Premiership relegation cost London Irish £3m
THE cost of relegation from the Premiership is starkly illustrated by London Irish declaring losses of almost £3m for season 2016/17 – prompting auditors to warn of ‘material uncertainty’ over the club’s ability to survive.
The Exiles’ reliance on benefactor-in-chief Mick Crossan, chairman of controlling party Powerday PLC, is made clear in the club’s latest accounts, which reveal turnover plummeted from £8.8m in 2015/16 to £6.8m during their year outside the top-flight.
That £2m shortfall, along with a 38 per cent decrease in commercial income (down to £1.7m from £2.7m), a 41 per cent drop in attendances to an average of just 4,705 in the Championship and a 54 per cent reduction in matchday takings, led to overall losses of £2.95m.
Although Irish made savings of £1.4m on their wage bill, which totalled £6.2m, down from £7.6m during their 2015/16 relegation campaign, a decline in season ticket sales (down 29 per cent) and rugby income (down £700,000) contributed to the deficit.
With Irish also carrying liabilities of £17.8m, auditors Brebners warned: “The Company remains dependent on the continued financial support of London Irish Consortium (2013) Limited and its ulti-
mate controlling party Powerday PLC. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.
“These conditions indicate a material uncertainty exists that may cast doubt on the Company’s ability to continue as a going concern.”
It is understood Crossan is close to securing further investment that would secure Irish’s immediate future. However, with another stint in tier two looming, losses for the current campaign are likely to be equally high.
Within their accounts, Irish stated: “Forecasts show continued losses for at least the next 12 months. Inevitably there is a degree of uncertainty as to the exact level of such losses.”
While Irish mull a move back to London, with ground-sharing possibilities at Brentford FC and Wimbledon FC being mentioned, their recent history has been pock-marked with coaching changes that have created off-field instability.
Since Brian Smith took over from Toby Booth as director of rugby in 2012, Irish have been through five head honchos with Glenn Delaney, Tom Coventry, Nick Kennedy and, most recently, Declan Kidney all taking charge.
Irish can still rely on central funding next season, having banked £4.4m during their campaign in tier two, but with Ealing investing heavily for a title push, promotion from the Championship would be far from guaranteed.
London Irish declined to comment.