Munster Financial Worries

First topic message reminder :

Having seen todays news that Munster are changing sponsorship from Toyota's €2,000,000 per year down to about a million per year with new sponsor Bank of Ireland I had intended to do a quick write up of a worrying financial situation in Munster Rugby.

I've seen though on one of the forums another like minded fan has already done so in a more articulate way than I could. I've included his article below and I share the concerns he raises.

"Munster are in financial difficulty – there is no more beating around the bush about it. Previously these financial issues were something that were buried deep in notes and sub notes of the IRFU annual accounts yet now they are looming large for all fans to see.

The main issue we are now seeing is that these financial issues are now impacting the on-field activities of Munster Rugby. We have seen players go on loan to save costs, we no longer have a scrum coach due to financial reasons, we are struggling to compete with our HEC competitors for signings (will we even use all our NIQ spots next season?) and last season we were outside our day to day budget by over 1 million euros. It also looks like the new jersey sponsorship deal will result in a drop of over 750k per annum as well. Jim Williams spoke out years ago about the madness of a players training separately in two different bases, Tony McGahan supposedly had it written into his contract that the training base issue would be addressed yet it seems it was huge financial pressure not the best interests of the playing squad that forced the decision to chose UL.

Sending experienced players, on what one has to assume are high provincial level wages, on loan is a smart tactic and was used last season when the day to day running costs first became an issue. It became apparent it was required again this season and it meant that we had to register an extra scrum half for the knock out stages of the HEC instead of a ready made impact player like CJ Stander. Paul MacCarthy is someone who I was very critical of previously but to be fair to him the Munster scrum has made huge improvements in the last two seasons. We are now entering a new era how scrums will work. No longer is it about the timing of the hit but with the new rules of binding before the second rows join it means a much greater emphasis on the technical demands of the props and the scrum as a whole. Munster are now left to work on these new rules with no scrum specialist. Paul Mac’s wages may have been paid by MRSC funding but the simple fact is that Munster have decided that they need to make cuts and this is one of them.

We have one stadium in Limerick that we can’t afford repayments on and yet due political issues we are looking to upgrade a second stadium? In 2007 a loan of 11.5 million euro was taken out by the branch from the IRFU to pay for the MB’s half of redeveloping Thomond Park. I can’t find much on how they intended to pay off this loan apart from the 10 year tickets. Munster have consistently failed to meet the repayment schedule since 2008 and in some years didn’t even make a payment. Currently that loan stands at 10.3 million euro and according to the IRFU annual accounts Munster should have repayed 4.3 million by April 2013. Given the current climate I really can’t see an appetite for a further sale of 10 year tickets and given our already poor financial status I would argue that the IRFU would be likely to get 100% control of TP in the very near future (IRFU loan is due in full by 30th April 2017).

In my opinion this mess really started with the redevelopment of Thomond Park. This is not about Cork versus Limerick but about the financial model that would be used going forward from that point in time. At the time the Supporters Clubs had somewhere in the region of 8k members and a so called promise from to extend full membership to 10k MRSC members. Now from a financial point of view that would have made a lot of sense. A 26k stadium and 10k fans who at the start of the season would stump up a membership fee and pay for their League and Cup season tickets. Instead the politics of Munster rugby took over and the clubs wanted to keep their “exclusive” chicken and chips in a basket HEC gameday fundraisers. Little did they realise that the 26k would cope with demand for all but a few games and that the real corporate clients and those willing to pay money for dinner and drinks would be served by Munster Rugby themselves in the new corporate facilities. The clubs couldn’t expand their chicken in a basket fund raisers and the branch continued to ignore the full revenue potential of the supporters club.

This mess is part driven by the current economic climate but it also has an awful lot to do with internal branch politics. To me it seems like a lack of strong leadership to sort out these internal issues and they have now been forced into action purely due to the financial position Munster are in. The fact that despite the need for a 1.5/2 million euro cut in day to day costs over 2 seasons(1 million loss last year and the change in sponsorship deal), the Thomond Park loan that we are unable to service, Munster continue to spend money on redeveloping a second stadium that limits income due to size is just a crazy decision.

The really sad thing is that brains trust have committed the cardinal sin of allowing off field matters affect on field resources and either people need to fix this very very quickly or step aside and ensure that people who can make these changes are appointed in their place."

I can't but help agree. Munster's decision making has been extremely poor mainly plagued by politics. I think our digital marketing has been very poor in comparison with Leinster who do the whole social media scene better than we do and our lack of interest in the Pro 12 isn't acceptable in terms of putting bums on seats. Above all else we have been tinkering around with our dual training centres and developing two stadia.

