Two weeks ago, we looked at the IRFU revenue streams from recent years. It was an interesting review given multiple financial statement references to grant aid provided to Munster Rugby. Hawkeye Sidekick looks at the current financial position at the Irish province and areas where revenue stream opportunities could arise.
Financial roller-coaster
The financial affairs of Munster Rugby in recent years has been a roller coaster. The senior team’s struggles on the pitch in 2015 and 2016 seasons resulted in significant revenue losses.
Where it not for the IRFU to bail out the association, the losses would have been catastrophic and unsustainable. The three million loss figure bandied around was eased due to the IRFU financial intervention culminating in a 1.9 million euro loss in 2016.
Transparency
It is a small thing but a significant one. Munster Rugby website even though they have published articles on recent AGM’s do not provide the full financial report on their general website.
The word transparency comes to mind and perhaps the next financial statement could be posted on their website for full viewing. There should be nothing to hide from an organization standpoint on the finances now given the pandemic and financial conditions expected post this pandemic. Let’s see what transpires.
2019 Report Findings
The financial accounts for the year ending June 30, 2018, showed a cash-flow deficit of €920,000, with the 2019 deficit forecast to be €995,000. The financial shortfall is an improvement when you consider the dire straits the organization was in only a few years prior. When the AGM took place in Tralee last year, hopes were high that the club would break even this year. Cue Covid-19 and those aspirations will need to be readjusted.
The senior professional team fortunes are a massive factor in the revenue streams of the province and this was seen with an added 13% investment in the squad. Success on the pitch equals revenue generation opportunities. This comprised of contract renewals mostly. The lack of a home Champions Cup quarter final last season meant a potential 500 – 600k revenue shortfall. IRFU grant reduction was seen for this period.
The revenue streams in the province for this time period were encouraging. The Irish Independent Park redevelopment project with the 3G pitch saw Ireland U20’s fixtures held. General attendances increased by 15% and gate income by around 12% including those Ireland U20’s games in Cork.
Cork has become a key financial revenue stream for Munster Rugby and the financial key points from 2019 report saw a number of summer concerts there, revenue generation in the off-season so credit to the commercial / media side of the association for this.
The gate income was most welcome but what was of an immediate concern was the big retention drop of long term season holders. From the 2019 report findings, the ten year ticket scheme reduced by 50% (3000 to 1500). The organization used the fall off as an opportunity to sell these as premium seats which was fine then but now given the economic conditions may prove tougher to shift.
50% (2.6 million) from the ten year ticket sales went to reduce the Thomond Park development fund loan from the IRFU. The Thomond Park development was required but the financial overrun and loan costs were a disappointing aspect and was akin a massive financial burden to bear. Outside corporate investment to the association on this development was an option but was never fully explored or considered.
Revenue Considerations
Thomond Park: Naming Rights
Thomond Park naming rights has being on the discussion radar for sometime now and given the tricky financial conditions which the organization now will find themselves post this pandemic, this will need to happen. The Munster Rugby organization will need to maximize the naming rights to the fullest here. Venue global recognition instantly. The attractiveness of the side hopefully on the pitch should sway corporate investment here. It is required and no use saying otherwise.
Thomond Park: Off the pitch revenue streams in focus
Thomond Park is a venue which has seen precious little off pitch revenue generation. When you consider that Irish Independent Park is continuing to explore new avenues such as summer concerts, Thomond Park has languished behind.
Limerick’s outdoor gig and concert scene is focused around the Docklands, King John’s Castle and Milk Market areas. Thomond Park has being snuffed out of the party for now so the lure of more expos and conferences needs to now happen. The ability to schedule receptions and more hospitality events may need to be considered. Thomond Park needs to be far more active outside of match days, look at Exeter Chiefs and the Sandy Park model for a blueprint.
Cork: European Cup fixture scenario?
I have mentioned the need for Thomond Park to be used more in my paragraph but I sense that it is only a matter of time that Munster Rugby fixtures are taken out of Limerick for European Cup nights.
Leinster Rugby have played the proverbial blinder when it comes to match day revenue streams. They have identified Aviva Stadium as a venue to maximize revenue game day streams and Munster Rugby should be considering this as well.
Pairc Ui Chaoimh would be prime location for an European Cup game in the future. The rewards are there and the additional support base for these fixtures would be go hand in hand. Continue to build the brand and identity.
Scouting networks and reconnect with local clubs
The re-connection of Munster Rugby back to the local club rugby roots. The glory years of the province were built from the life affirming ties with local club rugby. Foley, Flannery, Wallace, O’Connell, O’Callaghan, Clohessy, Leamy, Stringer, O’Gara, Horgan tore strips off each other in club games and then galvanized and came together to perform in the provincial jersey.
People will say times have moved on but can Munster Rugby enhance their scout networking in the province both at schools and local club level? The answer is yes. There is always scope to improve underage talent identification. Combines in various regional centers of excellence a potential area to explore?
Indigenous player pool identification is required given the financial outlay required to acquire overseas talent. The Limerick underage situation is a worry and concern; does more investment need to go into the game in Limerick along with the rest of the province? Success breeding success.
Closing remarks
The financial situation of Munster Rugby is precarious. The deficit continues to be a source of anxiety and with the Covid-19 pandemic set to take Rugby Union fixtures out further into the back end of this year (optimistic), the revenue challenges become more profound.
There will need to be continued investment to improve the player talent depth chart to see improved results on the pitch. The lack of silverware for the senior men’s team now stretches nearly ten years now. The loyal support base continue to put into their pockets but if there is no let up to the Leinster Rugby dominance, then the fear is that Munster Rugby’s gate revenue falls and the organization spiral again into a financial tailspin. The pressure on van Graan, Larkham and Rowntree to deliver success even more now.
Massive work has been done behind the scenes in the province. The infrastructural upgrades in Cork a classic example, the commercial revenue activity has stepped up remarkably and kudos to the likes of Doug Howlett and team for providing the energy and drive to generate the revenue streams already.
However, it all comes down to senior men’s team success on the pitch and the global Munster Rugby brand needs success now on the pitch more than ever. Otherwise, all those revenue stream opportunities go by the wayside. Interesting times for Munster Rugby ahead!