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Kevin Potts and Thelma O\u2019Driscoll walked into the IRFU Suite yesterday to face a collection of seven journalists ready to explore the Annual Financial Accounts of the Union.<\/p>\n
It is far from the post-match press conference or the Captains run, but as quickly became apparent, it is of vital importance, arguably more than the result of any one game.<\/p>\n
The basic message was that Irish rugby is financially \u201cfairly solid\u201d, but only if the game can learn to live within its means.<\/p>\n
The IRFU\u2019s latest accounts show an operating deficit of \u20ac4.2 million, sharply down from the \u20ac18 million reported last year. Yet the union\u2019s chief executive and chief financial officer were clear that the underlying challenge hasn\u2019t gone away.<\/p>\n
\u201cWe\u2019re in a fairly solid position. We\u2019ve managed our finances pretty well over the decades,\u201d said Kevin Potts, chief executive of the IRFU. \u201cWe don\u2019t have any debt, and we have cash reserves of \u20ac62 million\u2026 but the challenge the game faces is sustainability on an annual basis.\u201d<\/p>\n
Strong balance sheet, fragile margins<\/p>\n
On paper, the numbers look reassuring. The IRFU has no debt and net assets of \u20ac81.6 million.<\/p>\n
Cash reserves of \u20ac62.6 million \u2013 largely money paid up-front by 10-year ticket holders \u2013 give Potts and O\u2019Driscoll some room to manoeuvre.<\/p>\n
But that cushion can be deceptive.<\/p>\n
\u201cThe reason we\u2019ve \u20ac62.6 million is that\u2019s our 10-year tickets taken in up front,\u201d explained Thelma O\u2019Driscoll, the IRFU\u2019s chief financial officer. \u201cThat reserve isn\u2019t free money \u2013 it\u2019s all committed future income, released into the accounts year by year.\u201d<\/p>\n
Strip out non-cash depreciation and exceptional costs, and the cash deficit is closer to \u20ac0.5 million. Still, over a four-year Rugby World Cup cycle, the IRFU has racked up cumulative losses of close to \u20ac30 million, largely driven by the season in which the traditional November Autumn Internationals disappear in favour of a World Cup.<\/p>\n
In that context, Potts said breaking even \u2013 not making a profit \u2013 is the strategic goal.<\/p>\n
\u201cWe\u2019re not in the business of making profits. Everything goes back into the game,\u201d he said. \u201cNext year, because of the Chicago game and a very successful Lions tour commercially, we\u2019re confident we will break even, but then the following year, the same challenge.<\/p>\n
In 2027 we have another Rugby World Cup, so we lose the autumns and we have that challenge again.\u201d<\/p>\n
Sevens cut, \u20ac5m savings target<\/p>\n
The most visible \u201ctough call\u201d already taken was the axing of the men\u2019s sevens programme, a move that has drawn criticism from within the game.<\/p>\n
On Wednesday, Potts put a number on it.<\/p>\n
\u201cThe men\u2019s sevens programme saved \u20ac1.2 million net,\u201d he said. \u201cThat enabled us to invest additional funding into our women\u2019s fifteens programme and is already helping programmes that are now active in the male pathways in Munster, Connacht and Ulster.\u201d<\/p>\n
But more is coming.<\/p>\n
\u201cStraight up, we need to reduce our cost base by approximately \u20ac5 million,\u201d he said. \u201cBecause we have a robust balance sheet it\u2019s not urgent \u2013 we can transition over the next 18 months \u2013 but by the beginning of 2027\u201328 we should have an annualised saving package of roughly that amount.\u201d<\/p>\n
O\u2019Driscoll described a painstaking cost review. \u201cEverything has been questioned. We cut the men\u2019s sevens, which was a big call, but there are no other big-ticket items \u2013 it\u2019s squeezing every single line. We were already a reasonably lean organisation.\u201d<\/p>\n
Around half of the savings, Potts hopes, can come from administration \u2013 new accounting, HR and procurement systems, shared purchasing with provinces \u2013 but he was blunt that the rugby side will not be untouched.<\/p>\n
\u201cWe will need to find something across rugby,\u201d he admitted. \u201cIf you talk to high-performance people the response is, \u2018You\u2019ll risk performance.\u2019 On the development side, you impact participation programmes. Anything we look at is a challenge.\u201d<\/p>\n
Ticket prices, \u201ccorporate day out\u201d and the Aviva debate<\/p>\n
If cost-cutting is one side of the equation, raising revenue is the other \u2013 and that is where the IRFU is drawing the most public fire.<\/p>\n
Category A tickets for Tests at the Aviva now reach \u20ac160, an increase of roughly 80 per cent over 12 years.<\/p>\n
\u201cTicket pricing is critical to us,\u201d said O\u2019Driscoll. \u201cWe have five or six games every year that we have to maximise our revenue on, but at the same time we need to balance that with affordability for fans.\u201d<\/p>\n
She stressed that prices were benchmarked against other unions and sports by an external consultant, and that an internal committee structure now sits over ticketing. \u201cYes, they sound expensive, but we do have to push the revenue on these games and we\u2019re comfortable with where they\u2019re sitting.\u201d<\/p>\n
Potts pushed back strongly at the familiar accusation from one of the journalists present that Aviva internationals have become a \u201ccorporate day out\u201d.<\/p>\n
\u201cYou keep using that phrase corporate day out. I don\u2019t agree that it\u2019s a corporate day out,\u201d said Potts. \u201cThe majority of our tickets go to our clubs\u2026 To be constantly calling it a corporate day out, I don\u2019t think it\u2019s fair to the fans who are there.\u201d<\/p>\n
