The grave financial problems facing Munster are mounting.
The reality of Munster’s grave financial position was laid out for all to see at the province’s AGM last night, when their Financial Controller, Philip Quinn, forecast Munster Rugby would record a deficit of €1.9 million for the year ending 30 June 2016.
Although this figure represents an improvement on the €2.2 million originally anticipated, it remains far in excess of €330,000 deficit recorded at last year’s AGM. On Munster’s website, Quinn cited reduced gate receipts and increased player costs for the reasons behind the massive increase.
We had a significant reduction in our gate income, some of which was down to the impact of the Rugby World Cup in addition to unfavourable kick-off times for certain high-profile games in Thomond Park such as Glasgow, Ulster and Leicester.
Combined with the on-field performance, this resulted in a significant drop compared to previous seasons. Player costs continue to rise due to competition from overseas and in line with market demand.
Perhaps the most worrying aspect of Munster’s financial position, is the fact that 71% of ticket sales are now generated outside of the Limerick area. This means supporters are travelling great distances to attend fixtures in Thomond Park.
Consequently, if results do not improve under Rassie Erasmus next season, those fans might not be inclined to continue travelling to the famous stadium, putting further pressure on Munster’s already strained finances.
Although Munster managed to generate just short of €800,000 in sponsorship during this financial year, it now seems almost certain that Munster’s CEO, Garrett Fitzgerald, will have to ask the IRFU for a bail out. Something that was alluded to by the IRFU’s CEO, Philip Browne, last month in the Irish Independent.
The difficulty for Munster this year was, there was effectively almost a perfect storm. There were issues around trying to get the gates to hold up during the World Cup…
Then there was a lot of bad results before Christmas, and inevitably, what they had budgeted for the rest of the season had to be altered, and their forecast had to be adjusted.
We’ve seen what the outcome of that has been in terms of the financial difficulty.
Equally, Rassie Erasmus has come in now to help on the coaching side, and we’ll be working very closely with Garrett to try and sort out the off-pitch side of things.
On a more positive note, Quinn maintained that Munster had been able to retain their star players, and despite the negative forecasts, the province have budgeted for ‘the recruitment of suitable overseas candidates and this will not change’.
Alan Drumm, Pundit Arena