Heineken Cup organisers in the red

THE Dublin-based company responsible for organising the Heineken Cup suffered a loss of €874,978 last year.

Accounts for European Rugby Cup (ERC) Limited, filed recently at the Companies Registration Office, showed that the company had made a profit of almost this amount the previous year.

No reason was given to explain the loss, although the company's overall cost base for the year to end June 2003 increased by €1.6 million to €33.4 million. Annual turnover was down slightly at €32.48 million.

Even with the 2003 loss, the company remains profitable, with retained profits of €2.05 million and cash balances of €1.09 million.

A breakdown of the income figures shows the company, which is owned by the rugby federations of Ireland, England, Wales, Scotland, France and Italy, derives the bulk of its turnover from television rights agreements, which grew year-on year from €21.09m to €22.5m.

Sponsorship turnover decreased by 5.5% to €8.9m, while it booked a foreign exchange loss of €518,290.

The six rugby unions shared €27.5 million in donations, but the accounts do not give a breakdown on what each country received from the ERC. The overall donation figure was an increase on the €26.2m paid out in 2002.

The expenses for company's directors fell from €273,140 to €210,748. The ERC employees 11 people in its Dublin office apart from the directors.

The accounts list its primary activity as the promotion of rugby union football and, as a sporting activity, it is exempt from paying corporation tax in Ireland.

Each of the rugby federations name two people to the board, which is chaired by the 47-times capped French centre Jean-Pierre Lux. The firm is run by Ireland's Derek McGrath.

The Heineken Cup, and the company, have grown enormously since the tournament was first established in 1995 with 12 teams taking part.

Mr McGrath was appointed the first chief executive of ERC Limited four years ago.

The boost in the popularity of the Heineken cup has swelled the coffers of the member federations and provided much-needed investment into the game.

Aside from the Heineken Cup, European Rugby Cup Limited also runs the European Challenge Cup and the Parker Pen Shield.