Munster feeling the pinch as deficit passes €1.9m

Munster Rugby’s poor performances and falling attendances have seen its annual deficit forecast soar to almost €1.95 million for the soon-to-end financial year.

Munster feeling the pinch as deficit passes €1.9m

Delegates at last night’s Munster Branch Annual General Meeting at Young Munster RFC were told by Munster Rugby financial controller Philip Quinn that the forecasted figure had risen from a €333,000 deficit in the final accounts presented for 2014-15 as gate income fell by more than €1m during the season just ended.

Quinn said playing Pro12 games during last autumn’s Rugby World Cup, with two of those Thomond Park games against Ulster and Glasgow kicking off at 6pm on a Friday, allied to the failure of Anthony Foley’s side to reach the league play-offs had had a significant impact, not just on gate revenues but related bar and match programme income streams, although he reported hospitality revenue had remained constant year on year.

Another difficult campaign in Europe, which saw Munster open with Italian minnows Treviso and then play Stade Francais at home a week after being eliminated ahead of the knockout stages also hit the province hard, accounting for a sizeable chunk of the forecasted deficit of €1.92m.

The deficit comes despite continued assistance from the IRFU in the form of increased grants and a repayment holiday on Munster’s loan to finance Thomond Park’s 2008 redevelopment, save for interest-only payments in five figures.

It also comes for a period which saw an increase in sponsorship and income from commercial board activities but rises in professional team and other staff costs.

Quinn explained the deficit would have been much worse had it not been for an additional and recently approved €250,000 payment from the IRFU.

“What we’re forecasting is €1.95m. We were looking at €2.2m around February and March but the IRFU have given an additional support to each of the provinces and that was approved at their recent budget meetings so it has brought our cash deficit back to €1.95m,” he told the Irish Examiner.

“Our budget for the year was actually for a loss of €700,000 so we knew going into the year we would be making a loss. It’s all gate-related and there’s a mixture of factors. Europe was down about half a million from 14-15, when we averaged 24,000 in ticket sales. We were just under 20,000 in 15-16. The major drivers in that were having Treviso, which wasn’t great from a spectators’ perspective. Leicester was fine, we were at around 24,000 but then being knocked out before Stade had a massive impact again. We had 19,000 ticket sales for Stade and that has a €0.5m impact straight away.

“Then, when you look at the Pro12 side of things, we were down about €300,000. The kick-off times for Ulster and Glasgow on Fridays at 6pm were massive hits. We analysed our ticket sales by county and 71% of our ticket sales come from outside of Limerick. So once you have a poor kick-off time you’re eliminating the majority of our support. Those kick off times are absolutely killing us.

“Added to that you have the Rugby World Cup as well and we really suffered with having Ulster and Glasgow as well as Connacht when there was still a bit of a World Cup hangover. We did quite well late in the season when were fighting for the Champions Cup.”

Not qualifying for this year’s Pro12 play-offs meant the 2015 runners-up lost out on two big pay days while the province’s staging of an Ireland Wolfhounds game in January 2015 at Musgrave Park also made this season’s figures suffer in comparison to the previous year’s accounts.

“Last year we had the Wolfhounds game, which generated about €100,000 and (Pro12) knockout income of €225,000 from the semi-final and final last year, which we didn’t have this year.

“But the major ones were Europe and the Pro12 which was (a deficit from the previous year of) €800,000 altogether.”

Sponsorship, said Quinn, had increased by €400,000 on the previous year including shirt sponsors Bank of Ireland expanding their deal with new activations in the province’s domestic game while the commercial board had also reaped the rewards of a new patrons programme which encouraged donations.

“That’s really bearing fruit for us at the moment,” Munster’s financial controller said. “Doug Howlett is out as our corporate ambassador and getting patrons to support our academy and community rugby.”

More significant assistance, though is coming from Munster’s main paymasters, the IRFU. Quinn and honorary treasurer Tom Kinirons have had a series of meetings at Lansdowne Road with IRFU director of finance Conor O’Brien and treasurer Tom Grace which Quinn described as “positive”.

So while there are fewer Munster men on national contracts, forcing the province to pick up the tab on players previously funded centrally, the rising player costs, up €620,000 on 2014-15 to €4.48m, had been covered by €1.1m in additional IRFU grant income.

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