I worry for our future financially.

Sin é wrote:

GunsGerms wrote:Patrick and John Collison could spare a few bob. They wouldnt be a bad bet.

Have a look at some of Munster's commerical board. If this lot couldn't do better than BofI, the country must be well feiced.

Commerical Board Members:
Niall FitzGerald: Chairman, Hakluyt & Company Ltd (former Chairman & CEO of Unilever & Reuters).
Patrick Coveney: CEO, Greencore
David Cronin: CEO, UL Foundation
Leslie Buckley: Chairman, Independent News and Media.
Tony Keohane: CEO, Tesco Ireland
Ken Murphy: COO, Alliance Boots

Patrick Coveney and Simon Coveney both played rugby for Clongowes. Im sure they are Munster fans.

Toyota was a cool sponsor, Bank of Ireland is ok,
Connacht have Mazda and thats cool.

But Ryanair would cheapen the Munster brand, why not go with Wonga or something equally bad.

Mazda will invest over €1.5m in Connacht Rugby over the next 3 years

Bank of Ireland has agreed to pay to secure its multi-year deal with Munster but it could be worth about €600,000 to €700,000 a year plus bonuses if certain performance targets are met.

So Connachts istn't to bad about £150,000 and bonuses less, but Munster are a hugh brand name in rugby compared to Connacht

How much did Dragons get for Eteach, I bet the Connacht deal is better.

Can't really find what Ulster and Leinster get, as they just keep renewing it 2006 and 2000 come up but these are outdated.

GunsGerms wrote:

Sin é wrote:

GunsGerms wrote:Patrick and John Collison could spare a few bob. They wouldnt be a bad bet.

Have a look at some of Munster's commerical board. If this lot couldn't do better than BofI, the country must be well feiced.

Commerical Board Members:
Niall FitzGerald: Chairman, Hakluyt & Company Ltd (former Chairman & CEO of Unilever & Reuters).
Patrick Coveney: CEO, Greencore
David Cronin: CEO, UL Foundation
Leslie Buckley: Chairman, Independent News and Media.
Tony Keohane: CEO, Tesco Ireland
Ken Murphy: COO, Alliance Boots

Patrick Coveney and Simon Coveney both played rugby for Clongowes. Im sure they are Munster fans.

They are from Cork (and I've seen Simon at Munster games - still wearing an old Bank of Ireland jersey which will now be back in fashion)!

Sin é wrote:
They are from Cork (and I've seen Simon at Munster games - still wearing an old Bank of Ireland jersey which will now be back in fashion)!

I know. Both very brainy.

just out of curiosity, does Musnter only have one sponsor (ie the main one) or do they also have various smaller "partners" that also give some money to the club ?

reason I ask is that french clubs have up to hundred sponsors/partners from the big one that give up to a couple of millions € for the name on the shirt down the the small local companies that dont even get their name mentionned. this has been the strengh of clubs like Toulouse and Clermont (total sponsorhip up to 9M€ per year which basically pays for the players...)

whocares wrote:just out of curiosity, does Musnter only have one sponsor (ie the main one) or do they also have various smaller "partners" that also give some money to the club ?

reason I ask is that french clubs have up to hundred sponsors/partners from the big one that give up to a couple of millions € for the name on the shirt down the the small local companies that dont even get their name mentionned. this has been the strengh of clubs like Toulouse and Clermont (total sponsorhip up to 9M€ per year which basically pays for the players...)

It seems they do:

http://www.munsterrugby.ie/corporate/sponsors.php

Brown Thomas sponsor the Munster Team

JP McManus has been known to be very generous to Munster (think he gave about 5m to redevelopment of Thomond Park), but he is more into Limerick GAA. Munster players seem to get invited to all his parties though so I doubt if he would see Munster stuck.

As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Sin é wrote:As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Find that hard to believe given that there are about 50m people in SA for example.



Maybe Addidas' second top selling jersey.

GunsGerms wrote:

Sin é wrote:As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Find that hard to believe given that there are about 50m people in SA for example.

England has a population of 60m, but I'd say Manchester United sells more jerseys than the international soccer & rugby teams combined.

Rugby would mainly be popular with the Africaans in SA (there are 2.25 million Africaans in SA according to wiki).

Sin é wrote:

GunsGerms wrote:

Sin é wrote:As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Find that hard to believe given that there are about 50m people in SA for example.

England has a population of 60m, but I'd say Manchester United sells more jerseys than the international soccer & rugby teams combined.

Rugby would mainly be popular with the Africaans in SA (there are 2.25 million Africaans in SA according to wiki).

