also has an estimated €28million in cash reserves.
Even so, Grace also added: “However, these resources won’t last forever and any amounts that we are forced to spend now will affect what we will have to spend in the future when some semblance of normality returns.
“At present we are able to fund ourselves and the provinces for the next 12 months even without further remedial action, but this needs to be kept under constant review and our next major review date will be in December.
“Crowds being permitted to return to sporting events is vital to the Union and indeed to the four Branches. In the absence of this, the funding and assistance that we have received to date from the Governments both here and in the UK have contributed enormously to our being able to keep the show on the road but it would be important that such support continues and indeed be enhanced if possible.”
Grace has been replaced as honorary treasurer by Patrick Kennedy, formerly the chief financial officer in Greencore and chief executive of Paddy Power, and currently the governor of the Bank of Ireland.
He has some juggling act on his hands.