Not qualifying for Champions Cup could have cost Munster €1m in direct revenue

Irish Examiner

2 days ago

Munster Rugby's annual accounts for 2023-24 and their financial projections for 24-25 perfectly outline the difference between securing a home draw in the knockout stages of both Europe and the URC. What is more difficult to quantify, or even consider for some, is the impact of failing to qualify for the Champions Cup at all.
Munster's Chief Operating Officer Philip Quinn admitted that potential scenario 'did not bear thinking about' when he spoke to the Irish Examiner on Wednesday yet it had been a very real prospect heading into the last two rounds of the URC regular season, as Munster faced a finish outside the top of eight in the standings and a potential pool campaign in the second-tier Challenge Cup.
Both Quinn and interim head coach Ian Costello had been in that boat once before, in 2015-16, with the COO confirming the anecdote that with two games to go in that Pro12 season, then chief executive, the late Garrett Fitzgerald, lay in wait for Anthony Foley and his coaching staff, including Costello, as they entered a meeting room.
'I think one of the lines would have been 'there's about two million reasons for us to win the match at the weekend',' Quinn said on Wednesday of Fitzgerald's address and that Costello's presence that day meant there was no need for a repeat from himself or current CEO Ian Flanagan ahead of this season's must-win games at home to Ulster and Benetton.
'We didn't have to be say anything this time around. They knew. And it's only after the match that you can literally say the next morning when you're texting each other and kind of going, 'yeah, there was this much on the line'.
'But they know already and you don't have to put numbers on this. It's more than that, it's more than just the finances. It's the history of the club, the tradition of the club, everything there.
'They didn't want to be the first team not to qualify for a Champions Cup. That's much bigger than anything else.
'It's very easy to get a caught up in the financial side of things, because it is so important, but the club is bigger than that. It's that tradition, the history, the reputation of the players, the coaching group, everything is on the line.
'That's what makes Munster special, and it's that constant pressure to perform. We're not happy where we're at the moment. We can't be just qualifying for a Champions Cup, qualifying for the URC knockout stages in eighth, seventh, sixth position. We need to be up where we were last year, where you're topping it or up in the top three or four, and the same in the Champions Cup. So they are our ambitions, that doesn't change. It's only this year where we've been down the other end but we'd be confident we'll bounce back. We've some fantastic young players coming through, obviously Clayton (McMillan) coming in (as head coach) as well now on the coaching side is very exciting and we have a fantastic coaching group in general.'
Nevertheless, this season's failure to secure home draws for the knockout stages of both competitions means the break-even cashflow position for 23-24 reported at last night's Munster Branch AGM will be followed a deficit of between €0.5 million and €1m in a year's time.
'Break-even was huge for us last year and we were hopeful that we'd do it again this year and things haven't gone our way.
'If you have a home Champions Cup Round of 16, we're at break-even. That's how close you are, just a penalty kick against Northampton (in the pool stages) and you're in a break-even position. That's the precarious financial model that faces rugby at the moment, and we're no different to other clubs in that regard.'
The consequences of not making the Champions Cup next season would have been serious,' Quinn confirmed.
'How much it would cost us to not qualify for the Champions Cup would have been probably €1m in direct revenue.
'And nobody can really put a number on what the balance is, because the indirect revenue is the things we don't see. We're saying that million would be the two (home ) matches going from Champions Cup to Challenge Cup. But it would also be the impact on other gates and season tickets and everything, and then it's the indirect revenue in terms of just the feeling towards the team, your sponsorship revenue over time, that won't go straight away the following year but it'll go down over time.
'So it's trying to keep all of those (revenues) up.
'We've been here before, and we've had bad years where we've had losses of nearly €2m and we've found a way out of them, and our financial position has improved in the last couple of years.
'Yes, we'll make a loss this year, we'll be able to cover that out of our cash reserves, so that's a positive, but we can't keep making losses. But would it have been existential? I don't think so. I think we would find ways to come back.
'But there would have definitely been cuts. We would have had no choice but to look at our cost base and prioritise certain areas, looking at your strategy, where you need to invest but putting back in other areas then as well.
'So the pressure that's been on the coaching group, the players, and to deliver those performances, it's huge.
'They knew what was on the line, and it's a credit to everyone involved, the stress that they were all under for those games, and I think everyone saw it at the end of the Benetton game here, the utter relief right across the board for everyone was huge.
'And especially the season, there was so many ups and downs. We were flying after La Rochelle and everything looked rosy and then you go to Bordeaux and you have a couple of home losses and suddenly everything had changed the other way again. And then suddenly we bounced back again and you're going to the Shark. That's the joys of Munster, we like doing things the hard way.'