He insisted ticket allocations to provinces and clubs are unchanged since the Aviva opened in 2010, and said he believes similar numbers still travel from rugby heartlands like Limerick, Galway, Cork and Belfast.<\/p>\n
On whether the union should sacrifice some value in the Aviva naming-rights deal in order to free itself to play more often at 82,300-capacity Croke Park, Potts was unequivocal.<\/p>\n
\u201cThis is the home of Irish rugby,\u201d he said.<\/p>\n
Chicago complaints and the US growth gamble<\/p>\n
The controversial return to Soldier Field in Chicago \u2013 heavily criticised by travelling supporters for its poor stadium experience and TV production \u2013 came up.<\/p>\n
Potts acknowledged \u201cdefinite failings\u201d in the match-day production but stressed that the wider US strategy remains central to the union\u2019s plans.<\/p>\n
\u201cThere were definitely failings in Soldier Field which we all saw,\u201d he said. \u201cBut the game itself in terms of the match-day revenue would be on a par with what we would generate here. What entices you there is what you can do off the pitch\u2026 the discussions and coming together of people who might have interest in supporting Irish rugby or New Zealand rugby, and events run on behalf of various governments.\u201d<\/p>\n
Earlier reports had suggested a possible annual Ireland\u2013New Zealand fixture in America; Potts clarified that the aim is annual games in the US, not necessarily against the All Blacks, as part of World Rugby\u2019s strategy to grow interest before the men\u2019s and women\u2019s World Cups in 2031 and 2033.<\/p>\n
Crucially, he said US games would be \u201cadditive\u201d \u2013 a fourth Test rather than a replacement for a full house at the Aviva \u2013 thanks to Ireland\u2019s central contracting model, which offers flexibility outside Regulation 9 release windows.<\/p>\n
Betting on the Nations Championship and broadcast \u201cgreen shoots\u201d<\/p>\n
If there is one area where Potts is more upbeat than in previous years, it is broadcasting.<\/p>\n
\u201cThe values of broadcast have stagnated and fallen back for rugby over the last five or six years,\u201d he said. But he now sees \u201cgreen shoots\u201d linked to the new Nations Championship, which will sit alongside the Six Nations and Rugby Championship in the global calendar.<\/p>\n
\u201cI\u2019m more optimistic,\u201d he said. \u201cThe whole reason we need to look at something different in relation to the Nations Championship is to improve broadcast values. The narrative that every fixture matters, destination finals, innovation around the games \u2013 we believe it will attract more fans and engage younger audiences.\u201d<\/p>\n
He conceded there is \u201ca balance between tradition and generating revenue,\u201d and admitted as a lifelong rugby fan he loves three-Test summer tours. \u201cBut we have to make a change, otherwise we\u2019re not going to be able to generate the revenues the game needs in the professional era.\u201d<\/p>\n
Women\u2019s game and the domestic footprint<\/p>\n
One of the more striking numbers in the accounts is the \u20ac9.4 million invested in the women\u2019s game \u2013 up \u20ac1.1 million year-on-year and more than quadruple the level in 2020\u201321, a figure that has drawn praise even as questions persist about where the money comes from.<\/p>\n
\u201cWe could probably allocate about \u20ac4 million of revenue to it,\u201d said Potts. \u201cThe home games we\u2019re hosting in Ireland are beginning to generate a profit, but investing in the women\u2019s game is still a requirement for the medium and long term.\u201d<\/p>\n
He was frank that \u20ac9.4 million is \u201cprobably the maximum the IRFU can invest\u201d from its own resources for now; further growth will need government and commercial backing.<\/p>\n
On the grassroots side, the union spent \u20ac14.2 million on domestic and community rugby \u2013 up around 18 per cent \u2013 plus \u20ac2 million in one-off grants, much of it co-funding development officers with the provinces and supporting infrastructure projects such as club walking tracks.<\/p>\n
It is this web of commitments \u2013 elite men, women, and community game \u2013 that underpins Potts\u2019s insistence that funding pathways for the men\u2019s XV will continue to take priority, as long as around 80 per cent of total revenue still flows from the national team.<\/p>\n
Squeezed from all sides<\/p>\n
Against a backdrop of private equity interest, rival concepts such as the proposed World 360 league and a new World Club Championship, and financially distressed leagues elsewhere, Potts portrayed Ireland\u2019s position as relatively robust but far from comfortable.<\/p>\n
\u201cWe\u2019re constantly looking at ways to make sure we maximise the value of the limited international weekends,\u201d he said. \u201cWe work really collaboratively off the pitch and compete on it.\u201d<\/p>\n
For now, the story of Irish rugby\u2019s finances is one of a strong balance sheet, shrinking deficits and increasingly hard choices. The union is gambling that Chicago trips, a reimagined global calendar and a booming Nations Championship will bring in the revenue needed to keep the national team at the top table \u2013 while supporters at home, staring at \u20ac160 ticket prices, decide how much they are willing to pay to keep it that way.<\/p>\n
Image Credit: IRFU and Dan Sheridan, Inpho.ie<\/p>\n
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