The IRFU have warned Ireland’s four provinces they can no longer rely on the governing body to bankroll player wages or to keep them out of financial trouble.
As player salaries continue to rise rapidly throughout the European game, Ireland’s provinces have been told they risk being left behind unless they can get creative financially — or develop their own players to compete with the best English and French money can buy.
Speaking at the IRFU’s annual general meeting in Aviva Stadium yesterday, Chief Executive Philip Browne revealed that each province was given an extra €250,000 each last season to assist with ‘the difficulties experienced by all in the player contracting market’.
But on the back of a year in which the Union saw increased income from the Rugby World Cup, these increased costs - as well as €9.4m owed by Munster Rugby — the IRFU could only come close to breaking even.
“All is changed in the European rugby environment with the growing dominance of those clubs in France and England with deep financial pockets,” Browne said.
“The size and quality of the playing squads these clubs can assemble from around the world has changed the balance of power in Europe to the detriment of our Provinces and the IRFU who simply cannot match the playing budgets of these teams.
“It is becoming increasingly clear the professional game in Ireland can no longer rely on the IRFU being the ‘lender of last resort’ as the IRFU no longer has the capacity to absorb the increasing cost of the professional game.” Thanks to increased broadcasting rights revenue and Rugby World Cup income, the IRFU reported a 2015/16 turnover of almost €76m, with €61.7m coming from the international team alone.
But there was an increase in player and management costs across the same period of close to €6m, resulting in the near breakeven in terms of net cash.
With the Irish province’s unable to compete at the very top table when it comes to salaries, the message from the IRFU to the provinces is now ‘make your own’.
Yesterday saw the announcement of an additional investment in player development of €1.2m for the 2016/17 season, following an increase of €800,000 for the 2015/16 season budget.
Tom Grace, IRFU Honorary Treasurer, said: “It is no secret the increased revenues available to French and English clubs are having a serious inflationary impact on player remuneration. The Union’s response to this is to increase the player funding going forward for the provinces but more significantly to invest greater amounts into our player development pathways from the grassroots game upwards.
“For 2016/17 we have enhanced the domestic game investment by a further €1.2m. It is the view of the Union these investments in our game represent the most effective way forward for the Union given the financial constraints under which we operate.” Browne agreed: “The risks to the Irish professional game are potentially profound and one of the key mitigation strategies is to invest in our pathway to develop better quality players more quickly through a more effective pathway – a key element of the new High Performance strategy.”
While Leinster and Ulster have been able to supplement marquee player salaries with private investment and creative sponsorship deals, the overall TV money and budgets available to English and French league teams dwarf even those two.
The revenue that comes from the Guinness PRO12 must be increased, according to Browne, who says the clubs must reassess the competition’s structures.
“An extension of this new European order is the difficulty that faces the PRO12 as a competition operating in Ireland, Scotland and Wales – three rugby markets which are a fraction the size of those in England and France,” he said. “The revenues generated by the tournament need to increase significantly if the participating clubs are to remain competitive with the clubs in the English and French leagues. Such an increase in values will require some radical change to the tournament and how it is structured.”
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