Munster must shed its matchday revenue reliance - Ian Flanagan

Munster attract large crowds at home games but need to diversify their income opportunities going forward post Covid-19.

Ian Flanagan does not believe Munster Rugby will be at any more of a disadvantage in the post-pandemic landscape than its rivals but it is clear to the chief executive that significant changes in the way its business is conducted will have to be made.

Speaking yesterday against a backdrop of a suspended 2019-20 season and zero income since Johann van Graan’s team were mothballed at the start of the Covid-19 outbreak in Europe at the start of March, Flanagan’s job remit has changed dramatically since last September succeeding the late Garrett Fitzgerald as only the second CEO in the province’s history.

A resumption on the field on August 22 is eagerly awaited but when Munster renew hostility with their interprovincial rivals at the beginning of the end of the 19-20 Guinness PRO14 campaign, it will be at Aviva Stadium, not Thomond Park and for an organisation which Flanagan readily admits is “overly reliant on matchday income” at its stadia, the return of fixtures for the professional outfit to Limerick and Cork is essential to survival.

The new CEO, Leicester City’s commercial director during their unlikely run to the Premier League title in 2016-16, knew he had to change things from the minute he slipped behind Fitzgerald’s old desk at Musgrave Park and the current shutdown has merely focused minds on the task of weaning the province off its reliance on ticket sales, hospitality and all the other matchday revenue streams, which currently account for around 50 per cent of total turnover.

“There was a rule of thumb in sport that essentially it was a third, a third and a third in terms of (the split between) broadcast revenue, matchday income and commercial assets (such as) sponsorship,” Flanagan said.

“In the provincial game, we’re overly reliant in terms of how matchday income feeds into our overall revenues so that is a key. Irrespective of the pandemic and the current situation, in which no matches are taking place, that was a big priority for us, to grow the areas we technically control ourselves. The broadcast rights, we don’t control those as Munster, that’s a collective sell, so the area where we can make substantive change is the commercial rights and our own commercial and sponsorship revenues.

“That was always a core focus of mine from day one when I arrived, how we grow that portion of our revenues, and become less reliant on that matchday income piece. Obviously we’re starting, as of now, obviously still overly reliant on matchday income.”

Flanagan’s resumé - he brokered the innovative £40 million sponsorship deal between DHL and Manchester United for the Old Trafford giants’ training kit in 2011 - suggests he is the man to break new ground for Munster. Yet working under the IRFU umbrella poses different challenges and the governing body has signalled it needs to implement permanent 20 per cent pay cuts for players for them to fall in line with other members of staff who are set to begin a four-day week from July 1. Flanagan does not appear to be placing too much store in the Irish Government’s €40m emergency fund announced last Friday for the GAA, IRFU and FAI, being diverted towards payroll issues.

“From my side certainly, I have very little understanding of how that will be used,” he said. “Our understanding is that it is clearly an emergency fund to be utilised under strict conditions for specific purposes but it’s just been announced and we’ve had little guidance or understanding of what the detail is.

“In terms of everything else, you’ll be aware that all of the administrative staff in Irish Rugby have taken a pay cut which becomes operational on July 1. We’ve been operating on a partial salary deferment from April.

“Also a very significant number of our staff within Munster are on the Government wage subsidy scheme and that is something that we’re very grateful for, it’s a very welcome Government support. That scheme continues for July and August and the people on that scheme are working as normal. For everyone else, there’s going to be a reduction in hours and salary from July 1.

“We’ve had no direct input, essentially, in the ongoing discussion between Rugby Players Ireland and the IRFU. I will say that they’re having an open and transparent discussion which is ongoing and that has been a very open and very positive conversation, is my understanding.

“I think if you look around the world, it’s not just Irish Rugby that’s been impacted by this. We’ve seen similar measures to control costs, whether it’s in the form of salary deductions or pay deferrals right across the world. So I don’t think anyone is surprised that this conversation is taking place at the moment.

“Obviously our focus, like everyone else in Irish Rugby, is to ensure that we have a game to return to and we protect our people as best we can and that we come through this very challenging financial situation in the best shape possible to take to the field again when that’s possible.”