IRFU issue €21m black-hole alert after announcing €7.3m surplus
The IRFU announced a €7.3m surplus at their AGM last night, but fired a warning shot across the bows of those attempting both to change 'free-to-air' broadcasting rules and curtail drinks sponsorship agreements.
After seeing their income boosted by success on the field for the Irish international side and the continued success of the provincial sides in European and domestic competition, the IRFU have outlined how the most severe threats to their financial well-being will come from off the pitch.
Proposed amendments to broadcasting and sponsorship legislation by Government could cost the IRFU at least €21m annually, as they have previously estimated that TV income (€12m) and alcohol sponsorship (€9m) are major drivers of their sport.
Yesterday, the IRFU reported a €7.3m surplus due to improved November Series – sponsored by Guinness – ticket sales and increased prize monies.
This was thanks to a better-than-budgeted-for finish following Joe Schmidt's success in leading Ireland to a championship in his debut season – although the year did end with a cash deficit of €1m.
Another strong representation from the Irish provinces – featuring three quarter-finalists and a semi-finalist in the Heineken Cup – helped to boost coffers.
The IRFU merely budget for one team reaching the knock-out stages, which equates to a payment of €420,000. But with three quarter-finalists, the last of whom reached the semi-finals, the IRFU received a minimum return of €1.68m.
All this success resulted in a smaller-than-expected cash deficit of €1m – compared to €4.5m in 2012/13 – after non-cash items, such as depreciation and amortised income (10-year ticket, five-year box sales and naming rights) were accounted for.
The strong financial performance, the IRFU explained, will allow for increased provincial and domestic game funding and an additional €1m investment in the Union's club loan scheme.
However, honorary treasurer Tom Grace urged caution based on the fragility of the wider economic recovery and the potential impact of changes to 'free-to-air' broadcasting rules and possible limitations to sports sponsorships agreements.
"As the economy slowly finds its feet, the Irish people continue to get behind their team and we were very pleased with the increased ticket sales for the 2013 Guinness Series," he said.
"Success off the pitch was matched by big performances on it and the RBS Six Nations prize money, in particular, has provided a welcome boost.
"The 2013/14 season demonstrated once again that supporting the national team at the Aviva enables the IRFU to continue to make significant funds available to the professional and domestic games."
Total revenues improved by just more than €4m to €69.7m.
International rugby income (which is made up of all gate receipts and broadcasting income together with revenues derived from the Lions tour) increased by €5.5m.
This reflects the fact that there were three home Six Nations matches in 2013/14 compared to just two in 2012/13. Gate receipts exceeded budget expectations by €1.8m due to higher-than-anticipated attendances for the Samoa and Australia matches.