Everything in the rose garden is lovely, thank you very much (apparently)

RunningRugby wrote:

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Brown Delighted By RFU’s Record Year

21 November 2013 by Tim Groves

The Rugby Football Union (RFU) has revealed in its annual report that its revenue has surpassed £150m for the first time in its history and that has enabled a record figure of just under £64m to be invested back into the sport.

The investment figure for the year ending 30 June 2013 is an improvement of as much as 15 per cent on the previous year and the RFU’s chief financial officer Stephen Brown has told Running Rugby that the union’s commercial success means that the game in this country is in rude health.

“The game as a whole is in a good place because the RFU is in a very secure financial position,” he said.

“Any kind of record achievement is a great thing for the RFU. What we are particularly proud of is less about the revenue though because that goes up and down depending on the World Cup cycle and more about the record investment in rugby.

“That is the key point for us and the most important part of that is us being in a strong position to continue to grow that investment through the cycle of the World Cup irrespective of what our revenues are doing.”

Overall revenue rose by as much as £42.9m to £153.5m thanks largely to a schedule that included four autumn internationals and three home Six Nations matches, a significant increase on the previous year when the World Cup was taking place.

Ticket revenue soared from £13.3m to £33.9m as a result and hospitality and catering also rose by £9.9m to £37.5m. Five concerts were also hosted during the 2012/13 financial year though and Brown says the investment in Twickenham is paying dividends.

“The hotel is progressing steadily and quite nicely and total hotel revenues in the year were £6.5 million and the health and leisure club was £3.6 million. They are both healthy businesses that give us a good return and they are fairly steady irrespective of the match profile but they are slowly but surely growing and giving us a nice return,” he said.

“The other non-match revenues are concerts and they are a good, healthy revenue stream for us as well…it is about using the asset when we don’t have matches here as much as we possibly can without compromising our core business.

“We have got a significant asset here in the South Stand, which is becoming more and more utilised for our conference and events base and that usage is expanding more as we go through the strategic plan period.”

The RFU’s net debt at the end of the year was £150.1m compared to £130.5m the previous year but Brown says that is all accounted for in the strategic plan, which details what can be expected when it comes to the union’s finances for the next five years.

“We are trying to run a very tight ship. We are not here to make money, we are here to reinvest in the game and that is our primary stated objective to reinvest every penny made or saved back into rugby,” he said.

“We like to make it as predictable as we can so that we do make sure that every penny goes back in and we don’t leave it on the table because we are not here to grow reserves or retain profits or distribute those profits.”

He insists there are no surprises as a result of a “very tight planning and forecasting process” and a monitoring procedure that takes place monthly and quarterly.

And, although sponsorship is another area where growth was anticipated this year, a rise from £15.3m to £19.1m will have been pleasing and Brown acknowledges that is a figure that may well be on the rise again as 2015 approaches.

“One of the beauties of our business is that we have fairly long-term contracts in terms of broadcasting, sponsorship and other relationships which means that we have a pretty much guaranteed revenue stream,” he said.

“Being contracted for a period of time gives us a great deal of stability and that is recognised in our borrowing with RBS and that makes life very simple for us.

“There is a bit of a step change between 2012 and 2013 [in terms of sponsorship] because of some renewals and that will stabilise a bit through the cycle but there is some growth and there is some additional sponsorship that we are looking for constantly.”

Interestingly, the RFU has already planned for and stated that the next financial year in 2013/14 will be a loss year but Brown says it is planned “very, very closely” and as a consequence it may yet prove to be another record investment year.

“The year we are in now, 2013/14, will be a loss year but it will likely be a record rugby investment year because we are managing the position with our reserves,” he said.

Brown is also the chief financial officer for the Rugby World Cup in 2015 and, ahead of the announcement of ticketing strategy and prices next week, he is confident that there will be no issue with achieving the £80m guarantee required by the IRB.

“We will start to generate revenue in 2014 as we start to go on sale with the tickets and then in terms of our ability to hit that guarantee [of £80m] and any net returns to the RFU, we are planning that in fine detail,” he said.

“We have got a comprehensive model with anticipated and forecast cost throughout the whole of the tournament, we know exactly what our head count position is going to be month on month and at the moment we have assumptions around the revenue streams and when they are likely to occur.

“Of course we don’t have 100 per cent confidence in that until such time as we start to generate those revenues but at this stage it all looks very doable and we just do have that big commitment to pay the guarantee back to the IRB.”

The RFU’s workforce has gone up from 555 to 591 in the past year as a result of the extra demands of the World Cup preparations, meaning that staff costs rose from £28.7m to £34.7m.

Again, that is all part of the grand plan though and Brown, who only joined the RFU a couple of years ago after working in a similar role in the pharmaceutical industry, says it is “a dream” to work for an organisation where you can see very obviously the fruits of your commercial success.

“We continue to do well in what up until now has been a very challenging economic environment and I think that says a lot about the value of our product and the attractiveness of what we offer to very loyal and important fans,” he said.

