Safe hands at the wheel as IRFU braces itself for perfect storm

A perfect storm appears to be enveloping Irish rugby and the IRFU. A club game in debt and in crisis; the unremitting economic climate as evidenced by the €26 million shortfall in the sale of five and 10-year tickets at the Aviva Stadium; the loss of Ireland’s kit supplier and reduced ticket prices for the autumn Tests, and meanwhile the French vultures are circling to pick off more of Ireland’s marquee players.

At the apex of this storm, of course, is the huge schism that is threatening to tear the game apart, and the specific threat to the Heineken Cup, which – economically and spiritually – has probably been more of a godsend to Irish rugby than any of the other participating countries.

The IRFU brace themselves with a safe pair of hands at the wheel in Philip Browne. True to type, rather than presenting radical or dynamic plans for the future, Browne's central message is that the union will hang tough, stick to its principles and its avowed solidarity with other unions, while riding out the storm with the help of a bank loan to see out that €26 million shortfall.

Inevitably, there is no ignoring the latest developments in the ongoing row over the future of European club rugby, and the broadsides from the unholy alliance of the English and French clubs. “At the end of the day we’re going to work within rugby as we know it. If they want to go beyond the pale that’s their business.”

Although English Premiership Rugby League have stated they will not attend the ERC mediation talks on October 23rd, according to Browne, discussions are continuing behind the scenes, suggesting that Rugby Football Union chief executive Ian Ritchie is acting as a go-between.

“They talk to their unions and we’re talking to their unions as well and we would hope common sense will prevail, and that people understand that if what you want is a vibrant competition in Europe, formatted in a way that suits everyone and a fair distribution, I think all of that can be delivered. I think what cannot be delivered is effectively a governing structure which blocks units out.”

The €26 million shortfall announced at the union's agm last summer in the sale of five and 10-year tickets came despite reverting to 2003 prices of €5,500 and €9,000. "It means that effectively we will have to cover that funding gap by borrowing."

Come on sale
Further tranches will come on sale in 2016 and 2018, before the premium seats in 2020. "At that stage we want to be back on an even keel again," says Browne, who says he is not overly concerned by taking out the loan. Helpfully, the IRFU's debt towards the Aviva Stadium has been paid off.

There were four years left on the Puma kit deal when the sports manufacturers withdrew from their deal (worth a reputed €40 million-plus over seven years) with the IRFU. Puma paid a severance payment of €11.5 million and will continue to supply kit for the remainder of this season. Browne is “pretty confident” that a new kit sponsor “will be nailed down within the next couple of months”. That said, this too will see a reduction on the outgoing deal with Puma. “The Puma deal was a fantastic deal and it will be difficult to repeat that deal,” admitted Browne. “But we will get a good deal. The Irish brand is a strong brand.”

Last summer’s agm also revealed a drop in “cash flow” from a surplus of €2.5 million to a deficit of €4.5 million, largely due to a reduced return on meritocracy payments from the Heineken Cup, only two autumn Tests and two Six Nations games at home.

Given all of this one wonders how the IRFU can afford to continue paying its leading players at the going rate. Browne admits the union cannot compete with multi-millionaire club owners if they offer what he calls silly money. “But what we can do is try and bridge that gap by offering our players here something which they can’t get in France. In France they’re not going to get the same sort of welfare and the same sort of management of their playing time and health and well-being as a player.”

In his book Becoming a Lion, Johnny Sexton claimed that the IRFU's initial offer had been a modest increase on his previous €150,000 per year salary, and that "if they'd come to me with this offer last summer, I would have grabbed it".

“Who knows?” says Browne, not denying Sexton’s version of events other than hinting Sexton’s agent, Fintan Drury, wasn’t always as quick to respond as they would have liked. “We’ve been to the table early in the past, and we’re at the table at the moment. Different agents operate in different ways. It takes two to tango ultimately. It doesn’t when you start. It requires responses from the other side as well.

"One of the things we have learned out of the whole situation over the last 12 months is that really we would like to meet more regularly and directly with the players themselves. The relationship between the union and the players is actually held at provincial level. That's where they train and where they are based, and to some extent that's a disadvantage to us."