My guess it there are more than that and obviously there would be more than just Africaaners that support rugby but Im out of my depth here.

Anyway Im off. Have a good weekend.

GunsGerms wrote:

Sin é wrote:

GunsGerms wrote:

Sin é wrote:As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Find that hard to believe given that there are about 50m people in SA for example.

England has a population of 60m, but I'd say Manchester United sells more jerseys than the international soccer & rugby teams combined.

Rugby would mainly be popular with the Africaans in SA (there are 2.25 million Africaans in SA according to wiki).

My guess it there are more than that and obviously there would be more than just Africaaners that support rugby but Im out of my depth here.

Anyway Im off. Have a good weekend.

You too - enjoy the match.

Sin é wrote:Brown Thomas sponsor the Munster Team

JP McManus has been known to be very generous to Munster (think he gave about 5m to redevelopment of Thomond Park), but he is more into Limerick GAA. Munster players seem to get invited to all his parties though so I doubt if he would see Munster stuck.

As far as I know, Munster Rugby has the best selling rugby jersey (after the All Blacks), so they should do well from Adidas - emigration would help maintain those sales and there is a new jersey this year).

Munster had the best-selling club jersey in in the UK/Ire in 2011/12 anyway Sin, (cheers for giving me the idea of Googling this one, interesting reading)

28 February 2013 by Adrian Hill
The famous red shirt of Munster was the most sold rugby union club shirt in the United Kingdom and Ireland in 2011/12, according to figures gathered in an exclusive Running Rugby survey of the market across the Aviva Premiership and the RaboDirect PRO12.

Total club replica kit sales across the 22 British and Irish sides in the Premiership and the PRO12 amounted to 175,500 – an average of 8,000 per club. Based on an average shirt price of £50 (€58), this means that the market is worth £8.75m (€10m).

The data comes from estimates of 2011-12 season sales developed after consultation with a number of brand, retail and club experts. Each club mentioned in the survey was approached by Running Rugby to confirm the figures.

...

Team	2011/12 Sales
Munster	25,000
Ospreys	22,000
Leicester	18,000
Leinster	18,000
Ulster	15,000
Harlequins	10,000
Gloucester	8,000
London Irish	7,000
Connacht	6,500
Bath	6,000
Exeter	6,000
Northampton	5,000
Saracens	5,000
Worcester	5,000
Blues	5,000
London Wasps	4,000
Scarlets	4,000
Dragons	2,500
Sale	2,000
Glasgow	2,000
Edinburgh	1,500
London Welsh	<1,000

* = Estimates of 2011-12 season sales have been made after consultation with a number of brand, retail and club experts who remain anonymous. Each club was asked for verification of this information before publication, but may not have co-operated fully with this project.

Note, I had to register for the site to access the full article http://www.runningrugby.com/retail-club-high-st-online/exclusive-top-ru-club-replica-sales-total-8-75m/ - I've cropped it to keep the copywrite police happy, and I've simplified the table a bit (it included kit manufacturer, expiry of kit deal, & average gate info)

Interesting to see that Connacht sold more shirts than Saracens, bath and saints

It's worth noting that if Munster get £10 (sorry, can't find the Euro key on my keyboard) per shirt sold 25k sales =£250k in the bank.

Pete C (Kiwireddevil) wrote:It's worth noting that if Munster get £10 (sorry, can't find the Euro key on my keyboard) per shirt sold 25k sales =£250k in the bank.

Actually, on 2nd thoughts, Munster probably get a fixed "licensing fee" from Adidas each year - that's how the All Blacks' deal works. So the real probably reflects the healthy sales figures, but any extra sales revenue in a year probably winds up in Adidas's back pocket.

How about Barry's tea as a sponsor!

Ospreys sold 22,000 shirts?

That seems very out of keeping with their attendance figures does it not?

MrsP wrote:Ospreys sold 22,000 shirts?

That seems very out of keeping with their attendance figures does it not?

TV watchers?

Shows there's potential for much better support for regions in Wales. How to galvanize them I have no idea.

Feckless Rogue wrote:Shows there's potential for much better support for regions in Wales. How to galvanize them I have no idea.

Regional season ticket holder get a guaranteed option on tickets for all Wales home games.

If Munster RFC changed their name to Munster Bank it would ease their financial problems at a stroke.They should have a word with Natwest who appear untouched by the economic climate that they helped to create!

Cripe,
Just come over to Boston and/or New York and play a friendly vs. US or Rugby Canada and you will make your millions back.

doctor_grey wrote:Cripe,
Just come over to Boston and/or New York and play a friendly vs. US or Rugby Canada and you will make your millions back.

