Munster Debts

http://www.irishtimes.com/sport/rugby/international/irfu-chief-does-not-believe-munster-can-make-debt-repayments-1.2723985

Clearly Philip Browne didn't read the thread on here in which I was told the debts would be repaid without an issue.

Indeed. His very public rebuke must have Fitzgerald & Co squirming.

I presume at some point, the payment deadline is going to get pushed out. I can't see the IRFU writing it off though.

PhilBB feeding his obsession with the Irish.

He has a point though, doesn't he?

I would question the motivation rather than the point, and the point is something many of us suspected anyway.

I'm all for giving Munster all the time they need to repay the loan, and if it doesn't happen it's not the end of the world. We need a strong Munster. Not one struggling under the weight of debt.

Having said the above; Fitz needs to go or the IRFU should get tough.

Munchkin wrote:I would question the motivation rather than the point, and the point is something many of us suspected anyway.

I'm all for giving Munster all the time they need to repay the loan, and if it doesn't happen it's not the end of the world. We need a strong Munster. Not one struggling under the weight of debt.

Having said the above; Fitz needs to go or the IRFU should get tough.

My motivation is simple: I was told that I was wrong to see the debts as an issue. Therefore, those who claimed that and aimed their vitriol to me should be showing themselves in this thread with a little mea culpa. Naturally, none of them have done.

Why should Munster take €10m off the rest of the game in Ireland? This 'Musketeer' approach is stopping at least one Branch competing with the best in Europe.

Pot Hale wrote:He has a point though, doesn't he?

The unwillingness of the average Irish rugby follower to even address the financial situation of the game is bewildering. Maybe it is because of the effect of the Golden Generation and the huge input of finance into the game means that many now following the game had little exposure to it pre 1997. Therefore, they are just used to somebody else paying for success and they don't care where the money comes from or how it gets there.

A little 'austerity' for a few years will see an interesting pressure on the Irish game to see if the support numbers will uphold during times without relative success. Last years figures suggest that what has happened in Wales (terrible kick off times, a lack of relative investment in the pro game compared to the top end) has seen people vote with their wallets.

Sad news. The European game needs a strong Munster.

PhilBB wrote:

Munchkin wrote:I would question the motivation rather than the point, and the point is something many of us suspected anyway. I'm all for giving Munster all the time they need to repay the loan, and if it doesn't happen it's not the end of the world. We need a strong Munster. Not one struggling under the weight of debt. Having said the above; Fitz needs to go or the IRFU should get tough.

My motivation is simple: I was told that I was wrong to see the debts as an issue. Therefore, those who claimed that and aimed their vitriol to me should be showing themselves in this thread with a little mea culpa. Naturally, none of them have done. Why should Munster take €10m off the rest of the game in Ireland? This 'Musketeer' approach is stopping at least one Branch competing with the best in Europe.

Phil, seeking apologies on a rugby discussion board for inflammatory or inaccurate comments that others have made is, in my view, an exercise in futility. I think we all might be somewhat guilty of having done the same, don't you think?

The Thomond debt has been discussed previously - by Munster fans in particular - for some years so it's not as if they weren't aware of it. Last season's team and consequent financial results have brought it under much greater scrutiny with the need for a bailout from IRFU. Equally, it shouldn't be forgotten that Munster made a substantial contribution to Irish rugby finances during the noughties when they were very successful so some forbearance is due in part for that.

Looking at it, the whole funding and payment methods in Ireland are at best, very sketchy, how you can have people who are nothing to do with an organisation paying players this has to be above the law ? But, that is the IRFU's issues.

I will agree as well that the Welsh regions need to sort themselves out, and I have argued this with ALL the Welsh members on here.

LordDowlais wrote:Looking at it, the whole funding and payment methods in Ireland are at best, very sketchy, how you can have people who are nothing to do with an organisation paying players this has to be above the law ?

Could you explain that convoluted sentence, I don't understand it.

Pot Hale wrote:

LordDowlais wrote:Looking at it, the whole funding and payment methods in Ireland are at best, very sketchy, how you can have people who are nothing to do with an organisation paying players this has to be above the law ?

Could you explain that convoluted sentence, I don't understand it.

I think you do, but you are just trying to be clever, and failing.

What I mean is, you have outside influences financing a team it has nothing to do with, does this extra money get declared ? Do they pay taxes on it ? How does it get payed ? Do other provinces get this privilege ?

bathmad wrote:Sad news. The European game needs a strong Munster.

What makes you think so?

PhilBB wrote:

Munchkin wrote:I would question the motivation rather than the point, and the point is something many of us suspected anyway.

I'm all for giving Munster all the time they need to repay the loan, and if it doesn't happen it's not the end of the world. We need a strong Munster. Not one struggling under the weight of debt.

