THE IRFU HAS reported a €35.7 million deficit in its report for the 2019/20 season as CEO Philip Browne warned that if crowds cannot return to attend games in person in the coming 12 months, the union will have to “drastically” cut its budget.
Browne also revealed that the IRFU has had to step in to pay the four Irish provinces’ share of player and staff wages on loan terms due to Munster, Leinster, Connacht, and Ulster’s inability to cover the costs at present.
The Aviva Stadium in Dublin will have no fans present for Ireland v Italy tomorrow.
This means a movement in bad debt provision of just over €16 million, according to IRFU honorary treasurer Tom Grace, who stands down from his position this year after 13 years in the role.
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The IRFU had recorded its best-ever financial year in 2018/2019 with a surplus of over €28 million but the situation has changed dramatically since, with the union confirming that the four professional Irish provinces are also in financial crisis due to Covid.
The union’s deficit of nearly €36 million is partly due to a change to the IRFU’s accounting period to 31 July in order to align the financial year to the altered rugby season, meaning the 2020 financial statements cover a 15-month period.
But the financial impact of Covid-19 has been severe and Browne said the IRFU is now doing its best to “buy time” in a financial sense until some level of normality can return.
Without fans attending home games, the provinces have been unable to pay their share of player salaries, leaving the IRFU to cover the full costs.
Players in Ireland are already on a 10% salary reduction – along with a further 5% salary deferral until December – but the IRFU has scope to increase that to 15% if certain financial markers are not met.
The IRFU has also so far opted against entering contract negotiations with leading players such as Tadhg Furlong, Iain Henderson, and CJ Stander, whose deals expire next summer, due to the uncertainty ahead.
Browne warned that “whilst the provinces and the IRFU are currently solvent, that ultimately is a time-limited situation and unless there is a return to some level of normality within the next 12 months, with matches being played in front of some reasonable level of paying spectators, the IRFU and the provinces will have to drastically cut their budgets to ensure costs are covered by the lower revenues.”
The IRFU CEO also underlined that the recently-restarted professional game “is in a fragile state and a major outbreak of the Covid-19 virus could set us back.”
Browne said that the IRFU and its four provinces are facing “an unprecedented cashflow crisis” and highlighted that the situation “is exacerbated by the overwhelming reliance on spectators and gate receipts at that level.”
The IRFU’s annual report for 2019/20 is available in full here.
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IRFU suffers €35.7 million deficit as Irish rugby tries to 'buy time' financially
THE IRFU HAS reported a €35.7 million deficit in its report for the 2019/20 season as CEO Philip Browne warned that if crowds cannot return to attend games in person in the coming 12 months, the union will have to “drastically” cut its budget.
Browne also revealed that the IRFU has had to step in to pay the four Irish provinces’ share of player and staff wages on loan terms due to Munster, Leinster, Connacht, and Ulster’s inability to cover the costs at present.
This means a movement in bad debt provision of just over €16 million, according to IRFU honorary treasurer Tom Grace, who stands down from his position this year after 13 years in the role.
The IRFU had recorded its best-ever financial year in 2018/2019 with a surplus of over €28 million but the situation has changed dramatically since, with the union confirming that the four professional Irish provinces are also in financial crisis due to Covid.
The union’s deficit of nearly €36 million is partly due to a change to the IRFU’s accounting period to 31 July in order to align the financial year to the altered rugby season, meaning the 2020 financial statements cover a 15-month period.
But the financial impact of Covid-19 has been severe and Browne said the IRFU is now doing its best to “buy time” in a financial sense until some level of normality can return.
Without fans attending home games, the provinces have been unable to pay their share of player salaries, leaving the IRFU to cover the full costs.
Players in Ireland are already on a 10% salary reduction – along with a further 5% salary deferral until December – but the IRFU has scope to increase that to 15% if certain financial markers are not met.
The IRFU has also so far opted against entering contract negotiations with leading players such as Tadhg Furlong, Iain Henderson, and CJ Stander, whose deals expire next summer, due to the uncertainty ahead.
Browne warned that “whilst the provinces and the IRFU are currently solvent, that ultimately is a time-limited situation and unless there is a return to some level of normality within the next 12 months, with matches being played in front of some reasonable level of paying spectators, the IRFU and the provinces will have to drastically cut their budgets to ensure costs are covered by the lower revenues.”
The IRFU CEO also underlined that the recently-restarted professional game “is in a fragile state and a major outbreak of the Covid-19 virus could set us back.”
Browne said that the IRFU and its four provinces are facing “an unprecedented cashflow crisis” and highlighted that the situation “is exacerbated by the overwhelming reliance on spectators and gate receipts at that level.”
The IRFU’s annual report for 2019/20 is available in full here.
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Covid-19 IRFU Tough Times worrying times