Been there done that! Munster were over their for pre-season tours and played the Eagles somewhere around Chicago and in Boston.

Pete, thanks for that link. Some really interesting stuff there.

The explanation for the high number of Osprey jersey sales apparently has to do with a black jerseys being popular and the design is also important. Edinburgh's jersey is another who sells more jerseys than actual fans.

In 2006 Munster sold 90,000 replica jerseys! Munster have 2 shops (one Cork & one in Limerick). Their biggest sales area is to the UK (and not necessarily ex-pats). Apparently Munster is everyone's 2nd team in England (that may have changed to Toulon now) with the largest proportion of sales in the Leicester & Northampton area.

All very interesting stuff!

Everywhere one looks in the New York area it is hard not to see a Munster jersey somewhere.

doctor_grey wrote:Everywhere one looks in the New York area it is hard not to see a Munster jersey somewhere.

its because Munster is associated with honesty and manly pursuits. While say Leinster for example is associated with l'boys, D4heads, pints of heino (a girls drink), high pitched squealing, Daddy paying for extra grinds (or an extra year) due to a lack of any intelligence, to get an arts degree at ucd in greco-roman civilisation and sociology, but that's ok coz daddy will get you a job in his friends business..where they will rise to the top and with their friends screw up the country...unless of course you go the other route and drink Carlsberg (better known as a pint of 'probs'), wherein you are bound to become a captain of industry..and then screw up the country

DOD wrote:

doctor_grey wrote:Everywhere one looks in the New York area it is hard not to see a Munster jersey somewhere.

its because Munster is associated with honesty and manly pursuits. While say Leinster for example is associated with l'boys, D4heads, pints of heino (a girls drink), high pitched squealing, Daddy paying for extra grinds (or an extra year) due to a lack of any intelligence, to get an arts degree at ucd in greco-roman civilisation and sociology, but that's ok coz daddy will get you a job in his friends business..where they will rise to the top and with their friends screw up the country...unless of course you go the other route and drink Carlsberg (better known as a pint of 'probs'), wherein you are bound to become a captain of industry..and then screw up the country

Cracker!

Have only had a quick glance at the thread some questionable moves have been made in deed, I'm not quick to criticise our CEO and co. as I'll admit there's a personal bias there. I would question the development of two stadiums to be perfectly honest, the stand in Musgrave is nice but at €25 quid a ticket for a game that is usual poor standard compared to other Rabo games it is not worth it (besides they usually sell them for about 10 or 15 at half time in the match if people want it).


As for lack of money, we put in a bid for Rene Ranger is what I'm told, now obviously it wasn't enough but we can't be completely broke. Not giving ROG in excess of 200k and Stringer leaving may help somewhat, we seem to have quite a small squad though, so the academy will be relied upon hugely, I haven't heard of many outhalves in it of note (tha O'Shea lad from Crescent is a full back isn't he?) but I haven't paid too close an eye on it (around the U-19 age, there's a good 3 outhalves who could make the step up to Munster Academy I think)

Thomond,

Holland will probably be cover outside Hanarahan and Keatley. Crescent flyhalf Gearoid Lyons has gone into the academy so he'll be available but I would say more likely to be benching in the B&I Cup. Greg O'Shea is a fullback/winger.

Hasn't Holland only made one B&I cup appearance? It's a lot to be asking for a young lad. Lyons has got a lot of positive revies, I believe the man playing opposite him from the final is off to Connacht. There is some very solid backs talent coming through so it seems, some promising forwards as well, Munster always seem to produce good backrows, O'Donoghue being another one to watch.

I think that overall, that Irish clubs could do more to recruit some of the better clubs players, but they seem to have done it well of late. That new law, that came in might actually help clubs rugby.

Reading through this thread, I have a lot of sympathy for the Munster supporters, what Munster are going through is exactly the same thing that our regions are/have been going through, just take a look at the Ospreys for example, a lot of big names going and the squad is now relying on its academy, the same thing with the Scarlets and now we are seeing it happen with the Blues, the Ospreys and Scarlets look like they are comming through the rough waters now though and I am sure the Blues will make a better show of things next season, I also expect the Dragons to do a lot better as well. All I can say is, don't worry if the Welsh regions can get through a minefield like that I am sure a massive brand like Munster should find a way through it as well.

Ah yea we'll be ok Dowlais. I still think the regions aren't doing that badly on the field. Its off field issues (lack of support) that is the biggest worry.

The support the provinces get from the fans will be a help both financially and in terms of helping to push the team on the field.