Reds to tackle €1m deficit

Munster Rugby chief executive Garrett Fitzgerald last night promised a programme of “cutbacks and savings” as the Munster Branch unveiled a projected deficit of more than €1 million for the year ending June 30, 2012, at its Annual Delegate Meeting in Cork.

In April, Fitzgerald predicted a six-figure loss to the Irish Examiner but has seen the estimated figure creep up to €1,052,000 as the province has battled lower than expected attendances during the World Cup last autumn, a higher than expected hike in interest rates on its repayments to the Irish Rugby Football Union on its loan to redevelop Thomond Park and the lack of income-boosting concerts at the Limerick stadium.

“We always knew it was going to be a difficult year and we predicted a loss,” Fitzgerald said before the AGM at the Sunday’s Well clubhouse in Musgrave Park.

“All of these issues have brought us to a position we don’t want to be in but that’s the reality. We have had a number of good years previously that have put us in a position to carry it but it’s not something we can sustain long-term.”

Munster’s financial controller Philip Quinn told delegates that the draft budget deficit for 2012-13 is considerably lower than this year’s projection at €185,000 and that the branch had to “spend money better” in future in order to meet those targets, while in answer to a question from the floor said the issue of selling naming rights for Thomond Park or individual stands at the stadium was at the “top of the agenda”.

Chairman of the branch finance committee Declan Madden also revealed the IRFU was not prepared to renegotiate the repayment of the outstanding €10.2m balance on the Thomond Park redevelopment loan but the branch was due to meet the governing body on the matter next month.

Recognising that success on the field drives financial security off it, Fitzgerald said budgetary objectives would be met without diluting the tools, expenditure and recruitment objectives available to incoming head coach Rob Penney.

“We will make some cutbacks and savings without affecting rugby on the field with a view to the season after this breaking even. I think it is achievable but it will be a lot of hard work and a lot of it is influenced by the economic climate.

“You need a little bit of luck also and results are important given that about 60 per cent of our income comes off gate revenues, so that’s a big factor.

“There’s definitely an optimistic outlook. When I started this job 10 or 12 years ago we were in positions relative to this and you should always be optimistic and if you run your business properly you just have to make the necessary cuts to spending if income isn’t increasing and that’s what we’re going to have to do.

“We’ve made the decisions about what we have to do and at the same time we have to try and remain competitive on the field because what happens on the field ultimately generates income.

“There’s no intention of diminishing our product on the field. The way rugby is run in Ireland is different to other countries. Look at the Heineken Cup draw today, you have clubs like Saracens and Racing Metro with outside investment and losses in the millions. We can’t carry stuff like that and we never will.

“Our attendances are bigger than theirs on a lot of occasions so that gives you an idea about the importance for them of individual investors. But that’s not the way Irish rugby is run. If you’re running a business you should be proud enough to try and make it pay for itself.”

The Munster Branch AGM also saw the election of new president Stan Fuller from the Munster Association of Referees, who succeeds Midleton RFC’s Denis Kelliher. Thomond’s John Hartery steps into Fuller’s role as vice-president with Michael Goggin the new junior vice-president.