The IRFU have warned the Irish provinces they will not continue to plug the gaps in their finances.
With the provinces looking at further budget deficits next season, IRFU honoury treasurer Tom Grace has said that the current situation "is not sustainable long term and must be addressed."
Grace warned that the provinces would have to manage their budgets to return to the black. “It is not the Union’s usual practice to budget for a deficit and we expect to return to break even next season however it is important to note that a number of the provinces will be budgeting for a deficit this season but that is not sustainable long term and must be addressed.”
The IRFU announced a deficit of €2.8 million for the 2016-2017 season, the first time there’s been a shortfall since the 2007-2008 season. The union had allowed for a planned deficit of €4.7 million but came in €1.9 million under budget because of strong performances on the pitch by the national and provincial teams, prize money, ticket sales and an increase in sponsorship revenue.
A statement from the IRFU read: “In April 2016, the IRFU agreed to budget for a deficit of €4.7m to address the immediate funding difficulties facing all four provinces due to player cost inflation and the need to continue investment in the grassroots game and player development.
“This represents the first time that the Union recorded a deficit since the 2007/08 season however it is anticipated that the IRFU will return to a breakeven situation no later than 2018/19.”
Tom Grace, IRFU Honorary Treasurer elaborated on the deficit in his report to the AGM. “The Union and provinces had a good year off the field and this has fed into the Union’s financial result for the year with the €2.8m deficit being some €1.9m better than budgeted.
"The combination of prize money and an increase in (sponsorship) contract amounts outweighed the negative impact of exchange rates on Six Nations broadcasting income. Against budget total revenues were €2.9m ahead due to strong Guinness Series gates, impressive Six Nations hospitality, prize-money and share of (European Cup) gates.
“With regard to expenditure costs increased by €8.3m to €79.4m due to a combination of factors. The €3.5m increase in professional games costs is due to no tour taking place in 2015/16, match costs for a full Guinness Series together with the Chicago match, insurance costs, player and management bonuses and increased funding for the provinces.”
