Rugby for sale?

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The Doc
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Re: Rugby for sale?

Post by The Doc »

Morf wrote:It's easy to say from the fan side but if you were making the decision as a rugby administrator it's difficult to turn away from significantly greater income in the short to medium term.

Puts the union on a more solid footing, allows your more optimistic grassroots initiatives to be paid for, you're less concerned with future governments (and their approach to sport), foreseen BREXIT consequences are more easily accounted for etc and so on.

You may provide many good reasons against such a deal but it could be adopted for well-meaning reasons that aren't self-serving for those making it.
I don't think anyone is doubting the well meant reasons. The question is the underlying logic.

The assumption in your logic (and you see the same commentary coming out of Wales certainly) is that the unions operate in a closed system - revenues increase therefore more excess funding to put into grassroots and infrastructure. But they don't operate in a closed system. If English and French clubs take additional cash flow and pump up salaries and other running costs, that impacts Ireland becasue the IRFU now have to significantly increase costs in the professional game.

The experience with other sports is that the vast majority of additional cash flow goes to increased costs - not any increase in general investment. Football has been cited but that maybe isn't the best analogy as the FA didn't sign the deals - though the palying salaries as a % of revenue has increased significantly over the years. But cricket has seen a massive fall-off in participation in England.

I don't think the independence you mention is a given. In fact, as costs increase the sport becomes increasingly dependent on a fairly narrow revenue base (essentially subscription TV deals) - rugby in Australia is discovering what that feels like. And when CVC liquidiate - which they will - it is at a point where changing strategy is not an option.

I would rather there was a proper debate of the potential impacts rather than a top-line focus on just revenue. If the Union want to be on a secure footing then they need to think about the surplus - not revenue
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Dexter
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Re: Rugby for sale?

Post by Dexter »

The Doc wrote:
I would rather there was a proper debate of the potential impacts rather than a top-line focus on just revenue. If the Union want to be on a secure footing then they need to think about the surplus - not revenue
Nail on head - the key point in any strategic financial analysis. It seems so obvious in theory, but in practice it often goes by the wayside.
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Morf
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Re: Rugby for sale?

Post by Morf »

The Doc wrote:I don't think anyone is doubting the well meant reasons. The question is the underlying logic.

The assumption in your logic (and you see the same commentary coming out of Wales certainly) is that the unions operate in a closed system - revenues increase therefore more excess funding to put into grassroots and infrastructure. But they don't operate in a closed system. If English and French clubs take additional cash flow and pump up salaries and other running costs, that impacts Ireland becasue the IRFU now have to significantly increase costs in the professional game.

The experience with other sports is that the vast majority of additional cash flow goes to increased costs - not any increase in general investment. Football has been cited but that maybe isn't the best analogy as the FA didn't sign the deals - though the palying salaries as a % of revenue has increased significantly over the years. But cricket has seen a massive fall-off in participation in England.

I don't think the independence you mention is a given. In fact, as costs increase the sport becomes increasingly dependent on a fairly narrow revenue base (essentially subscription TV deals) - rugby in Australia is discovering what that feels like. And when CVC liquidiate - which they will - it is at a point where changing strategy is not an option.

I would rather there was a proper debate of the potential impacts rather than a top-line focus on just revenue. If the Union want to be on a secure footing then they need to think about the surplus - not revenue
I'm not advocating for rugby on PPV rather than presenting a case for a largely volunteer group of rugby administrators to see one set of possible benefits.

PPV sport is coming into a time of massive flux/bubble bursting but then BBC/RTE are/were looking down the barrel of no money to spend on sport either.

Keeping sport free to air is far from risk-free. Money is vastly diminishing on that side with the risks of going behind a paywall seeming less so.

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dropkick
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Re: Rugby for sale?

Post by dropkick »

Another thing to consider is the type of PPV. What will be on offer. €5 per month for a rugby dedicated service or €30 PM for a service that includes multiple sports you don't watch?

