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IRFU Annual Report Forecasts Challenging Times Despite Surplus

IRFU Annual Report Forecasts Challenging Times Despite Surplus

The Irish Rugby Football Union today presented its 2012/13 Annual Report and Accounts, reporting a 14.9 million euro surplus after taking account of a once-off ‘exceptional’ item of 11.5m euro.

The Union cautioned that when this €11.5m once-off item was removed its surplus declined to €3.4m compared with €7.8m last year.

In terms of operating cash-flow this has fallen from a surplus of €2.4m in 2011/12 to a deficit of €4.5m in 2012/13 after non-cash items, such as depreciation and amortised income*, were accounted for.

The Union highlighted that despite the fall in its surplus:

– Funding to Connacht, Leinster, Munster and Ulster remained static (€23.4m v €23.5m)

– Funding to representative teams, branches, clubs and schools increased (€9.5m v €9.25m)

– Representative teams grew from 7 to 8 with the introduction of Women’s Sevens

Presenting the accounts, Tom Grace, Honorary Treasurer, warned of difficult times ahead. “Rugby, like every business, continues to feel the impact of the straitened financial times; as people have less money and more options on which to spend their disposable income,” he said.

“While our current financial performance of €14.9m is welcome, it flatters to deceive, as it is largely due to a once-off item. Stripping this out our net operating cashflow has fallen to a deficit of €4.5m.

“It is increasingly challenging to raise the required funding to keep our provincial and domestic game adequately resourced and while the €33m spent on the provincial and domestic games are the Union’s largest costs they represent an investment in the future of our game, and must be protected.

“This investment can only be sustained if rugby fans continue to support the national team.

“The most striking development of 2012/13 was the impact of the current economic climate on our ten-year ticket renewal which saw just 50% of our ten-year ticket holders renewing.

“Thankfully the Union has been conservative in its approach and we are now in a net cash position. However, as we do not have sufficient cash reserves to cover future cash deficits we now intend to borrow against future sales of ten-year tickets and corporate boxes.

“The Union will continue to develop the game but cash is tight and the support from fans is increasingly important in protecting their investment in their game.

“The entire game, be it at international, provincial, club or schools level, can only function if we continue to enjoy packed houses at the Aviva Stadium.

“If there is one thing to be learned from this financial year it is that supporting our national team at the Aviva enables the IRFU to continue to make significant funds available to professional and domestic games.””

IRFU Annual Report

Download the 2012/13 IRFU Annual Report

*Amortised income comprises 10-year ticket and five year box sales and naming rights income, which funded the building of the stadium (instead of bank loans). This ‘income’ must be accounted for over the period to which it relates and is reflected in the annual accounts despite the fact it was not actually received in the year, and has already been spent.