Philip Browne, Chief Executive of the Irish Rugby Football Union, has warned that the IRFU can no longer be the “lender of last resort” for the professional game as the governing body does not have the capacity to absorb ever increasing player wage inflation.
In the IRFU’s 2015/16 Annual Report, Browne outlined the challenge facing Irish professional rugby following significant changes in the economics of northern hemisphere club rugby.
“All is change 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 that 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.”
Increases in television rights fees and private investment in both the UK and French markets have put the Irish provinces at a disadvantage and Browne has called on the PRO12 to increase its revenue streams to ensure that Irish teams can remain competitive.
“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 added.
“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.”
Browne believes that although there is some scope for the Provinces to increase gate receipts revenue this will not be sufficient in bridging the gap with their English and French counterparts and the revenue generated by the IRFU through the international game is already largely contracted out for the next number of years.
“It is becoming increasingly clear that 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 as Irish Rugby struggles to respond to the inflating player market in England and France,” said Browne.
“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.”
In a separate release minutes earlier on Friday, the IRFU outlined how they had increased funding for the four provinces last season and for the upcoming campaign.
The Irish Rugby Football Union provided an unbudgeted additional €1m in the 2015/16 season to the provinces (€250,000 each) to assist with the difficulties experienced by all in the player contracting market.
The increase of almost €6m in player and management costs arises, in large part, from the necessity to provide against operational amounts due from the Munster Branch, in light of their current financial difficulties, together with the aforementioned additional funding for all four provinces and various other items.
The Union recorded a surplus of just over €5m for the 2015/16 season driven by increased broadcast monies and revenue generated by participation in Rugby World Cup 2015. Over the same period costs increased by almost €5m from €66.2m to €71m ensuring the Union achieved a close to breakeven result in net cash terms.
Again demonstrating the importance of the Ireland team in generating income to support the game at all levels in Ireland, income generated through the national team amounted to €61.7m or 81 percent of the IRFU’s total revenue.