Munster Rugby not at any more of a financial disadvantage than other provinces

Munster’s repayments on the €11.7 million loan it received from the IRFU towards the €42m redevelopment of Thomond Park in 2008 no longer appears to be the millstone it has been perceived to be in some quarters. Photo by Sam Barnes/Sportsfile
Munster’s repayments on the €11.7 million loan it received from the IRFU towards the €42m redevelopment of Thomond Park in 2008 no longer appears to be the millstone it has been perceived to be in some quarters. Photo by Sam Barnes/Sportsfile

Munster Rugby is set to break more new ground this month as the ongoing Covid-19 restrictions mean the Branch’s Annual General Meeting goes online.

Usually held at the end of the season, once the trophies have all been won and as the province’s professional players take their well-earned breaks on sun-kissed beaches around the world, the AGM ushers in a new Branch President and lays out the financial state of play with the publishing of accounts for the year ending the previous June 30.

This year will be very different, and though the accounts will not reflect the upheaval of the current pandemic, the projection given at last June’s AGM for the year ending June 30, 2019, estimated a cash-flow deficit of €995K, similar to that reported for the previous season.

What future accounts will show is anyone’s guess given the disruption to 2019-20 and the uncertainty that still surrounds a safe resumption of rugby in Ireland and the readmission of spectators but despite recent predictions of a financial meltdown, Munster appear to be satisfied that the changing and challenging landscape in which rugby finds itself does not put it at any more of a disadvantage than the other provinces.

Certainly, Munster’s support base has not eroded due to the public health emergency and if anything it has been galvanised by doomsday scenarios portrayed by some media outlets and warnings from IRFU chief executive Philip Browne that Irish rugby was “spending tomorrow’s money today” in order to survive in the current climate of no matches and zero income.

When Munster announced last Wednesday that it was open for Supporters Club membership renewals for 20-21 having delayed the process at the start of lockdown in mid-March, it reported a 96 per cent renewal rate of those who responded within the first 24 hours while the Irish Examiner has seen a number of tweets from members expressing their decisions to forego the offer of refunds or credit towards next season as a result of the final home games of the season being lost to the shutdown and any rescheduled games being played behind closed doors on resumption.

“In terms of uptake of membership renewals it’s extremely positive,” Munster head of communications Fiona Murphy said, “and equally, we’re hugely grateful for the fact that supporters are expressing their financial support for Munster Rugby as well by leaving their credit with the club in terms of what they paid for memberships and season tickets in 2019-20.

“That has been driven by supporters requesting to do so, we’ve facilitated that option and it’s incredible that they’ve followed through.” 

Similarly, Munster’s repayments on the €11.7 million loan it received from the IRFU towards the €42m redevelopment of Thomond Park in 2008, just as Ireland went into recession at the outset of the global financial downturn, no longer appears to be the millstone it has been perceived to be in some quarters. The debt has been reduced steadily and a restructured repayments schedule negotiated last year saw annual payments reduced from €500,000 to €100,000 on the outstanding €6.8m balance with no external borrowing involved in the project.

Indeed, Munster are understood to have made their 2020 repayment of €100,000 two months ago with the next instalment not due until April 2021 and the view within the province and at headquarters is that this is an entirely manageable sum that represents a small percentage of the annual running costs of a professional provincial set-up and that the current agreement is not a short-term concern.

Clearly Munster, like every stakeholder in rugby throughout the world, needs a swift resumption in the professional game to get revenue streams flowing again from sponsorship, broadcast and other commercial deals. Yet the PRO14’s recent completion of an investment partnership with CVC Capital Partners in exchange for a 28 per cent stake in the five-nation, cross-border league, has given its board members, of which the IRFU is one, some leeway.

The deal is worth £30m to Irish Rugby with the IRFU phasing payments from CVC over three seasons, starting with a £5m downpayment made on completion last May 22. The four provinces were expecting an equal share of the dividend from Lansdowne Road with Munster CEO Ian Flanagan telling the Irish Examiner in January that the windfall would be used to "futureproof" them as sustainable businesses.

The goalposts may have moved in the short time since that interview but the principle remains the same. While a date for this month’s Munster AGM has yet to be confirmed and changes are expected to the format aside from it being held online there will be some familiar elements. A new president will take office, with Nenagh’s Seán McCullough succeeding Tralee’s Michael Keane, and the long-running saga of the sale of Thomond Park’s naming rights is sure to be raised. It is likely the AGM delegates will be greeted with an answer similar to the one given when the subject was raised during May’s online Supporters Club State of Play forum. 

Dave Kavanagh, who joined Munster in January from the Six Nations as head of commercial and marketing, said: “Naming rights for Thomond Park is very much on the cards for Munster. We’ve seen how well it works in other sports and in our own sport both here and abroad and it’s very much a part of the modern sports landscape.

“So getting the right partner on board for Thomond would be great for us and it would help maintain and enhance Thomond and improve the fan experience on a matchday which is hugely important. So yes, it’s of significant interest to us and it’s very much underway at the present time.”  

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