Having said the above; Fitz needs to go or the IRFU should get tough.

My motivation is simple: I was told that I was wrong to see the debts as an issue. Therefore, those who claimed that and aimed their vitriol to me should be showing themselves in this thread with a little mea culpa. Naturally, none of them have done.

Why should Munster take €10m off the rest of the game in Ireland? This 'Musketeer' approach is stopping at least one Branch competing with the best in Europe.

Any debt is an issue, but the question should be how much of an issue? I don't believe the Munster debt is a massive issue. My hope would be that Munster get rid of Fitz, become a success on and off the field, and clear the debt. Clearing the debt first would be putting the cart before the horse though. I think Munster should be given all the time they need to rebuild, without the pressure of paying debt, but only if there's a change at the top. Fitz has to go.

Munchkin wrote: I think Munster should be given all the time they need to rebuild, without the pressure of paying debt.

Would other teams in the league be afforded this luxury? That's a pretty extraordinary statement you've made there in terms of professional sports teams.

LordDowlais wrote:What I mean is, you have outside influences financing a team it has nothing to do with, does this extra money get declared ? Do they pay taxes on it ? How does it get payed ? Do other provinces get this privilege ?

I think you are confusing Munster's funding model with Saracens awaits vengeful reply from Beshocked

Irish Londoner wrote:

LordDowlais wrote:What I mean is, you have outside influences financing a team it has nothing to do with, does this extra money get declared ? Do they pay taxes on it ? How does it get payed ? Do other provinces get this privilege ?

I think you are confusing Munster's funding model with Saracens awaits vengeful reply from Beshocked

I think you will find that some of the Irish provinces are being funded by rich businessmen and that funding does not necessarily get shown on the branches accounts. There must be some sort of legal issues there. But as I have said, that's the IRFU's problem.

Dai Llewod wrote:

Munchkin wrote: I think Munster should be given all the time they need to rebuild, without the pressure of paying debt.

Would other teams in the league be afforded this luxury? That's a pretty extraordinary statement you've made there in terms of professional sports teams.

Only if it's a luxury that their Unions can afford, and are willing to pay for.

It isn't extraordinary. It makes perfect sense. The loan has been made, Munster are struggling to pay that loan. The most effective way for Munster to repay that loan is for Munster to succeed, on and off the field. Shackling Munster to the terms of repayment will not bring about the success they need in order to repay that loan. Allowing them the time needed to rebuild, to become a success, is the most effective means. Otherwise Munster fail and no loan is repaid. which in turn hurts the IRFU and the other three Provinces. Nobody wins.

Munchkin wrote:

Dai Llewod wrote:

Munchkin wrote: I think Munster should be given all the time they need to rebuild, without the pressure of paying debt.

Would other teams in the league be afforded this luxury? That's a pretty extraordinary statement you've made there in terms of professional sports teams.

Only if it's a luxury that their Unions can afford, and are willing to pay for.

It isn't extraordinary. It makes perfect sense. The loan has been made, Munster are struggling to pay that loan. The most effective way for Munster to repay that loan is for Munster to succeed, on and off the field. Shackling Munster to the terms of repayment will not bring about the success they need in order to repay that loan. Allowing them the time needed to rebuild, to become a success, is the most effective means. Otherwise Munster fail and no loan is repaid. which in turn hurts the IRFU and the other three Provinces. Nobody wins.

So what we've established here is that:

1) Munster signed a repayment scheme. Then broke it because they couldn't afford to pay it. Now they don't have to adhere to that repayment scheme.

2) Other teams in the league are at a complete and utter disadvantage to a Union owned team like Munster, because the high street banks that they have to make repayments to, will certainly not be as kind if they fail to meet repayments, thereby completely hindering facilities such as their recruitment policy.

It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

Dai Llewod wrote:

Munchkin wrote:

Dai Llewod wrote:

Munchkin wrote: I think Munster should be given all the time they need to rebuild, without the pressure of paying debt.

Would other teams in the league be afforded this luxury? That's a pretty extraordinary statement you've made there in terms of professional sports teams.

Only if it's a luxury that their Unions can afford, and are willing to pay for.

It isn't extraordinary. It makes perfect sense. The loan has been made, Munster are struggling to pay that loan. The most effective way for Munster to repay that loan is for Munster to succeed, on and off the field. Shackling Munster to the terms of repayment will not bring about the success they need in order to repay that loan. Allowing them the time needed to rebuild, to become a success, is the most effective means. Otherwise Munster fail and no loan is repaid. which in turn hurts the IRFU and the other three Provinces. Nobody wins.

So what we've established here is that:

1) Munster signed a repayment scheme. Then broke it because they couldn't afford to pay it. Now they don't have to adhere to that repayment scheme.

