RFU To Cut Investment By £13M After £30.9M In Losses Last Year
The Rugby Football Union "will slash" overall investment in the sport by up to £13M ($16.6M) after a "grim" financial report confirmed revenue around the English game has fallen for a second consecutive year, according to Tom Morgan of the London TELEGRAPH. The governing body invested a record £107.7M ($138M) in the English game over the past 12 months, but has predicted "growing uncertainty" and "challenging times" ahead. RFU execs, who made 62 redundancies over the summer, declared a loss of £30.9M for the year, but claimed the "eye-watering loss" is offset by a restructuring of a Twickenham hospitality business joint venture with Compass. Overall, the RFU's annual income fell by £12.5M last year as a result of declining TV rights deals and stadium revenue. Investment in the professional and amateur game is "likely to be around" £100M ($128M) next year, and then fall to £95M ($122M) by '20 (TELEGRAPH, 11/26). The IRISH INDEPENDENT reported RFU Chair Andy Cosslett said that after seven years of revenue growth in a "buoyant market," the "situation is changing and market conditions have been getting tougher." Cosslett did not mention Brexit but he did say that the overall financial outlook was "uncertain" and the sports rights market was "tightening." He also suggested that the RFU overpaid when it signed a £220M, eight-year agreement with the professional clubs to compensate them for int'l call-ups. Cosslett: "We have to accept we signed some long-term commitments with the professional game which, while strategically important, now appear costly against updated revenue forecasts" (IRISH INDEPENDENT, 11/26).
'WHO KNOWS?': In London, Jack de Menezes reported outgoing RFU CEO Steve Brown denied that "he is leaving a sinking ship" following his sudden resignation after just 14 months in the job, but accepted that the Professional Game Agreement "could come back to haunt" the int'l game. Brown said, "I guess the first answer to it is, who knows? Did we pay too much or did we not pay too much for the PGA? We paid the right amount at the right time when we were in the middle of a growth scenario where when you looked at what was required in the professional game at that point in time and then if you reflect from two years into it, how bad has it been, what did we get for that money?" (INDEPENDENT, 11/26). Also in London, Gerard Meagher reported Brown said that England players' £25,000 ($32,000) match fees "may take a hit in the future." Brown also admitted that "an overspend on the England squad, largely as a result of a high turnover of players rather than staff, had contributed to the union's financial plight" (GUARDIAN, 11/26).