“To come into this environment and put back the money we do in the way that we do into the game through really fantastic commercial performance, and let’s not forget a brilliant England side that helps us to generate all of this revenue, is a dream.

“For me, to have the joined up symmetry that we do within our business model and how we put that money back into the game means that you can see the direct impact of our commercial success.”

http://www.runningrugby.com/accounts-funding-and-financial-services/brown-delighted-by-rfu-s-record-year/

Now if we could only grow an outside centre or 2 in that garden...

BTW...any UK National Lottery money coming to the RFU in advance of hosting the World Cup? The Lottery seems to have a very strategic place now in funding levels of British sport, especially for big events and behind the scenes sciences involved.

nobbled wrote:Now if we could only grow an outside centre or 2 in that garden...

I'm not concerned about the nursery beds, nobbled. There's a dozen saplings in the arboretum and a decent in specimen in the tender care of the Welford Rd unit. There's other promising seedlings about, too.

SecretFly wrote:BTW...any UK National Lottery money coming to the RFU in advance of hosting the World Cup?  The Lottery seems to have a very strategic place now in funding levels of British sport, especially for big events and behind the scenes sciences involved.

Don't think so, SF. Rugby in England has to be self-supporting these days.

Nice to know the RFU are doing a nice job of making as much money at they can to fatten their own pockets.
I salute you. 

Portnoy Complaint I always thought you worked for the RFU......haven't done anything to disprove that theory.

What's ailing you 'shocked?

I always thought that you were in favour of professional rugby wot wiv your special flags, lascivious dancin' girls 'n stuff.

Do I need another opportunity to distance myself from both the farty RFU and the entirely greed-ridden PRL?

No?





Too late...

As part of their dive for greater profits, sorry spreading the game, I notice that many Twickenham debenture holders seats' won't be allowed for them during the WC. So after relieving someone of 7k (just for the right to buy tickets) they then say, actually we would rather try and flog your tickets for 10x the normal value, despite not mentioning this exclusion.

I'm sure this won't get much sympathy, but with tickets at c.£800 for the final face value, its not as if they will be encouraging new fans to come. Instead it will be even more corporate than usual.

Bathman_in_London wrote:As part of their dive for greater profits, sorry spreading the game, I notice that many Twickenham debenture holders seats' won't be allowed for them during the WC. So after relieving someone of 7k (just for the right to buy tickets) they then say, actually we would rather try and flog your tickets for 10x the normal value, despite not mentioning this exclusion.

I'm sure this won't get much sympathy, but with tickets at c.£800 for the final face value, its not as if they will be encouraging new fans to come. Instead it will be even more corporate than usual.

 

Well said.

RFU wrote:The RFU’s workforce has gone up from 555 to 591 in the past year as a result of the extra demands of the World Cup preparations, meaning that staff costs rose from £28.7m to £34.7m.

Of course this wouldnt be all wages/salaries but still the average cost of labour
was £51712 and is now £58714.

Hmm. We're all in it together, folks.

I seem to remember reading somewhere that RFU had/going to spend 6 figure sum to get the debenture holders their rights from the IRB.

RFU wrote:The Rugby Football Union (RFU) has revealed in its annual report that its revenue has surpassed £150m for the first time in its history and that has enabled a record figure of just under £64m to be invested back into the sport.

That does not of course tell us anything about annual profit (surplus) net or gross, just the way in which the beans are shifted as evidenced by the statement

Brown wrote:“We are trying to run a very tight ship. We are not here to make money, we are here to reinvest in the game and that is our primary stated objective to reinvest every penny made or saved back into rugby,” he said.

I wonder if that include making a few privileged people a tidy living.

Still. At least they didn't go on a nice little jolly to Da Dubs this week...

broadlandboy wrote:I seem to remember reading somewhere that RFU had/going to spend 6 figure sum to get the debenture holders their rights from the IRB.

Well for some and not others it seems. If I was being cynical I would say that those who have them in between the 22's won't get seats and those in the less bigwig friendly areas will. (Based on a sample size of 2 people in my office who have them).

What were the terms of the debentures?

Surely people with a thou or three spare for the opportunity to pre-book their seats wouldn't collectively allow themselves to be stitched up like a kipper?

Did they read the T&Cs?

I can't answer that but I think those who have them would have liked to have been told when they handed over the cash that there was a chance that might happen. The RFU probably feel that with such a long waiting list, they can do what they like really, there will always be someone else willing to fork out for the seats.

Still, at least none of the committee have been caught buying crack or handing out soft loans to their mates... Yet.

Portnoy's Complaint wrote:

RFU wrote:The RFU’s workforce has gone up from 555 to 591 in the past year as a result of the extra demands of the World Cup preparations, meaning that staff costs rose from £28.7m to £34.7m.

Of course this wouldnt be all wages/salaries but still the average cost of labour
was £51712 and is now £58714.

Hmm. We're all in it together, folks.

When assessing the cost of employing an individual a good rule of thumb is double the salaries.

On that basis I woudl suggest the average salary is £29357 - approximately  .

So long as Rob Andrew is in the lower quartile, geoff, he might be worth his job (just).