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IRFU face challenges as Covid-19 causes merciless financial damage

By Frank Quinn
SIMILAR to all other sporting bodies the current Covid-19 pandemic has had a serious impact on the finances of the IRFU. Their Annual Report for the 2019/20 season has not made comfortable reading. Following on the surplus of €28 million-plus at the end of the last season, Honorary Treasurer, Tom Grace found himself giving a more difficult report as he faces his retirement from the post after 13 years of valued service.
“The last six to eight months have been extraordinary and outside the experience of most, if not all of us, and not surprisingly this has had a significant impact on our accounts,” said Mr Grace in his report. “Normally at this point I would be saying that Rugby World Cup distorts our result when compared to the previous year but this impact is dwarfed by the effect of Covid-19 and the change to our accounting period.”
The situation is indeed serious. According to the report, the IRFU “suffered a deficit of €35.7 million for the accounting period, after income fell from €87.5 million to €79.2 million and expenditure increased from €84.2 million to just under €115 million. In respect of expenditure, Grace highlights the effect of the three additional months of payroll costs, which impacts many of the Union’s cost centres.
“Gate receipts fell by c. €5.8 million for the IRFU in the 2019/20 season due to the replacement of the normal Guinness Series of three Test matches at Aviva Stadium with two Rugby World Cup warm-up matches in August 2019, while the postponement of the Ireland v Italy fixture in the Guinness Six Nations last March due to Covid-19 had a further significant impact.”
On a brighter note the report added: “We have been very fortunate that almost all of our commercial partners have maintained their financial relationship with us throughout this crisis and we are profoundly grateful to them for their support.”
A change to the IRFU’s accounting period to 31st July – to align the financial year to the actual season which now stretches to July to accommodate the Summer Tour and also to get closer alignment with Branch year ends – means the 2020 financial statements cover a 15-month period.
Domestic and community game costs are up by c. €3 million for a number of reasons, including the appointment of four Women’s Development Managers, the club Covid-19 emergency fund and the effect of three additional months of payroll, while grounds costs increased significantly due to three additional months of license fees paid to Aviva Stadium, together with floodlighting costs carried out at Kingspan Stadium in Belfast.
Commenting on the Annual Report, IRFU Chief Executive, Philip Browne, said: “It is no surprise that Irish Rugby has experienced one of its worst financial years ever. Covid-19 will continue to challenge us all until a vaccine is available and we are very grateful to the government, our sponsors and our patrons for continuing to stand with us at a time where we are unable to fill the Aviva Stadium with our fantastic fans.
For our ‘finances aware’ followers, here is a breakdown of the finances from the report at the IRFU AGM 2020 ( Accounts to 31 July 2020) .
This is a 15 month account – from 1st May 2019 TO 31 July 2020, to coincide with the accounts of the four Provinces, this makes it difficult to compare with the previous accounts prepared up to end of April. Each year to date.
Income for the year ended 31 July 2020 is €79.2m – Down 9% from €87.5
Total Expenditure €115m
Deficit €36M
Bad debt provision 16m is 14% of total expenses And 44.5% of deficit
Total expenses (ex bad debt provision) €99m – €100
Expenditure
Professional and Elite rugby costs €62m. Is 62% of total expenses
Domestic and community Expenditure are €14 M (14%) €11.2 m in 2019
Administration €9.3M (9%)
Others select: Grounds 4M, Amortisation 2.2M, Marketing 2.2M, Depreciation 4M –
Total 12.4M (12.5%)
The €22m net gain from the sale of the site at Newlands Cross in Dublin was included in the April 2019 accounts. IRFU purchased their current offices from the land sale. The rent of the office was €350,000 per annum before the purchase. The first contribution of €5.5m (Ireland’s share) from the CVC investment in the Guinness PRO14 is included in the accounts. It may be followed by further contributions if they purchase an investment in the 6N also.
Schedule 3.
Professional game expenditure:
National tours and camps €300,000
National match costs €2.6M
Player and Management costs €45, 411, 633
Total €48,327,540
Elite Expenditure:
Women €2.5M
Seven’s €`1.2M
U20’s €569,000
Academies €3.7M
High performance unit €6M
Total expenditure €14M
Total Professional game and Elite expenditure €62M to 31 st July 2020,
This represents 62% of all expenditure (€100M – ex bad debt provision of €16M)
Referees expenditure is €700,000
Domestic and Community Rugby:
Club Ireland 111,000
Domestic community 225,000
General development costs €1,032,000 + additional 319,000
Coaching 309,000
Youths and Schools 867,000
YDO AND PROVINCIAL STAFF €5,554,774
Clubs and School support € 1,728, 563
Referees €560,000
COMMUNITY RUGBY AND OTHER FUNDING €2,812,758
Total €14,252, 864 (11.2M in 2019 and 10.6M in 2018)
Joint ventures;
50% stake in New Stadium DAC -Aviva, and in Thomond Park
New Stadium DAC, amortisation , Net Value €62M
Share of operating loss €1.7M
Share of Turnover €3.4m
Share of net Assets €77M
Disclosure on Thomond Park :
Share of loss €770,899
Share of fixed Assets €12.5M
Share of gross Liability €12.4M
Rent : New stadium DAC €750,000 per annum. Thomond Park €9,600 PA
Income to 31 July 2020
International income 28M
Commercial 13.6m
Amortised income 16M
Provincial income 16M
Total € 73.7M
Other income:
Rugby €278,000
Revenue Grants €4,478,528
Other €761,314
Total €5,518,009
Revenue Grants:
Rev. Comms, Temp wage subsidy 1.2M
HM Rev. STG £393,591
World rugby, Stg £ 170,000
Gov.-Dept tourism/ Sport €2.25
Sport Ireland €380,000
World Rugby Hi Perf. Mens 7’s €323,000
Investments;
Investment subsidy company (CLG)
Losses incurred in running the Womens RWC in 2017 €420, 736
Company to be wound up
Debtors & repayments:
Trade debtors €20.4M
Income received in advance €7M
PAYE / PRSI €8M
Deferred ticket Fund at 31/7/20 €52M
Deferred Naming rights Hibernia/Aviva Group from 2010, nil balance
Administration Expenses:
Governance €319, 519
Salaries / Pensions €4.6M
Rent , rates. Insurance, telephones €1M
Office maintenance €914,354
Professional Fees €1.7M
Total €9,315,751
Statement on Financial Position 31/7/ 20
Loans to Clubs 2M
Other Loans 6.7M
Joint ventures 62M
Investments 6M
Total €80M
Debtors/ repayments 10M
CASH AT BANK €28m
Total €38.4M
Creditors / accrued expenses 38.5M
Net current assets / Liabilities (€192,886)
Total assets less Liabilities €124M
LESS
Pension provision 4.8M
Income in advance 4.8M
Deferred ticket Fund 52M
Loans 1.6M
Deferred Naming rights Fund –Nil
Total €62M
Total €62M, Financed by IRFU Funds

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