'No crowds will present severe challenges' - WRU issue financial warning in annual report
The Welsh Rugby Union has detailed the financial impact of the COVID-19 pandemic and issued a warning for the year ahead as games continue behind closed doors. The WRU Group’s Annual Report for the the year ending 30 June 2020 describes how some 78% of income is derived from staging international matches and the commercial activities around those fixtures, leading to significant challenges in the current climate.
Wales’ final fixture of the 2020 Six Nations, a home game against Scotland, was postponed due to the coronavirus pandemic.
The WRU, who turned over £79.9m during the year ending 30 June 2020, state that the postponement of that game alone amounted to £8.1million deficit. However, they also state that a quick response to the coronavirus crisis allowed them to reduce costs and somewhat cushion the blow.
CEO and former Finance Director Steve Phillips described how the WRU managed the impact of Covid-19 down to a £5.3m deficit thanks to a number of measures, including pausing and alleviating non-essential capital, reducing staff salaries and utilising the Government Coronavirus Job Retention scheme.
A WRU statement read: “This, together with £4.9m of income, provided by the Group’s share of CVC Capital Partners’ investment in the PRO14 competition, helped to mitigate the pandemic’s effect.”
However, Phillips also issued a warning for the financial year ahead.
The WRU’s commercial income was up at £15.4m (2019: £14.2m) and income from participation in the Rugby World Cup made a significant positive contribution, but the pandemic negatively affected competition income (down to £7.1m from £11.9m in 2019) as well as event income (down to £1.1m from £2.4m in 2019) and hospitality and catering income (down to £9.3m, 2019: £14.0m) at Principality Stadium.
CEO Steve Phillips said: “We had expected to show a break even result for the current year and were on track to achieve this up until the business and economic disruption that was caused by the pandemic.
“Its impact on the Group has meant an unanticipated loss, but we expect to be able to retain profits over the medium term to be able to offset this loss and return net assets to previous levels.
“The Group has a healthy business, with a strong balance sheet and adequate liquidity. Immediate measures were taken to reduce costs and protect our financial position.
“However, it is too early to quantify the full impact of the Covid–19 pandemic on future financial performance and the Group will continue to closely monitor the developing situation.”
Phillips warned that the current financial year is where the full impact of the coronavirus pandemic could be felt.
“We are delighted that international rugby will return this autumn but the prospect of playing without spectators has an obvious and directly negative influence on our ability to generate revenue,” added Phillips.
“We have contingencies plans in place, for example for the prospect of home matches in the 2021 Guinness Six Nations having to be played in front of part capacity crowds, due to social distancing but no crowds will present severe challenges.
“We have sufficiently robust banking facilities but there is no doubt that YE21 is when the full impact of this pandemic could be felt.
“We can be proud of what we have achieved so far and, under present circumstances, only making a £5.3m loss in YE20 can be viewed in a positive light, but there is also much hard work ahead, just as there is for all in the sports, leisure and entertainment industries as we continue to navigate through the uncertainties arising from the current pandemic.”
The full WRU report can be viewed here.
Comments on RugbyPass
A wallaby front-row of Bell, Blake and Tupou…now that would be hefty
1 Go to comments“But with an exceptional pass accuracy rating “ Which apart from Roigard is not a feature of any of the other 9s in NZ. Kind of basic for a Black 9 dont.you. think? Yet we keep seeing FC and TJ being rated ahead of him? Weird if it’s seen as vital to get our backline beating in your face defences.
1 Go to commentsThanks BeeMc! Looks like many teams need extra time to settle from the quadrennial northern migration. I think generally the quality of the Rugby has held up. Fiji has been fantastic and fun to watch
13 Go to commentsLets compare apples with apples. Lyon sent weak team the week before, but nobody raised an eyebrow. Give the South African teams a few years to build their depth, then you will be moaning that the teams are too strong.
41 Go to commentsDid footballs agents also perform the scout role at some time? I’m surprised more high profile players haven’t taken up the occupation, great way to remain in the game and use all that experience without really requiring a lot of specific expertise?