Out of contract
Into this category would fall Seán O'Brien, Jamie Heaslip and Conor Murray, who are all out of contract at the end of the season with no imminent sign of them being tied down to new contracts. "Discussions have commenced some time ago with agents in relation to quite a number of players."

While losing marquee players to France would save money, that is a “two-edged sword” according to Browne as it would hit crowds and performance levels within the provinces. “Ultimately that impacts us as well, because in some respects we’re the bank of last resort.” The provinces have also generated tidy bonuses for the union. For example, by winning the Heineken Cup in 2011 and 2012, Leinster alone generated in the region of €3.2 million in meritocracy payments for the union.

The provinces are permitted to top up a base salary of €100,000 for non-international contracts from the monies they generate from within. But why not allow Leinster to top up contracts with the likes of Sexton, O’Brien and Heaslip? “No, because all you are doing is driving an international inflation, and that is not to our advantage. As I say, who is the bank of last resort? It’s us. So if there’s no incentive for a province to mind their costs and they can lash out money in the full knowledge that the IRFU can bail them out, that’s not a very sensible route to go.”

“We have to maintain four competitive teams. Now if we end up in a situation where everybody gravitates to Dublin because that’s where the population is and the money is, we’re actually dismantling the system that we have.”

In contrast to Leinster, and no less than the recent revealed €450,000 shortfall in Connacht, the Munster branch that won Heineken Cups in 2006 and ’08 recorded a loss of €1 million two seasons ago, which Browne admits is a huge concern.

However, the prospective loss of €5-6 million per annum though the demise of the Heineken Cup would assuredly make it financially improbable for the IRFU to sustain four provincial teams, in which case Connacht would probably be the first on the cliff edge.

“We want four professional teams because it’s much easier for our national coach to select from a wider playing base of professional players,” said Browne, who hailed the appointment of Pat Lam and how Connacht are becoming more self-sufficient through the work of their professional games board in leveraging untapped commercial markets out west.

“From our point of view, we want four provinces. If the world gets turned on its head and all the rest of it, then of course we will have to look at everything, but that means everything. I don’t think it’s a case of that (axing Connacht) is the easy option. There’re lots of things.”

The union has managed to maintain an investment of €9 million per year into the domestic/club game. The professional game is costing about €30 million per year, including the provincial academies, and the vast majority of the IRFU's annual €60 million turnover is generated by the international team. Hence, everything in the system is geared toward ensuring the Irish team remains competitive, and from a largely home-based squad.

Business rationale
"That actually is the whole business rationale for the way we structure the game. We made that decision in 1997. We said: 'Do we think we can have a competitive national team if our players can only play professional rugby outside of Ireland?' And the answer was, and still is: 'no, we don't think so. Therefore we have to have a professional game in Ireland'."

When he first joined in 1992 as an administrative assistant, he was one of half a dozen on the full-time staff. "The job description was anything from tea boy to what it was, which was assistant secretary. I was the first sort of middle manager." He became the union's secretary in 1995, and has been their chief executive since 1998, with the staff in Lansdowne Road now numbering 50, with 350 employed by the union across the provinces. However, it's doubtful whether Browne and the union have ever faced such a perfect storm in his time as chief executive, with a doomsday scenario looming.

Good model
"We will do our damndest to make sure that doesn't happen, and that's our raison d'etre. We think we have a good model here. We have a professional game that works, is competitive, looks after its players and is progressive. We have a club game which people may do down, but there is some real growth in the club game, maybe not in the more established clubs particularly in the metropolitan areas."

“But we bring competitive teams, we bring colour and we bring an international dimension that would otherwise not be there, at European Cup level and international level. And for the Six Nations to continue being the economic engine driving international rugby that it is, it requires competitive international teams.

“The day that that ceases to be the case, then we have a problem. And it’s not just our problem, it’s England’s problem and it’s France’s problem as well. So there’s some security in the fact that we’re all in this together in terms of the unions.”