WE’RE SPENDING TOMORROW’S MONEY TODAY
IRFU burning through cash as financial impact of Covid-19 on Irish rugby is revealed
THIS is Philip Browne’s 22nd year in the hotseat at the IRFU. Since 1998, the union’s chief executive has overseen the running of the professional game in this country with a calm and considered approach.
Browne has been at the helm during some turbulent times but the Covid-19 pandemic is undoubtedly the greatest challenge that he and the IRFU have ever encountered.
Yesterday’s briefing to the Irish media — over video conference, of course — was suitably grim. Browne didn’t mince his words or dress up the figures yesterday. Irish rugby is trying to survive in unprecedented times.
With the game at a standstill for the best part of 10 weeks, the IRFU and the provinces are burning through cash and there is little in the way of funds flowing in.
The moral implications of selling off a 28 per cent stake in the Pro14 to CVC, the Luxembourg-based private equity firm, have been set aside for now. The most important figure is the €33.5million cash injection that the IRFU are set to receive from that deal over the next three years.
There is €5.6m of that fund already sitting in the IRFU bank account, a timely boost in this coronavirus-imposed recession. They sorely needed that. Browne also revealed that the IRFU stand to lose something in the region of €15-20m if Ireland’s postponed Six Nations games (against Italy and France) and autumn international meetings with South Africa, Australia and Japan are canned this year.
The geo-political nature of this global health crisis means that is very likely. Should the doomsday scenario play out and the 2021 edition of the Six Nations is also struck off then the IRFU stand to lose €30m.
Playing games behind closed doors will reduce that blow somewhat but the losses will still be seismic without gate receipts. Add in the fact that the men’s national team accounts for 80 per cent of all IRFU revenues and you begin to see the scale of the problems facing Irish rugby.
It wasn’t all doom and gloom yesterday, however.
Confirmation of the interprovincial series behind closed doors, beginning on August 22, was a significant boost. The plan to stage that derby series in Aviva Stadium is subject to Government approval of course.
The road to the final stage of that roadmap on August 10 will be a rocky one. There are many obstacles to consider.
We haven’t even got to the thorny issue of players and backroom staff who may feel it is too soon to return to the field.
It’s also worth pointing out that Ulster operate in a different political jurisdiction which further complicates matters.
Seeing the likes of Munster and Leinster lock horns will be a significant morale boost to a nation starved of live sport in recent times, but it won’t solve the IRFU’s cash crisis. Far from it.
Yesterday, Browne outlined the challenges ahead in the coming years to rebuild from the financial ruins of Covid-19.
‘Well, the first thing is some of the cash we’re using is actually cash which would have been effectively from the next 10 years,’ he explained.
‘In other words, any monies that would have been received around premium seats (in the Aviva). So, we’re spending tomorrow’s money today in order to keep afloat. Fundamentally, what we’re going to have to do is adjust our cost base and there’s no way around that.
‘There’s going to end up being a pretty severe market adjustment within professional rugby around the world. You’re already seeing some of the implications of that.
‘The reality is we’ve got to live within our means.
‘We would hope that (our revenues) would improve. CVC getting involved in the Pro14 will start to bear fruit in terms of generating additional revenues there.
‘The Six Nations, we are obviously looking to ramp up things on that front as well in terms of funnelling TV rights where we can between the Six Nations and autumn internationals.
‘There are things that we can do and we’re already in train in terms of trying to being in additional revenues in an environment which at the time was probably plateauing in terms of the traditional media environment.
‘Obviously in a post-Covid environment, it becomes even more important that we generate those additional revenues but equally important is we’re going to have to readjust our cost base.’
There’s also the small matter of Ireland’s postponed summer tour to Australia and whether that would be accommodated later in the year. Then there’s the November Tests. A ‘second Six Nations’ has been mooted on the proviso that the southern hemispheres are unable or unwilling to travel to Europe in November.
There’s also the the Pro14 playoffs and the European Champions Cup knockout stages which remain in the balance. And that is before the English and French clubs, who will want to have their say on what the post-Covid calendar looks like, are factored in.
‘We’re looking at a whole variety of options,’ agreed Browne.
‘Nothing has been cast in stone as yet. By and large, what we’re spending the time concentrating on is what sort of number of weekends have we got?
‘And then if we understand the number of weekends we have available then there are many different formats of competitions you can put together, from cup competitions, to Six Nations home and away to goodness knows what.
‘If there are other European teams or other teams that can travel, there are other things we can do. There’s a whole variety of options. The issue is trying to get to a point where we can make some decisions.
‘In terms of the autumn internationals, we have a bit of time, we don’t have to make decisions quite yet.’
The behind-closed-doors experiment is already in full swing across the globe with South Korea’s K League and the Bundesliga leading the way on that front.
The NRL — Australia’s rugby league competition — and New Zealand’s Super Rugby Aotearoa tournament are on course to return in front of empty stands in the coming weeks as well.
But the million euro question is when professional sport can start getting spectators through the gates again. In the new normal of social distancing, the sight of
“The reality is that we have to live within our means” “There will be a pretty severe market adjustment”
thousands of fans packed into a stadium seems a long way away at the moment.
The interpros in August are merely the starting point.
‘I think that’s part and parcel of really what we’re talking about is we need to actually start. We need to actually get playing,’ Browne added.
‘And part and parcel of the assumptions starting on the 22nd, 23rd of August is the assumption that we’re going to be playing international rugby in October, November. The issue will be is what matches are we going to be playing?
‘And, secondly, in what sort of conditions are we going to be playing in the stadium? Is it behind closed doors or with a minimum attendance or full attendance?
‘That’s what’s happening elsewhere, around the world of sport. Certainly, in the initial stages it is likely to be behind closed doors.’
Nothing is certain at present and that is the major worry.