Historic Results post 2003 - IRFU Branches v PRW

Munchkin wrote:

Pot Hale wrote:

Munchkin wrote:Yep, Sterling work Pot. Nice to see another 606 myth put to bed. And then we have the evidence that the WRU act as Bank to the Regions. Good that they do, but maybe those that accused the IRFU as acting as a Bank for the Provinces (just one of the reasons it was all so unfair on the Regions ..... allegedly ) will now come to realise that as one finger points forward, three are pointing back.

I'm by no means an expert on any of these matters.  And not an accountant.  But I do run businesses and I regularly transact sterling/euro amounts every month so have some idea about rates, etc.

I don't think that there was a myth per se.    But it would certainly appear that there is a disparity in the amount of Competition income each Union receives from the same competitions.  A fair expectation given the overall performances of the Irish provinces in PRO12 and in Europe would be that the IRFU would receive more money, not less, or even par amounts.   In the figures above, you can see this occurred in one year 2012, where the amount of money received by the IRFU was greater than what WRU received.  

The foreign exchange rates I've used are from historical forex sites which detail exchange rate on any given day or range of days and then gives you an average since we don't know when specific monies were transacted.   The WRU accounts state that they have foreign exchange risks as part of their business operations and where necessary to mitigate that, they buy forward contracts which would give them a guaranteed rate (albeit lower than market rate).  However, they say they had no risks in the last year, and it was Nil in 2015 as well.  Thus it's likely they bought at best market rates where any forex was required.   

Of course, it's entirely possible that Celtic Rugby has sterling accounts as part of its operation since it would have regular sterling suppliers such as BBC Wales, NI and Alba, so there may have been no need to convert at all.  Hence I picked an average for the WRU financial year in which the monies arose. 


I think it's over-reaching to say that the WRU acts as Bank to the Regions.  And somewhat provocative.  

As Phil referred earlier, the short-term loans issued by the WRU under their RCF (Revolving Credit Facility) to the Regions is for three fixed amounts over three years - 1.3m, 1.3m and 1.0m.  The loans are then due to be paid back by the Regions in the following years.

It also serves as guarantor on small amounts that the Regions receive as loans e.g. in this year's accounts:

"The Company has guaranteed the performance of the four Regions in respect of loans that the Regions have received from Barclays Bank PLC. The amounts guaranteed are £0.5m (2015: nil)."

They're not huge amounts and the Report clearly references Barclays as the regions' bankers.  They also are bankers for WRU.

The myth being that the Regions broadcasting revenue is split equally among the Welsh, Scottish and Irish. The WRU Bank was a dig at those who claim the same for the IRFU.

Good work, anyway. It takes time to search through things, and argue the different points made

Munchkin wrote:
It is simple.

Pot Hale wrote:
And you agree there is a disparity.  Do you accept that the WRU received more Competition Income than the IRFU did?

Pot Hale wrote:Hmmm.  No answer.

Pot Hale wrote:Competition Income 2011-2016

Year - WRU CI -FOREX Avg - Euro equiv -  IRFU CI  - Difference €
 
2011 9.1m    @1.167459 - €10.624m  - 9.324m -   1.304m
2012 9.2m    @1.183672 - €10.890m  - 11.137m - (0.247m)
2013 9.2m    @1.213918 - €11.168m - 10.763m -  0.405m
2014 8.861m @1.198366 - €10.619m - 10.335m -  0.284m
2015 8.129m @1.314412 - €10.685m - 9.707m -    0.978m
2016 9.7m -  @1.337564 - €12.974m - 10.585m -   2.389m

Total £54.19m -                 €66.96m  - €61.851m - €5.109m

carpet baboon wrote:It's amazing at how angry people can become when there team aint won anything  in years

Munchkin wrote:Yep, Sterling work Pot. Nice to see another 606 myth put to bed. And then we have the evidence that the WRU act as Bank to the Regions. Good that they do, but maybe those that accused the IRFU as acting as a Bank for the Provinces (just one of the reasons it was all so unfair on the Regions ..... allegedly ) will now come to realise that as one finger points forward, three are pointing back.

Pot Hale wrote:
I don't think that there was a myth per se.    But it would certainly appear that there is a disparity in the amount of Competition income each Union receives from the same competitions.

Pot Hale wrote:
The foreign exchange rates I've used are from historical forex sites which detail exchange rate on any given day or range of days and then gives you an average since we don't know when specific monies were transacted.   The WRU accounts state that they have foreign exchange risks as part of their business operations and where necessary to mitigate that, they buy forward contracts which would give them a guaranteed rate (albeit lower than market rate).  However, they say they had no risks in the last year, and it was Nil in 2015 as well.  Thus it's likely they bought at best market rates where any forex was required.   

Pot Hale wrote:
I think it's over-reaching to say that the WRU acts as Bank to the Regions.  And somewhat provocative.  

Munchkin wrote:

The myth being that the Regions broadcasting revenue is split equally among the Welsh, Scottish and Irish. The WRU Bank was a dig at those who claim the same for the IRFU.

Good work, anyway. It takes time to search through things, and argue the different points made

Pot Hale wrote:WRU Annual Reports 2014, 2015, 2016

"Competition income represents amounts received from European Professional Club Rugby (“EPCR”), and Celtic Rugby Limited in consideration for the participation of teams nominated by the Group in the respective tournaments of those entities. To the extent that the nominated teams have participated in those tournaments there is, under the terms of the participation agreements with the nominated teams, an obligation on the Group to remit any competition income, less any costs incurred by the Group in respect of the competitions, to them."

WRU Annual Reports 2015 & 2016

"(iii) Acting as principal in respect of competition income

Assessing whether the Group acts as agent or principal in the receipt of competition incomes requires judgment. The Group receives revenue from the organisers of competitions in which the Regions participate, namely the Pro 12, the European Champions Cup and the European Challenge Cup. The net revenue is passed on to the Regions. The Group assessed the factors presented in the respective agreements with the Regions and the competition providers and concluded that its ability to establish the commercial returns and to perform its contractual commitment to determine the competition participants provided sufficient evidence that it is the principal in the transaction with the relevant competition provider."

PhilBB wrote:

Again, why are you ignoring the LV= Cup income?

PhilBB wrote:

Pot Hale wrote:
And you agree there is a disparity.  Do you accept that the WRU received more Competition Income than the IRFU did?

Last year? Yes. Whether that is to do with the performance of the NGD in the Mickey Mouse Cup, I don't know. Do you?

PhilBB wrote:

Munchkin wrote:

The myth being that the Regions broadcasting revenue is split equally among the Welsh, Scottish and Irish. The WRU Bank was a dig at those who claim the same for the IRFU.

Good work, anyway. It takes time to search through things, and argue the different points made

Erm, that 'myth' hasn't been disproved. All that has happened is that an unequal number of competitions has been compared for competition income.