2) Other teams in the league are at a complete and utter disadvantage to a Union owned team like Munster, because the high street banks that they have to make repayments to, will certainly not be as kind if they fail to meet repayments, thereby completely hindering facilities such as their recruitment policy.

It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

Boo hoo. Sure who cares about a level playing field? It's all about the money. Long live the Toulons of the Rugby Union world.

Anyway, just lobby the Regions owners to cough up more money. You can't really expect WRU to pay for private businesses they don't own, although I do remember the WRU (The Regions Bank) having to bail the Regions out with a loan. What were the terms of that loan?

Munchkin wrote:

Boo hoo. Sure who cares about a level playing field? It's all about the money. Long live the Toulons of the Rugby Union world.

Anyway, just lobby the Regions owners to cough up more money. You can't really expect WRU to pay for private businesses they don't own, although I do remember the WRU (The Regions Bank) having to bail the Regions out with a loan. What were the terms of that loan?

I'm not sure that's the most constructive post on the subject.

The loan was given because the ERC refused to pay the regions money. Beyond their control. You can't really equate that with a failing province that can't begin to pay 9 million Euros of debt but yet sees absolutely no significant reduction in their ability to keep running.

LordDowlais wrote:

Pot Hale wrote:

LordDowlais wrote:Looking at it, the whole funding and payment methods in Ireland are at best, very sketchy, how you can have people who are nothing to do with an organisation paying players this has to be above the law ?

Could you explain that convoluted sentence, I don't understand it.

I think you do, but you are just trying to be clever, and failing.

What I mean is, you have outside influences financing a team it has nothing to do with, does this extra money get declared ? Do they pay taxes on it ? How does it get payed ? Do other provinces get this privilege ?

Yes.
Yes.
And yes

Dai Llewod wrote:

Munchkin wrote:

Boo hoo. Sure who cares about a level playing field? It's all about the money. Long live the Toulons of the Rugby Union world.

Anyway, just lobby the Regions owners to cough up more money. You can't really expect WRU to pay for private businesses they don't own, although I do remember the WRU (The Regions Bank) having to bail the Regions out with a loan. What were the terms of that loan?

I'm not sure that's the most constructive post on the subject.

The loan was given because the ERC refused to pay the regions money. Beyond their control. You can't really equate that with a failing province that can't begin to pay 9 million Euros of debt but yet sees absolutely no significant reduction in their ability to keep running.

Well, it was as constructive as moaning. "it's not fair".

You brushed over the point I was making. I was making the point that you complain about the IRFU behaving as a bank for the Provinces, when the Regions can be said to benefit as much from the WRU. I know why the loan was given, it's the source of the loan I was getting at.

Munster are a branch of the IRFU. Munster are IRFU owned. Unlike the Regions, Munster are not a private business. If Munster was to fail, it not only has a negative impact on the IRFU, but also the other Provinces. There really isn't the option of allowing Munster to fail, especially when Munsters failings can be reversed with good management. If Munster fails, nobody wins. Munster must be given time, and help needed, to turn things around. I do believe their CEO must be replaced in order for that to happen though. They can recover from this. I have already made these points, but you don't seem to understand.

PhilBB wrote:
Why should Munster take €10m off the rest of the game in Ireland? This 'Musketeer' approach is stopping at least one Branch competing with the best in Europe.

The IRFU gave the FAI a massive loan a year or two back of €33m I believe. The stadium is practically paid off already so I don't think they're short. Obviously you have to be prepared for a rainy day but Leinster, Connacht or Ulster won't be affected by a €10m loan to Munster. Munster will have to pay that back which will be a challenge for Munster but thats the nature of business. They'll have a stadium to show for it.

profitius wrote:

PhilBB wrote:
Why should Munster take €10m off the rest of the game in Ireland? This 'Musketeer' approach is stopping at least one Branch competing with the best in Europe.

The IRFU gave the FAI a massive loan a year or two back of €33m I believe. The stadium is practically paid off already so I don't think they're short. Obviously you have to be prepared for a rainy day but Leinster, Connacht or Ulster won't be affected by a €10m loan to Munster. Munster will have to pay that back which will be a challenge for Munster but thats the nature of business. They'll have a stadium to show for it.

Quite right, Profitius - they have an asset to show for it. Albeit a loss-making asset currently. Munster have to cut their cloth, and Browne has pointed the way with his no more foreign players edict to the provinces. (As an aside, I wonder does that apply to foreign players who might become residency qualified?)

The provinces could respond to the belt-tightening with seeking to get more or all of gate monies from European competitions at knockout stages - a further incentive for them. If I recall correctly, the IRFU keeps 50% of the gates from knockout stages, but I may have this wrong.

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

OK a fair point, replace bank with "sources of funding beyond TV and gate money" if you like.

