IRFU bet on World Cup win
IRFU chiefs confirmed that through their relationship with sponsors Paddy Power, the union effectively takes out an insurance policy on the performance of the side during rugby’s global showpiece every four years.
The news comes following revelations that the English RFU have placed bets totalling around £250,000 (€284,000) via a consortium of bookmakers to cover player and management win bonuses should England be successful in New Zealand during September and October.
The practice is commonplace in sports and sponsorships around the world, according to experts.
IRFU spokesman Karl Richardson last night said that the policy of ‘hedging bets’ has been undertaken by the union for the past three World Cups for fear of a financial hit. Failure to do so he said would be ‘irresponsible.’
He explained: “The practice of insuring progression of teams in professional sport is as common as insuring private houses.
“The IRFU, through their relationship with sponsors Paddy Power, effectively takes out an insurance policy on the performance of the team during the World Cup to allow the union to offset and minimise the financial outlay during the tournament. The Ireland team is the financial engine that supports all levels of rugby in both professional and domestic levels and the loss of revenue of no November games, bonuses and other financial outlays related to progression in the World Cup means that the IRFU would insure themselves against this.”
He added: “This is prudent governance. It would be irresponsible of us otherwise.”
However, IRFU chiefs were tightlipped last night when asked to outline the cost they would incur if Declan Kidney’s side progressed to the latter stages of the tournament.
Neither the IRFU nor the RFU have broken any rules as it is not betting, but rather paying a premium to a broker who guarantees a return on the investment if they are successful.
If the RFU were to cover estimated potential win bonuses of £2.25m (€2.55m), current England odds would require a premium of £250,000 (€284,000).
An RFU spokesman explained the situation in England: “I am sure that we, as a professional and responsible sports governing body, are not alone in ensuring we minimise our financial risks at all times, including around tournaments such as the Rugby World Cup.
“We are not directly placing money with bookmakers, but rather hedging our risk with an insurance broker. It is financially prudent so that we can continue our investment in the grassroots of the sport, which last year totalled more than £21m (€23.86m). The details of any such arrangement are confidential.”
Meanwhile, the FAI have confirmed that they do not engage in the practice of betting on the national team’s success to cover bonus payments to players.
“No, we don’t do it and we have no plans to do it,” said a spokesman.
Instead, to cover bonuses which would be agreed with the players — who, in contrast to their rugby counterparts, are not contracted directly to their national governing body — the association relies upon the payment of additional monies built in to key sponsorship deals.
These are designed to kick-in upon qualification for a major tournament, such as next year’s European Championship finals in Poland and Ukraine.
It’s understood, however, that it’s standard practice among the sponsors themselves to make their own insurance arrangements to offset the pay-out of such bonuses.
John Trainor, managing director of leading sponsorship industry experts Onside Sponsorship agreed.
He said: “The world of golf have been particularly strong players in this area. Retailer Golfsmith promised free TaylorMade drivers if Sergio Garcia won the Masters and purchased an insurance policy against the odds of Garcia winning the event and so avoided the risk of (losing) millions.
In a similar promotion, Wilson Staff offered free clubs to anyone who purchased them within a certain time frame around the US Masters Tournament if Pádraig Harrington won the tournament.”
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