The IRFU’s Annual Report published on Friday showed overall revenue rising from €76.1 million to €76.5 million in the year ending in April 2017.
Rising expenditure though, from €71.0 million to €79.3 million, led to a first annual deficit for the sport since 2007.
Part of this was down to a near €2 million increase in professional fees, mainly associated with the bid to host the Rugby World Cup in 2023 and which will hopefully yield a much larger benefit in future years.
The worrying more long term trend from the perspective of the union is the ever rising cost of the professional game.
Revenue from the international teams remains strong enough to subsidise the provinces, an essential action giving rise to the development of players that will go on to represent Ireland.
That said a budgeted figure of a planned deficit of €4.7 million, ultimately clawed back somewhat by increases in revenue through sponsorship and gate receipts was “unsustainable” in the long term in the words of Treasurer Tom Grace.
“There are still very real challenges facing us in the Rugby economy not the least of which is player cost inflation.”
“This is driven by the relative financial strength of the leagues operating in England and France compared to the Guinness Pro12.”
“With the appointment of a CEO for the Pro12 together with a dedicated support team a substantial effort is being made to address this deficiency and the next twelve months will give us a clearer understanding of the future of the competition.”
Building the attraction of the Pro12 is a key element and discussions over expansion to include teams from South Africa or the United States are clearly of importance to the IRFU at a strategic level.
The circle that needs to be squared is in how the provinces can budget to stay in the black while continuing to develop players and cultures capable of competing at the highest levels of European Rugby.
This year’s return to having two teams in the semi finals of the Champions’ Cup was a welcome one. The trick now though will be to continue having that as the standard rather than the exception and that is a high barrier to hit.
The coming years will present great opportunities for irish Rugby. We will know in November whether that Rugby World Cup bid has proven to be successful and one way or another that will have the biggest material impact on the sport over the short term.
There will also be a renewal or renegotiation of the naming rights for the Aviva Stadium which still form a large part of the revenue for the union and which, ahead of 2019, will be one of the most important commercial decisions to be taken by the IRFU in partnership with the FAI.
Find out more about our next major event looking at the impact of Sport for Social Good in September 2017.