Philip Browne admits IRFU has bought a limited amount of time
‘If we get to September and there’s still no clear line of sight well then we’ve got a problem’
The loss of the Italy Six Nations game at the Aviva stadium cost the IRFU up to €4 million in revenues. Photograph: Morgan Treacy/Inpho
IRFU chief executive Philip Brown. Photograph: Ryan Byrne/Inpho
IRFU chief executive Philip Browne admits that the Union has bought time in thus far preserving the 500-plus jobs under their payroll, but that no less than the rest of the global game, they face real cash flow problems in ensuring that they are still standing when rugby returns to our lives.
The IRFU’s staff, including the players in all four provinces, are working from home, in keeping with Government guidelines during the coronavirus epidemic, while graded salary deferrals have ensured their continuing employment.
“Preserving people’s jobs,” was the first of two objectives, according to Browne. “The second objective was to ensure that we’re still standing as a business at the end of all of this. We’re burning up cash, and this is all about cash now. Can you buy time in terms of cash?” Browne told The Irish Times on Tuesday, the day after he was one of almost 30 CEOs of unions and federations who took part in a conference call with World Rugby
There is only one solution. “Get back playing.” However, when that will be is, as Browne puts it, “a moving target”, which has obliged all stakeholders to look at varying timescales for manufacturing some kind of finale to the 2019-20 seasons, be they four-, six- or eight-week windows, or whatever. “It might be the first of June, the first of July or the first of August.”
Browne says there is a huge amount of work going on in the background, and holds out hope that something of the 2019-20 season can be salvaged.
“But the bottom line is that you can’t train or play rugby with the current public health guidelines and until those guidelines relax there’s very little that we can do other than do the right thing by society, which is follow the guidelines.”
As things stand, the IRFU have incurred losses amounting to €7-10 million in the current financial year, which ends in April, according to Browne.
“The loss of the Italian game to us directly was probably €3.5 to €4 million. In revenues from the Six Nations you could be talking another million or so for that particular match. Then the French match is a loss again of more revenue out of the central Six Nations pot. Certainly we’re looking at anything between €7 and €10 million.” Nor, he confirmed, are these losses covered by insurance.
In the interim, decisions will have to be made about the summer tours, with Ireland due to play a two-Test series in Australia, where a shutdown in all sports is compounded by airline companies screeching to a halt globally (Qantas and Emirates included) and the possibility of a different timeframe for the Covid-19 outbreak.
“And if there’s no July tour, does that turn into an August tour, a September tour or what?” says Browne. “There are so many moving parts it’s extremely complicated but we’ve got to make our best stab at trying to salvage something out of the potential wreckage.”
The IRFU are also losing out on revenue streams from what Browne calls “the pointy end” of the Champions Cup and the Pro14, namely the hiring of the Aviva Stadium and share-outs from the revenue streams.
This is also hurting the four provinces significantly, and as with them and the Union, the clubs have no incoming revenue at what is their most lucrative stage of the season.On Tuesday, the IRFU pledged €500,000 for the 220 or so clubs under their watch.
“Colin McEntee [the Union’s development manager] is putting together how that will work and he’ll be communicating that to the clubs, but the key thing was to establish what can we afford?”
“There’s all sorts of nonsense floating around. We sold Newlands and there’s millions under Philip Browne’s bed,” he said in reference to the sale of the IRFU site in Newlands for €28 million.
“The reality is that those monies were used to buy the offices that we’re in [Lansdowne Road] as a long-term investment, and the rent that is saved would then be put into the domestic game on an annual basis, so at least we had a bankable asset.”
The IRFU is deemed bigger than a small or medium business enterprise. “The big issue is cash, and we’re ‘the bank of last resort’ if you like for the provinces. We have a cash problem but equally the four provinces are going to have cash problems, some more substantial than others. So we have to think of them and we have to think of the clubs as well.”
At the moment, Browne admits, the IRFU are in the black. “But we’re burning up a lot of cash.”
So when does the Union’s cash flow problem become critical? “If this runs into next season then we’ve a real problem, and not only us but every other rugby Union has a real problem, along with the clubs in England and France.”
“We need a clear line of sight as to when this can be resolved, and we need it quickly to be honest,” says Browne. “If it was going to start in September, well that’s fine, we’ve a clear line of sight and we can manage that. If we get to September and there’s still no clear line of sight well then we’ve got a problem.”
“But most other businesses are in the exact same situation, and soccer is in exactly the same boat. It’s maybe a little bit more extreme for sport because it’s literally like a cliff edge. When you’re playing rugby the money is coming in, when you stop playing rugby the money doesn’t come in. It’s been quite an eye opener.”