Prepared to be corrected but I'd lay good odds that there are no more than a half a dozen clubs in the TOP14, PRO12 and Avivia combined at most that are financially viable purely on what revenues the club generate - I know Leicester used to be and maybe Harlequins.

Irish Londoner wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

OK a fair point, replace bank with "sources of funding beyond TV and gate money" if you like.

Prepared to be corrected but I'd lay good odds that there are no more than a half a dozen clubs in the TOP14, PRO12 and Avivia combined at most that are financially viable purely on what revenues the club generate - I know Leicester used to be and maybe Harlequins.

But the point that you and Munchkin seem to not get, is that Munster can seemingly go into this amount of debt and not have to worry about it. Other teams in the same league do not have that luxury, because they live in the real world with banks, inflation and interest rates, and therefore have to live within their means. If you do not see how that is an immediate disadvantage then it's probably a safe bet hat this conversation isn't going to go anywhere.

Look, I have no gripe about the Irish system, it suits them, and it suits them well. Good for them. But what people are not looking at is, we have a league of different types of enterprises. When we are competing in the Pro12, and people need to realise this, who are the Welsh regions competing against ? Other teams, or other unions ?

The 4 teams from Wales, are not competing with teams on an even keel because they are being backed by their union juggernauts, private owned teams need to worry about their finances, union run teams it would seem do not.

If any of the four regions were in as much debt as Munster, they would not be here now.

LordDowlais wrote:Look, I have no gripe about the Irish system, it suits them, and it suits them well. Good for them. But what people are not looking at is, we have a league of different types of enterprises. When we are competing in the Pro12, and people need to realise this, who are the Welsh regions competing against ? Other teams, or other unions ?

The 4 teams from Wales, are not competing with teams on an even keel because they are being backed by their union juggernauts, private owned teams need to worry about their finances, union run teams it would seem do not.

If any of the four regions were in as much debt as Munster, they would not be here now.

Exactly.

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

OK a fair point, replace bank with "sources of funding beyond TV and gate money" if you like.

Prepared to be corrected but I'd lay good odds that there are no more than a half a dozen clubs in the TOP14, PRO12 and Avivia combined at most that are financially viable purely on what revenues the club generate - I know Leicester used to be and maybe Harlequins.

But the point that you and Munchkin seem to not get, is that Munster can seemingly go into this amount of debt and not have to worry about it. Other teams in the same league do not have that luxury, because they live in the real world with banks, inflation and interest rates, and therefore have to live within their means. If you do not see how that is an immediate disadvantage then it's probably a safe bet hat this conversation isn't going to go anywhere.

It depends on the kind of debt. Munster's debt was to redevelop its stadia (both of them). They have not been spunking all their cash on players. Munster own two redeveloped stadia with a total debt of €9m that can also earn money for them. For instance, Inter Milan are playing Celtic there in a week or so, Musgrave Park hosted Nitro Circus a few weeks ago.

Lets not forget that the IRFU blocked Munster from hosting a touring team because they were worried that it would affect international ticket sales to the Aviva. The IRFU also sold the naming rights of the Aviva which has a condition that no international can be played outside of the Aviva. The IRFU had previously agreed that Munster could hold minor internationals there (such as US, Canada, Fiji).

Munster had to develop its own stadia, unlike most other teams who have access to football stadia, dog tracks or horse show arenas.

Initiatives Munster have undertaken to sort their finances:
1. Single training centre in Limerick (instead of one in Limerick and one in Cork which required doubling of staff and facilities)
2. Sold naming rights of Musgrave Park
3. Annual London Dinner/Award scheme for Munster supporters living in UK in Grosvenor House hotel.
4. Patron Scheme - Corporate Sponsors that agree to fund Munster for 100K per annum for 3 years (Munster have 2 at the moment).
5. Patron Scheme - Individuals - Up to 30K per annum over 3 years. Munster has 30 of these and it is limitless the number they can take on. Last year this scheme raised €2m. Doug Howlett is the Corporate Ambasador.
6. New 9.5m Training Centre in University of Limerick. Munster has also acquired the European Franchise for an American Corporate Training Programme which will use Munster professional staff (nutrition, health and fitness etc).
7. Sales of 5 & 10 year seats are coming up for renewal in 2017.

The difference between Munster and a lot of clubs is that Munster didn't spunk its money on wages. Its got the ability to develop other revenue streams from their investment.

Munchkin wrote:

Dai Llewod wrote:

Munchkin wrote:

Boo hoo. Sure who cares about a level playing field? It's all about the money. Long live the Toulons of the Rugby Union world.

Anyway, just lobby the Regions owners to cough up more money. You can't really expect WRU to pay for private businesses they don't own, although I do remember the WRU (The Regions Bank) having to bail the Regions out with a loan. What were the terms of that loan?