Ruckedtobits wrote:And so the public campaign begins. Marc McSharry - FF spokesman on Sports & Tourism - and Brendan Griffin - his FG equivalent, have found one common policy, put the 6 Nations on the Goverment ' Listed Events' immediately. Why was it ever left off ? Answer, because the IRFU (Philip Brown and Tom Grace) convinced the Dail Sports & Tourism Committee to leave it out in 2014.

The crunch decision lies with the IRFU Committee. Those individuals should be concerned with the impact on the game's development rather than the Union's income and war chest. The income from 5,000 x €15,000 from this year's sale of 10 yr Tickets shouad ease the pain of less TV Rights income. Coupled with the sale of the land in Newlands and the Pro14 capital income for 26% of that shareholding to CVC, should be sufficient for anybody confident in the future of the game.

On the other hand, if that Committee of 24 or 26 august Representatives and Officers of the IRFU do not care about the future development of the game, should they be in those representative roles, or, put another way, who do they represent?

Are the IRFU still paying off the aviva stadium? Sounds like they don't need the money but it might be out of their hands if all the others want to go a different direction.

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Morf
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Re: Rugby for sale?

Post by Morf »

dropkick wrote:Are the IRFU still paying off the aviva stadium? Sounds like they don't need the money but it might be out of their hands if all the others want to go a different direction.
Debt gets eaten up by inflation so it's generally a bad idea to pay off debt early in most cases when it can be comfortably serviced.

The Doc
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Re: Rugby for sale?

Post by The Doc »

Morf wrote:
dropkick wrote:Are the IRFU still paying off the aviva stadium? Sounds like they don't need the money but it might be out of their hands if all the others want to go a different direction.
Debt gets eaten up by inflation so it's generally a bad idea to pay off debt early in most cases when it can be comfortably serviced.
Which makes me wonder... Why wouldn't the WRU (and others) do something like securitizing stadium revenues to raise capital rather than sell a % of the 6 nations. Rates are so low 6N could issue bonds backed by revenues at close to 0% where they could keep all of revenue increase over time and not hand over control.

It's not beyond possibility that CVC will be doing something like that to fund the purchase.

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Ruckedtobits
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Re: Rugby for sale?

Post by Ruckedtobits »

This is a decent debate on this thread.....and much more informed and balanced than within the IRFU Committee. There are perhaps 3 / 5 members of that Committee sufficiently informed, and dedicated to the future of the game in Ireland, to ensure there is rigorous consideration of all the issues.

Tom Grace has performed superbly as Honorary Treasurer, from a financial perspective. However, during his term of office, direct support to Irish Clubs has diminished four-fold whilst employment of people supposedly dedicated to the amateur game has doubled. This has made it impossibly to calibrate the impack of Union funding on the development of the amateur game.

What is certain is that numbers playing Mini and Youth rugby continue to grow whilst numbers playing adult amateur rugby continue to fall. At the same time, the total income paid to Ireland's professional players has increased at more than twice the rate of average wage inflation (anecdotal attribution from comments referenced to Ireland at meeting of International Players Assoc on fringes of World Rugby meeting).

Broadly these numbers seem to reflect the reality but little or no pressure has been put on IRFU to spend money on marketing the game and supporting Club Rugby. All of the strategic (and monetary) focus has been on driving the success in the professional game. That is not what will keep the game growing and successful. The IRFU must support the Clubs with financial rewards for increasing the numbers playing and the number of (adult) teams competing in Branch competitions.

It can be done but must be prioritised.

Ruckedtobits
Shane Jennings
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Re: Rugby for sale?

Post by Ruckedtobits »

Update about how rugby may be selling its future or ensuring its survival, depending on your perspective.

https://www.rte.ie/sport/rugby/2021/011 ... long-term/

I've little doubt this deal will be approved but I remain convinced it is detrimental for the future of the overall game and could drive rugby down the NFL pathway i.e. High-class Schools & Professional games will prosper. The amateur & social Club game will struggle and may not survive.

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