Munster ready to balance books next year

For years, there had been a reliance on IRFU assistance to facilitate loan repayment negotiations on the debt arising from the Thomond Park redevelopment,

Munster ready to balance books next year

Munster Rugby is on course to break even next year after announcing at last night’s AGM in Tralee that the province expects to maintain its cash-flow deficit under €1m for the year ending June 30, 2019.

The AGM saw Tralee RFC’s Michael Keane succeed Ger Malone as Munster branch president while treasurer Tom Kinirons was due to deliver the financial accounts for the year ending June 30, 2018, which showed a cash-flow deficit of €920,000, with the current year’s deficit forecast to be €995,000.

For years, there had been a reliance on IRFU assistance to facilitate loan repayment negotiations on the debt arising from the Thomond Park redevelopment, with €6.8m still to clear, and exceptional grant income from the governing body to get the province out of a financial hole following the failure to reach the European knockout stages in 2014-15 and 15-16.

In June 2016, Munster announced a deficit of €1.9m but acting chief executive Philip Quinn, the province’s head of finance and operations, has told the Irish Examiner he believes the province will now be in a position to balance the books a year from now, if Johann van Graan’s team can match its performances this season in reaching the semi-finals of both the Guinness PRO14 and Heineken Champions Cup.

“We’re now in a place where, next year, we should break even,” said Quinn.

“That’s the first time I can say that. We’re often asked at our AGM, ‘What’s your budget for next year?’ and we say it’s probably going to be the same as this year, around a €1m loss.

“We would be confident we’ll have a break-even next year. That would be a fantastic position and allows us to go the next step again.

“In fairness to (outgoing head of commercial and marketing) Doug Howlett and the commercial team, they’ve really driven our revenues and that’s lost sometimes when you stand up at an AGM and announce we’ve made a loss.

“But that’s just professional rugby. Look across the UK, there’s nobody making a profit out of rugby save for one or two exceptions like Exeter but you can see the big losses being made elsewhere.

“For us as Munster Rugby, we have to get to break-even, simple as that.

“The IRFU have been fantastically supportive but it’s imperative Munster gets back to a position where we are standing on our own two feet. We don’t want to be going to the IRFU any more than they want us coming to them.

“That’s the bottom line from our perspective. We want to run our ship but correctly and on a secure financial basis, we feel we’re now getting to that point,” said acting chief executive Philip Quinn.

“I couldn’t have said that for the last five or six years. We could have been looking at projections of €3m losses on an annual basis when we looked at this about three to four years ago but €1.9m was our big deficit in 2016 when we didn’t perform on the pitch.

“So it’s easy for me to say we’re going to break even but if we don’t perform we won’t break even.

“We’ve shown if we don’t invest in the professional team the revenues go down. That’s what we saw those years ago and it’s a really fine balance.”

Quinn explained this year had seen an additional 13% investment in the professional team in the form of renewed contracts as well as the absence of a home Champions Cup quarter-final, believed to be worth €500,000 in revenue, a figure which would have halved the deficit at a stroke. There was also a reduction in the exceptional grant income from the IRFU, agreed in 2015-16 when the province was struggling on the field.

That Munster maintained their deficit under the €1m mark in such circumstances was down to a significant increase in attendances, up 15% and gate income, up 12%, including a hosting in Cork of the Ireland U20s home games during the Six Nations Grand Slam campaign, which has led to a two-year extension with the IRFU for 2020 and 2021.

Sponsorship rose by 15% while the new artificial surface at Musgrave Park, installed last summer, has resulted in a 200% rise in the Cork stadium’s revenue, generated by the rental of the pitch and six summer concerts, starting with George Ezra next week.

Also significant was the reduction in 10-year ticket sales. Initially launched in 2008 to help finance the Thomond Park redevelopment, they came to an end in the reported financial period and while there was a reduction in take up for the next 10-year period from 3,000 to 1,500, that freed up premium seats for match-by-match sales and helped stimulate regular revenuesas opposed to the up-front and once-off payments from 10-year ticket holders.

Of the €5.2m received from those 1,500 10-year tickets sold, €2.6m went to reduce the Thomond Park development loan from the IRFU, while the other half will be released in equal proportions into the Munster accounts on an annual basis over the next decade.

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