I'm not sure that's the most constructive post on the subject.

The loan was given because the ERC refused to pay the regions money. Beyond their control. You can't really equate that with a failing province that can't begin to pay 9 million Euros of debt but yet sees absolutely no significant reduction in their ability to keep running.

Well, it was as constructive as moaning. "it's not fair".

You brushed over the point I was making. I was making the point that you complain about the IRFU behaving as a bank for the Provinces, when the Regions can be said to benefit as much from the WRU. I know why the loan was given, it's the source of the loan I was getting at.

Munster are a branch of the IRFU. Munster are IRFU owned. Unlike the Regions, Munster are not a private business. If Munster was to fail, it not only has a negative impact on the IRFU, but also the other Provinces. There really isn't the option of allowing Munster to fail, especially when Munsters failings can be reversed with good management. If Munster fails, nobody wins. Munster must be given time, and help needed, to turn things around. I do believe their CEO must be replaced in order for that to happen though. They can recover from this. I have already made these points, but you don't seem to understand.

Was it even technically a loan. Didn't the ERC money go to the WRU and the WRU then sent it on to the regions? Was it not really just a case of the WRU keeping up with paying the regions the amount that they would have done anyway, and then the union waiting for their money from the ERC? I know the press termed it a 'loan', but that doesn't actually make it true.

Didn't the WRU bail out the Dragons?

Sin é wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

OK a fair point, replace bank with "sources of funding beyond TV and gate money" if you like.

Prepared to be corrected but I'd lay good odds that there are no more than a half a dozen clubs in the TOP14, PRO12 and Avivia combined at most that are financially viable purely on what revenues the club generate - I know Leicester used to be and maybe Harlequins.

But the point that you and Munchkin seem to not get, is that Munster can seemingly go into this amount of debt and not have to worry about it. Other teams in the same league do not have that luxury, because they live in the real world with banks, inflation and interest rates, and therefore have to live within their means. If you do not see how that is an immediate disadvantage then it's probably a safe bet hat this conversation isn't going to go anywhere.

It depends on the kind of debt. Munster's debt was to redevelop its stadia (both of them). They have not been spunking all their cash on players. Munster own two redeveloped stadia with a total debt of €9m that can also earn money for them. For instance, Inter Milan are playing Celtic there in a week or so, Musgrave Park hosted Nitro Circus a few weeks ago.

Lets not forget that the IRFU blocked Munster from hosting a touring team because they were worried that it would affect international ticket sales to the Aviva. The IRFU also sold the naming rights of the Aviva which has a condition that no international can be played outside of the Aviva. The IRFU had previously agreed that Munster could hold minor internationals there (such as US, Canada, Fiji).

Munster had to develop its own stadia, unlike most other teams who have access to football stadia, dog tracks or horse show arenas.

Initiatives Munster have undertaken to sort their finances:
1. Single training centre in Limerick (instead of one in Limerick and one in Cork which required doubling of staff and facilities)
2. Sold naming rights of Musgrave Park
3. Annual London Dinner/Award scheme for Munster supporters living in UK in Grosvenor House hotel.
4. Patron Scheme - Corporate Sponsors that agree to fund Munster for 100K per annum for 3 years (Munster have 2 at the moment).
5. Patron Scheme - Individuals - Up to 30K per annum over 3 years. Munster has 30 of these and it is limitless the number they can take on. Last year this scheme raised €2m. Doug Howlett is the Corporate Ambasador.
6. New 9.5m Training Centre in University of Limerick. Munster has also acquired the European Franchise for an American Corporate Training Programme which will use Munster professional staff (nutrition, health and fitness etc).
7. Sales of 5 & 10 year seats are coming up for renewal in 2017.

The difference between Munster and a lot of clubs is that Munster didn't spunk its money on wages. Its got the ability to develop other revenue streams from their investment.

Surely it doesn't really matter what you are blowing your cash on, or even what plans you have in the future to pull things back. The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Sin é wrote:Didn't the WRU bail out the Dragons?

Sorry to do this, but this is 606v2, link?

ScarletSpiderman wrote:The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Only for some teams in the Pro12. Not all of them.

ScarletSpiderman wrote:

Sin é wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:

Irish Londoner wrote:

Dai Llewod wrote:It is therefore blatantly obvious that this is a league that is in no way, shape or form a level playing field.

So it's just like every other league in sport then, some teams have more money, richer investors or a more understanding bank manager than others ?

No, not at all. Because some teams in this league don't need banks, and others do.

OK a fair point, replace bank with "sources of funding beyond TV and gate money" if you like.

Prepared to be corrected but I'd lay good odds that there are no more than a half a dozen clubs in the TOP14, PRO12 and Avivia combined at most that are financially viable purely on what revenues the club generate - I know Leicester used to be and maybe Harlequins.

