Friday 20 September 2019

RFU warn of 'challenging times' ahead as they release financial figures

The RFU faces challenging times
The RFU faces challenging times Newsdesk Newsdesk

The Rugby Football Union invested a record £107.7million in the English game in the last financial year but has predicted "growing uncertainty" and "challenging times" ahead.

That warning comes in the national governing body's financial statement for the year ending June 30, 2018 - 12 months that saw England's form decline on the pitch and the RFU post a £30.9million loss off it.

The current account deficit, however, was offset by a restructuring of the RFU's Twickenham hospitality business joint venture with Compass. That brought in a one-off profit of £31.6million, enabling the union to increase its investment in elite and grassroots game by 8 per cent and top up its reserves to £25.1million.

But the RFU's annual income fell by £12.5million last year and it has been forced to make 54 members of staff redundant.

Chief executive Steve Brown is not one of those but the RFU's former chief financial officer is currently serving his notice, having shocked the sport last month by deciding to quit.

In a conference call with reporters on Monday, Brown said he was leaving for his "own reasons" and wanted to do "some different things" in his life, but he denied he was abandoning a ship in choppy waters.

"I think the RFU is in a superb place and is in great shape to adapt to whatever comes in the years ahead," said Brown. But he also admitted the RFU will need "to pull back a bit" in terms of future investment and make "adjustments".

The reason for this was spelled out by RFU chairman Andy Cosslett in his introduction to the 2017-18 financial statement.

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After seven years of revenue growth in a "buoyant market", Cosslett explained, the "situation is changing and market conditions have been getting tougher".

Cosslett did not mention Brexit but he did say the overall financial outlook was uncertain and the sports rights market was tightening.

But he also suggested that the RFU had overpaid when it signed a £220million, eight-year agreement with the professional clubs to compensate them for international call-ups.

"We have to accept we signed some long-term commitments with the professional game which, while strategically important, now appear costly against updated revenue forecasts...they will reduce our discretionary investment going forward," wrote Cosslett.

In his summary of the accounts, Brown referred to 2017-18 as a "transition point" between a period of "high growth and investment in the game to a more challenging time".

He then laid out four areas of concern for the future: "growing uncertainty in the UK sports market", the "normal" loss that all non-host nations make in Rugby World Cup years, no one-off cash boosts on the horizon and the union's contractual obligations to the professional game.

Speaking to reporters, however, Brown said the RFU was "more efficient" now as it had reduced its costs for the third year in a row and the Twickenham East Stand redevelopment was completed on time and will pay for itself within seven years, despite costing "around £80million", up from an original estimate of £53.5million.

Brown put the annual loss down to the simple fact that England only had two home games in the Six Nations and the costs associated with the redundancy programme.

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