Munster Rugby may be in financial straits but it could be much worse if it wasn’t for the IRFU.
The southern province, 10 years on from its initial Heineken Cup final success over Biarritz, last night forecast a cash-flow deficit of €1.95 million for the year ending this June 30 and it still has a €10 million loan with the game’s governing body in Lansdowne Road following the 2008 redevelopment of Thomond Park.
Yet it has been given considerable relief on the debt in the form of loan negotiations, including a holiday from this year’s repayment of €200,000 and €1.1m in additional grant income.
“We have held numerous meetings with the IRFU over the past four months and will continue to work closely with the IRFU with the aim of getting Munster back on a sound financial footing,” Munster’s financial controller Philip Quinn told delegates during last night’s Munster Branch AGM at Young Munster RFC in Limerick.
“We’ve made no capital repayment to the IRFU this year and our interest has been a five-figure sum,” he told the Irish Examiner. “Because of our current situation we’re working with the Union. They came to us and said we’ll deal with that as part of the long-term plan.
“We’re able to meet all of our third-party commitments and that’s the key thing for us. Any bills that come in from third parties, we can pay them. What we need to do is work with the IRFU over what we owe them.
“We were due to pay €200,000 this year but the IRFU haven’t asked us for that money. They asked us for the interest but we’re talking €50-60,000 interest, which is the deposit rate that they’d be getting on the €10 million.”
Quinn said Munster were continuing to suffer from gate income declining since the province’s heyday in the latter half of the last decade, but were making money in Musgrave Park.
“With the additional events such as concerts and the Nitro Circus coming up, we’re doing well on our ticket sales for the matches. And it’s the same in Thomond Park, we’re making revenue out of it. There’s a small cash-flow deficit in Thomond but we’re talking small numbers on it.
“What’s crippling Munster is that our gate income has dropped significantly. Our player costs have gone up but the IRFU have given us additional grant income to offset that increase, although they haven’t covered it in full.”
“But when your gate income drops by €2.7m over six years, that’s where our problem is.”
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