IRFU ANNUAL COUNCIL MEETING:CONSIDERING the global recession IRFU honorary treasurer Tom Grace put Irish rugby's historic season in even greater context at yesterday's annual general meeting when stating: "From a financial point of view gentlemen, (this season's success) couldn't have come at a better time."
The union were able to display the Six Nations, Grand Slam, Triple Crown, Magners League, Heineken Cup, Churchill, Quaich and Millennium trophies in the Ballsbridge Court hotel in Dublin.
Grace’s report 12 months ago adopted a cautionary tone, correctly predicting a dark financial period ahead, but after such unprecedented achievements at international and provincial level this past season, the IRFU were able to pause for some congratulatory reflection as they announced a surplus of €1.9 million from the 2008/09 campaign.
The move out of last season’s deficit (€90,083) was primarily down to the return of the November internationals, which yielded two full houses at Croke Park, against Argentina and New Zealand – which was Ireland’s sole defeat. These matches were not on last year because of the IRB World Cup in France.
International rugby income (including gate receipts and broadcasting income) has improved from €26 million to over €32 million due to the return of the November fixtures but this is offset by the increased €3.8 million expenditure in professional game costs.
Cash is king over the next year, Grace stated, as we will become a borrower and no longer a lender in the coming years.
Concerns remain in this recessionary period. Exchange rate movements with sterling combined with general economic conditions are hurting the union’s commercial income of €7.2 million, which is down €560,000.
This is particularly reflected in the decline in advertising revenues and an increase in bad debt provision, wrote Grace in his report.
The cost of developing the new Lansdowne Road (known as the Aviva stadium) ensures the union will move into debt and remain so until 2013.
The union is now making sizeable contributions on a monthly basis and whilst it is reassuring to note the €38.3 million the union had in cash at year end, there is a capital commitment of €77.5 million in respect of the stadium.
As a result, the 38.3 million will be depleted over the coming months.
The IRFU remain confident that the stadium will be completed on schedule in April 2010, with the first match to be played in August most likely be a composite encounter. All payments to date have been made by both the union and Football Association of Ireland.
A pension liability of €1.05 million, which was only €5,000 a year ago, is a result of the substantial decline in the world financial markets. Like many companies, the union is considering its options in relation to the scheme, Grace noted.
It is also worth noting the increase in player and management costs as Ireland continue to remain competitive with the salaries being paid in Britain and France. This increase is partly due to the increased international management team under Declan Kidney.
Other unforeseen costs were the homecoming celebrations after the Six Nations, while Ireland renewed their sevens rugby interest by a dramatic increase from €27,987 to €294,909 (there was no expenditure on sevens rugby in 2007). This may be influenced by the possibility of sevens rugby being adopted as an Olympic sport later this year.
Grace also took the opportunity to thank the Government for their continued support and the support of former minister Charlie McCreevy’s tax break for Irish professional sports people who finish their career in Ireland.
This tax break, however, remains under threat in the current climate.
Meanwhile, John Callaghan became the first member from Armagh RFC to be enrolled as president of the IRFU. He succeeds John Lyons.
Keeping with tradition, the two nominations from Leinster, Munster and Ulster were voted on to the committee, with Connacht’s Eamonn Feely, unsurprisingly, missing out.
