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#Post#: 116568--------------------------------------------------
Re: RFU Annual Report 2023
DIR By: Rocker
Date: December 6, 2023, 3:31 pm
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I think that swapping equity for cash is incredibly stupid!
I don't see that expenditure on professional rugby or the
England team can really be classed as investment. What return is
there from that? Perhaps more fans, perhaps not 🤔
An underlying loss to reserves of £2.2m isn't great.
#Post#: 116575--------------------------------------------------
Re: RFU Annual Report 2023
DIR By: deadlyfrom5yardsout
Date: December 7, 2023, 3:58 am
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wake me up when the accountants have finished.....-:)
#Post#: 116578--------------------------------------------------
Re: RFU Annual Report 2023
DIR By: Mandator
Date: December 7, 2023, 4:54 am
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Presumably the RFU carry insurance against any claims against
them for concussion claims?
#Post#: 116580--------------------------------------------------
Re: RFU Annual Report 2023
DIR By: poorfour
Date: December 7, 2023, 7:41 am
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--- Quote from: Rocker link ---
>
> I think that swapping equity for cash is incredibly stupid!
>
--- End Quote ---
I presume you're referring to the CVC 6N deal. You might be
right but a) it wasn't the RFU's sole choice b) it was probably
necessary for all the unions to dig themselves out of their
COVID debt c) it's only stupid if it doesn't ultmately raise
more revenue than CVC's share. Whether that happens remains to
be seen, but without knowing what the business case for the deal
was it's hard to judge.
--- Quote from: Rocker link ---
>
> I don't see that expenditure on professional rugby or the
England team can really be classed as investment. What return is
there from that? Perhaps more fans, perhaps not 🤔
>
--- End Quote ---
Your view doesn't matter, though, does it? These are statutory
accounts. There are rules about what different things have to be
called, and severe penalties for not categorising them
correctly. A BDO partner has signed it off as correct, so
presumably it is.
--- Quote from: Rocker link ---
>
> An underlying loss to reserves of £2.2m isn't great.
>
--- End Quote ---
Yes but not in the way you think.
The unions and WR run cyclically. Some years they build up
reserves, some years they spend from them. In the case of WR,
historically it has run on an 8 year cycle based around the RWC,
alternating one tournament in a country like NZ or Japan (pretty
big revenues) with one in England or France (huge revenues) and
in the other 6 years, negligible income and a lot of depletion
of reserves.
For unions, it's mostly based on the number of home matches they
have in any given year, and how much they have to spend on
upgrading their stadia. Over the course of a cycle they will
build up reserves and deplete them.
This year, the RFU's revenues were good, because they had a load
of home matches, but not as good as they might have hoped
(people weren't spending as much as usual on hospitality, beer
and merch). They still made a profit of c£100m on selling
tickets, hospitality, beer, merch and tv rights vs the cost of
those things.
They then chose to spend £68m on professional rugby and £31m on
grassroots rugby (up from £57m and £20m respectively). Allowing
for various smaller items like tax, that added up to a small
reduction in reserves.
The point being that they made a choice to pump more money back
into the game at a point in the cycle where they would normally
be building up reserves.
Next year, with no AIs, they are very likely to also be dipping
into reserves. A lot then hinges on how much they can make from
hosting RWC 2025, and whether/how fast the cycle returns to a
more normal pattern.
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