1 Go to commentsSuper rugby is struggling but that has little to do with sabbaticals. 1. Too many teams from Aust and NZ - should be 3 and 4 respectively, add in 2 from Japan, 1 possibly 2 from Argentina. 2. Inconsistent and poor refereeing, admittedly not restricted to Super rugby. Only one team was reffed at the breakdown in Reds v H’Landers match. Scrum penalty awarded in Canes v Drua when No 8 had the ball in the open with little defence nearby - ideal opportunity to play advantage. Coming back to Reds match - same scrum situation but ref played advantage - Landers made 10 yards and were penalised at the breakdown when the ref should have returned to scrum penalty. 3. Marketing is weak and losing ground to AFL and NRL. Playing 2 days compared with 4. 4. Scheduling is unattractive to family attendance. Have any franchises heard of Sundays 2pm?
11 Go to commentsAbsolutely..all they need is a chance in yhe playoffs and I bet all the other teams will be nervous…THEY KNOW HOW TO WIN IM THE PLAYOFFS..
2 Go to commentsI really hope he comes back and helps out with some coaching.
1 Go to commentsI think we are all just hoping that the Olympic 7s doesn’t suffer the same sad fate as the last RWC with the officials ruining the spectacle.
1 Go to commentsPersonally, I’ve lost the will to even be bothered about the RFU, the structure, the participants. It’s all a sham. I now simply enjoy getting a group of friends together to go and watch a few games a year in different locations (including Europe, the championship, etc). I feel extremely sorry for the real fans of these clubs who are constantly ignored by the RFU and other administrators. I feel especially sorry for the fans of clubs in the Championship who have had considerable central funding stripped away and are then expected to just take whatever the RFU put to them. Its all a sham, especially if the failed clubs are allowed to return.
10 Go to commentsI’m guessing Carl Hayman would have preferred to have stayed in NZ with benefit of hindsight. Up north there is the expectation to play twice as many games with far less ‘player management’ protocols that Paul is now criticising. Less playing through concussions means longer, healthier, careers. Carter used as the eg here by Paul, his sabbatical allowed him to play until age 37. OK its not an exact science but there is far more expectations on players who sign for Top 14 or Engl Prem clubs to get value for the huge salaries. NZR get alot wrong but keeping their best players in NZ rugby is not one of them. SA clubs are virtually devoid of their top players now, no thanks. They cant threaten the big teams in the Champions Cup, the squads have little depth. Cant see Canes/Chiefs struggling. Super has been great this year, fantastic high skill matches. Drua a fantastic addition and Jaguares will add another quality team eventually. Aus teams performing strongly and no doubt will benefit with the incentive of a Lions tour and a home RWC. Let Jordie enjoy his time with Leinster, it will allow the opportunity for another player to emerge at Canes in his absence.
11 Go to commentsLove that man, his way to despise angry little men is so funny ! 😂
4 Go to comments“South African franchises would be powerhouses if we had all our overseas based players back in situ. We would have the same unbeatable aura the Toulouses, Leinsters or Saracens of this world have had over the last decade or so.” Proof that Jake white does not understand the economics of the game in SA. Players earning abroad are not going to simply come back and represent the bulls. But they might if they have a springbok contract.
24 Go to commentsA lot of fans just joined in for the fun of it! We all admire O'Gara and what he has done for La Rochelle
4 Go to commentsThe RFU will find a way to mess this up as usual. My bet is there will be no promotion into the the Premiership, only relegation into National League One. Hopefully they won’t parachute failed clubs into the league at the expense of clubs who have battled for promotion.
10 Go to commentsWell that’s the contracts for RG and Jordie bought and paid for. Now, what are the chances we can persuade Antoine to hop over with all the extra dosh we’ll have from living at the Aviva & Croke next season…??? 🤑🤑🤑
35 Go to commentsWow, that’s incredible. Great for rugby.
35 Go to commentsYou probably read that parling is going to coach the wallaby lineout but if not before now you have.
17 Go to commentsIf someone like Leo Cullen was in O’Gara’s place I don’t hear Boo-ing. It’s not just that La Rochelle has hurt Leinster and O’Gara is their Irish boss. It’s the needle that he brings and the pantomime activity before the game around pretending that Munster were supporting LaRochelle just because O’Gara is from Cork. That’s dividing Irish provinces just to get an advantage for his French Team. He can F*ck right off with that. BOOOOO! (but not while someone is lying injured)
4 Go to commentsDid the highlanders party too hard before the game? They were the pits.
1 Go to comments