The IRFU Annual report showed a healthy surplus of €7.3 million in the year 2013/2014. Yesterday we looked at some opportunities arising out of the international game. Today we continue our look at the report by focusing on the commercial revenues derived away from the international team.
A key item in the Treasurer’s narrative is that commercial revenue was down €2.7 million on last year as a result of the non replacement in 2013/14 of the Puma kit sponsorship. The payout from Puma to end their contract before time was included last year and the figure will be restored in next year’s accounts through the new deal with Canterbury that will come into effect prior to the Autumn Series of Internationals.
That is a long term deal running through until 2020 and worth an estimated €20 million to the IRFU. It will also provide fresh impetus to marketing of the Green jersey and its sales ahead of the 2015 and then the 2019 Rugby World Cups.
O2 Into 3
Philip Browne‘s commentary in the annual report paid tribute to the “partnership with O2 (which) is hugely important to our game.” He also credited their “innovative and engaging programmes that increase the profile of our sport nationwide.”
The O2 brand has now been subsumed into 3 who have a longer relationship with the FAI.
Both of those agreements run until 2016 and the next two years will be an opportunity for the brand to weigh up the strengths and opportunities within each partnership.
There is no reason why both, covering different market segments, might not continue but at the same time there is no guarantee either.
Diageo’s commitment to rugby has been strengthened through it’s taking over the naming rights of the Guinness Pro12 tournament and it also seems firmly behind the Autumn Series of internationals though next year’s World Cup will likely mean a hiatus on the revenue that those matches deliver in terms of ticket income and sponsorship.
Beneath the top level the IRFU has built a strong portfolio of partnerships including with Volkswagen, Paddy Power, Ulster Bank, PWC, DHL, Lease Plan and others. The management of how these companies are able to leverage their association with the higher spending fans of the sport will be crucial in terms of keeping them engaged over the coming years. The additional income that may become available from the ‘squeezed middle class’ as the broader economy recovers should put the sport in a good position with regard to this.
Income from the Heineken Cup and the RaboDirect Pro12 in the past year was down slightly at €10.3 million and could have been lower but for the success of Leinster, Ulster and Munster all making it through to the knock out stages of the former.
It is likely though that TV and sponsorship income will rise significantly as a result of the new sponsorship of the Pro12 and even more so through the establishment of the European Champions’ Rugby Cup which promises to build on the monies drawn into the now departing ERC.
It is possible to see something of a tension in the treasurer’s reference to the fact that these income streams “go some way to offsetting the €23.8 million contribution that the IRFU makes to the four provincial teams and their academies.”
Tomorrow we will continue our analysis of the accounts by looking at the areas of club and other unit income and expenditure.