But the point that you and Munchkin seem to not get, is that Munster can seemingly go into this amount of debt and not have to worry about it. Other teams in the same league do not have that luxury, because they live in the real world with banks, inflation and interest rates, and therefore have to live within their means. If you do not see how that is an immediate disadvantage then it's probably a safe bet hat this conversation isn't going to go anywhere.

It depends on the kind of debt. Munster's debt was to redevelop its stadia (both of them). They have not been spunking all their cash on players. Munster own two redeveloped stadia with a total debt of €9m that can also earn money for them. For instance, Inter Milan are playing Celtic there in a week or so, Musgrave Park hosted Nitro Circus a few weeks ago.

Lets not forget that the IRFU blocked Munster from hosting a touring team because they were worried that it would affect international ticket sales to the Aviva. The IRFU also sold the naming rights of the Aviva which has a condition that no international can be played outside of the Aviva. The IRFU had previously agreed that Munster could hold minor internationals there (such as US, Canada, Fiji).

Munster had to develop its own stadia, unlike most other teams who have access to football stadia, dog tracks or horse show arenas.

Initiatives Munster have undertaken to sort their finances:
1. Single training centre in Limerick (instead of one in Limerick and one in Cork which required doubling of staff and facilities)
2. Sold naming rights of Musgrave Park
3. Annual London Dinner/Award scheme for Munster supporters living in UK in Grosvenor House hotel.
4. Patron Scheme - Corporate Sponsors that agree to fund Munster for 100K per annum for 3 years (Munster have 2 at the moment).
5. Patron Scheme - Individuals - Up to 30K per annum over 3 years. Munster has 30 of these and it is limitless the number they can take on. Last year this scheme raised €2m. Doug Howlett is the Corporate Ambasador.
6. New 9.5m Training Centre in University of Limerick. Munster has also acquired the European Franchise for an American Corporate Training Programme which will use Munster professional staff (nutrition, health and fitness etc).
7. Sales of 5 & 10 year seats are coming up for renewal in 2017.

The difference between Munster and a lot of clubs is that Munster didn't spunk its money on wages. Its got the ability to develop other revenue streams from their investment.

Surely it doesn't really matter what you are blowing your cash on, or even what plans you have in the future to pull things back.  The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Of course it matters what your are blowing your money on. Out of curiosity, do you know anyone who has bought and paid for their house upfront with cash saved?

ScarletSpiderman wrote:

Sin é wrote:Didn't the WRU bail out the Dragons?

Sorry to do this, but this is 606v2, link?

I don't have a link. Thats why I'm asking. Did the Dragons sell a stake to the WRU?

Sin é wrote:Of course it matters what your are blowing your money on. Out of curiosity, do you know anyone who has bought and paid for their house upfront with cash saved?

No it doesn't matter what money has been spent on. If you buy a house using a mortgage and you fail to make your repayments on time you lose your house. If you get totally wasted every night and put it all on your credit card, and then fail to pay your instalments on time, guess what the repo men come and take your house (unless you don't own one, and they take your car etc instead). Regardless of what you the reasoning for getting into debt is, the truth is if you don't repay it as you agreed then you are in poop street.

I don't know anyone who has bought a house without a mortgage, but I also don't know anyone who has failed to pay their mortgage for a year without the bank repossessing it.

Sin é wrote:

ScarletSpiderman wrote:

Sin é wrote:Didn't the WRU bail out the Dragons?

Sorry to do this, but this is 606v2, link?

I don't have a link. Thats why I'm asking. Did the Dragons sell a stake to the WRU?

I actually looked for it on tinterweb myself, and couldn't find it either. Guessing it must be that old news, that it is buried behind numerous other webpages with Dragons, WRU, and Shares mentioned. I believe it was Ebbw Vale RFC who sold their shares in the Dragons to the WRU, and the WRU have been sleeping partners in the Dragons since. Also the Dragons are/have bought them back.

Dai Llewod wrote:

ScarletSpiderman wrote:The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Only for some teams in the Pro12. Not all of them.

I meant in life in general.

ScarletSpiderman wrote:

Dai Llewod wrote:

ScarletSpiderman wrote:The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Only for some teams in the Pro12. Not all of them.

I meant in life in general.

Point remains.

Dai Llewod wrote:

ScarletSpiderman wrote:The simple fact is that if you are in debt and unable to pay it off, then you are in poop street.

Only for some teams in the Pro12. Not all of them.

Youse lads should join a league where this can't happen. Where if a side were to go.... I dunno.... Say 40 million sterling in debt they would go bang and not get a bail out. Where there would be a strict salary cap that all teams stuck to and......

Hey does anyone know of a league like that? One that it would be handy to get to from Wales?

ScarletSpiderman wrote:

Sin é wrote:Of course it matters what your are blowing your money on. Out of curiosity, do you know anyone who has bought and paid for their house upfront with cash saved?

No it doesn't matter what money has been spent on.  If you buy a house using a mortgage and you fail to make your repayments on time you lose your house.  If you get totally wasted every night and put it all on your credit card, and then fail to pay your instalments on time, guess what the repo men come and take your house (unless you don't own one, and they take your car etc instead).  Regardless of what you the reasoning for getting into debt is, the truth is if you don't repay it as you agreed then you are in poop street.

I don't know anyone who has bought a house without a mortgage, but I also don't know anyone who has failed to pay their mortgage for a year without the bank repossessing it.

You don't lose your house if you miss one mortgage repayment*, particularly if you are not in negative equity (i.e., the outstanding part of the mortgage is less than 25% of the total value).  You might use your credit card though if you are not making repayments and you are spunking your money on beer.

*Oh, and the bank prevented you from hosting events that would have covered the mortgage repayment.

LordDowlais wrote:Look, I have no gripe about the Irish system, it suits them, and it suits them well. Good for them. But what people are not looking at is, we have a league of different types of enterprises. When we are competing in the Pro12, and people need to realise this, who are the Welsh regions competing against ? Other teams, or other unions ?

The 4 teams from Wales, are not competing with teams on an even keel because they are being backed by their union juggernauts, private owned teams need to worry about their finances, union run teams it would seem do not.

If any of the four regions were in as much debt as Munster, they would not be here now.

LD, except they could be. The IRFU is limited by its own income and the Regions are reliant on the WRU too hence the NDCs.

Privately owned teams aren't just reliant on what income they generate but what their owners can pump into them, in Saracens case they are overly reliant on theirs, in Toulons case they developed a business plan that meant they could evolve to be self reliant. In the Provinces case they are overly reliant on the IRFU.

The IRFU are wanting to evolve, theirs, the provinces and Pro12s to increase and improve revenue streams.

Ulster were able to generate serious income from selling the naming rights to Ravenhill, this has helped finance the Piutau and Coetzee deals.

Sin é wrote:

ScarletSpiderman wrote:

Sin é wrote:Of course it matters what your are blowing your money on. Out of curiosity, do you know anyone who has bought and paid for their house upfront with cash saved?

No it doesn't matter what money has been spent on.  If you buy a house using a mortgage and you fail to make your repayments on time you lose your house.  If you get totally wasted every night and put it all on your credit card, and then fail to pay your instalments on time, guess what the repo men come and take your house (unless you don't own one, and they take your car etc instead).  Regardless of what you the reasoning for getting into debt is, the truth is if you don't repay it as you agreed then you are in poop street.

I don't know anyone who has bought a house without a mortgage, but I also don't know anyone who has failed to pay their mortgage for a year without the bank repossessing it.

You don't lose your house if you miss one mortgage repayment*, particularly if you are not in negative equity (i.e., the outstanding part of the mortgage is less than 25% of the total value).  You might use your credit card though if you are not making repayments and you are spunking your money on beer.

*Oh, and the bank prevented you from hosting events that would have covered the mortgage repayment.

Missing one repayment on a mortgage is failing to pay for 1 month, failure to pay 12 months repayments would certainly see you out on your ear, especially if it is 'unlikely' that you will make the following 12 months repayments too.

Sections From http://www.irishtimes.com/sport/rugby/international/irfu-chief-does-not-believe-munster-can-make-debt-repayments-1.2723985 wrote:“There was no repayment received this year in respect of the Munster loan which relates to Thomond Park, ” said Grace.

A €200,000 payment was due last April with €4.2 million due in April 2017 and €500,000 to be paid every year until 2026 with a final lump sum of €761,778 expected in 2027.

Sections From http://www.irishtimes.com/sport/rugby/international/irfu-chief-does-not-believe-munster-can-make-debt-repayments-1.2723985 wrote:However, the Munster debt remains a serious concern as the radically changing nature of the northern hemisphere club scene threatens to reduce Irish provinces to second-tier competitors.

Browne was asked if it is realistic to expect Munster to be able to make a payment of €4.2 million next April?
“At the moment probably not,” he responded.
Can he see the €500,000 being repaid annually over the next 10 years?
“At the moment that is probably not possible.

Honestly, try looking at those with Browne being the bank manager, and Munster being a home owner, it is obvious that they would very quickly be a former home owner.

ScarletSpiderman wrote:

Sin é wrote:

ScarletSpiderman wrote:

Sin é wrote:Of course it matters what your are blowing your money on. Out of curiosity, do you know anyone who has bought and paid for their house upfront with cash saved?

No it doesn't matter what money has been spent on.  If you buy a house using a mortgage and you fail to make your repayments on time you lose your house.  If you get totally wasted every night and put it all on your credit card, and then fail to pay your instalments on time, guess what the repo men come and take your house (unless you don't own one, and they take your car etc instead).  Regardless of what you the reasoning for getting into debt is, the truth is if you don't repay it as you agreed then you are in poop street.

I don't know anyone who has bought a house without a mortgage, but I also don't know anyone who has failed to pay their mortgage for a year without the bank repossessing it.

You don't lose your house if you miss one mortgage repayment*, particularly if you are not in negative equity (i.e., the outstanding part of the mortgage is less than 25% of the total value).  You might use your credit card though if you are not making repayments and you are spunking your money on beer.

*Oh, and the bank prevented you from hosting events that would have covered the mortgage repayment.

Missing one repayment on a mortgage is failing to pay for 1 month, failure to pay 12 months repayments would certainly see you out on your ear, especially if it is 'unlikely' that you will make the following 12 months repayments too.

Sections From http://www.irishtimes.com/sport/rugby/international/irfu-chief-does-not-believe-munster-can-make-debt-repayments-1.2723985 wrote:“There was no repayment received this year in respect of the Munster loan which relates to Thomond Park, ” said Grace.

A €200,000 payment was due last April with €4.2 million due in April 2017 and €500,000 to be paid every year until 2026 with a final lump sum of €761,778 expected in 2027.

Sections From http://www.irishtimes.com/sport/rugby/international/irfu-chief-does-not-believe-munster-can-make-debt-repayments-1.2723985 wrote:However, the Munster debt remains a serious concern as the radically changing nature of the northern hemisphere club scene threatens to reduce Irish provinces to second-tier competitors.

Browne was asked if it is realistic to expect Munster to be able to make a payment of €4.2 million next April?
“At the moment probably not,” he responded.
Can he see the €500,000 being repaid annually over the next 10 years?
“At the moment that is probably not possible.

Honestly, try looking at those with Browne being the bank manager, and Munster being a home owner, it is obvious that they would very quickly be a former home owner.

Read this bit:

IRFU wrote:
A €200,000 payment was due last April  with €4.2 million due in April 2017 and €500,000 to be paid every year until 2026 with a final lump sum of €761,778 expected in 2027.

I don't know about the UK, but in Ireland they don't throw people out of their home if they have 75% of their mortgage paid and they have missed one instalment of their mortgage.

Oh, and for the record, the author of that piece in the Irish Times, Gavin Cummiskey, has a bit of an agenda against Munster. Worse still, is that he knows little or nothing about Munster as evidenced in a radio programme when he was surprised to hear that Munster operated out of two training centres!

As for Munster not repaying the 9m loan. I hope they dig their heals in. Munster has done a lot of the heavy lifting for Irish rugby in the 00s (just think of all those merit payments, half of knockout gates, prize money etc. that Munster earned and where went directly into the IRFU coffers).

Its payback time now that the other Provinces are up on their feet.

Sin é, I get your point it is only one repayment, as they only pay one a year.  But it is still a years repayment that has not been paid.  There are only 12 repayment dates (if I read the article correct), so that is like missing out on 8% of your mortgage repayments, which for the average mortgage these days would be not paying it of 33 months.  Definitely the house would be repossessed and up for auction (I believe that is how it is done).

I see your point, and sort of agree, that Munster did a huge deal of Irish rugby at the start of the millennium and they are due a bit of assistance from the rest of them.

*as a Scarlets fan, I do sympathies with you, we have certain journos that look for any chance to put the knife in too. Generally with stories very similar to this one *

ScarletSpiderman wrote:Sin é, I get your point it is only one repayment, as they only pay one a year.  But it is still a years repayment that has not been paid.  There are only 12 repayment dates (if I read the article correct), so that is like missing out on 8% of your mortgage repayments, which for the average mortgage these days would be not paying it of 33 months.  Definitely the house would be repossessed and up for auction (I believe that is how it is done).

I see your point, and sort of agree, that Munster did a huge deal of Irish rugby at the start of the millennium and they are due a bit of assistance from the rest of them.

*as a Scarlets fan, I do sympathies with you, we have certain journos that look for any chance to put the knife in too.  Generally with stories very similar to this one *

The actual payment schedule is listed in the IRFU Annual Report. It reflects the payment events that Sin e is talking about. Eg 10 year debenture sales next year.

Comparisons with a mortgage are not really accurate The stadium is an asset that the ITFU own 50% of it through the Stadium company.

If mortgage payments are not met, a bank will generally seek to re-structure the loan so that payments become affordable - perhaps over a longer period of time.

Frankly, I would not have agreed to a loan payment term of 10 years on an asset that is depreciated over 20 years.