Irish provinces and their player costs

Gerry Thornley, 29 April 2014 “That there is likely to be more money for players is overdue and the Irish provinces have a proven culture, sense of identity and loyalty, as well as competitiveness, which their fellow Celts would covet. They’ve defied the odds before.”

On 3 March 2014, Andy Howell, rugby correspondent of the Western Mail, supposedly Wales’ No.1 rugby journalist, claimed that the Leinster Rugby team had a budget of £4.1m, including its academy players. In the quote above, the archetypal Irish rugby journalist, Gerry Thornley, implies that Irish players stay with their provinces due to loyalty, not money. That would be true if Howell’s budget was correct.

But is Howell correct? What did he do to verify the figure given to him, presumably by Leinster.

The first thing is to layout the structure of Irish Rugby at professional level. It is entirely controlled by the Union. The IRFU own the professional teams. Munster, Ulster, Leinster & Connacht Rugby are all entities it seems who are owned 100% by the IRFU. It is those entities that operate the relevant provincial sides. There are limited companies set up that protect those names, but they are dormant. Those businesses appear to be ‘branches’ of the IRFU.

Reason for arriving at those conclusions? The IRFU accounts. These account for the competition monies for those sides, but unlike the WRU, the outgoings do not go to the four teams, but appear to be spent on players wages (of which more later).

Alongside the rugby sides there, provinces also have Branches that are owned, it seems, by their constituent clubs. The accounts of the branches are not made publically available, but are commented on in the press following AGM report. I have also had a copy of the Leinster Branch Accounts sent to me, which help enormously to understand how professional rugby in Ireland works, and crucially how much money they spend on player wages.

In terms of income, the IRFU appear to account for all the competition monies the 4 provinces get. This totals approximately €11m. The other income of the IRFU appears to derive out of the international game only. Then in schedule 3 to the accounts we are told that player and management costs come to €28.5m. This excludes academy players and coaching support staff (such as U20 coach Mike Ruddock) as they appear to be included in the costs laid out in schedule 4.

So the wage bill for pro players in Ireland is €28.5m, less say €1m for the senior side coaching team.

At the moment in Wales, RRW are asking for £10m between the 4 sides. The four Irish provinces, in 2013 (with similar figures for previous years) received approximately €16.5m over and above competition income. This does give the IRFU MORE control than RRW appear to be happy with, but it does indicate the funding difference.

The remainder of the income for the branch accounts that I have seen for Leinster, states that all other income such as provincial income and ticket monies go through the branch accounts. The Leinster turnover, even without competition monies remember, is over €12m. This is in excess of the top welsh pro team, where competition monies are included.

So if the IRFU pay the players, where does this money go? Well, it seems that the Leinster branch also pay the players (senior ones) to the tune of €2.7m. The coaching staff expense is elsewhere in the accounts.

So, if we stay with Leinster at the moment, if we say the split of the €27.5m between the four provinces is that Connacht get half the other 3. That means that Leinster get the wages of 2/7ths of €27.5m. This is approximately €7.85m. Add in the €2.7m, and you get €10.55m. Or £8.75m. Or more than double the RRW salary cap, and significantly more than the PRL clubs.

I even think it is above the French salary cap.

#foodforthought’ndy

Conclusions:

1- The Irish provincial sides are not overperforming. They are performing on par with their funding. Maybe even below it.

2- Where the Irish are performing is income generation. The Munster branch turnover is apparently more like €17m.

3- RRW demands for £10m do not seem unreasonable.

4- RRW need to improve their income streams. The WRU should be helping them with this, not hindering them. Part of this would be to empower regions to build relationships with clubs. In Ireland, the branches award significant grants as well as the Union.

5- To make it clear, the Lenister playing wage bill is obviously not £4.1m, Andy. According to official audited accounts.

Gerry Thornley, 29 April 2014 “That there is likely to be more money for players is overdue and the Irish provinces have a proven culture, sense of identity and loyalty, as well as competitiveness, which their fellow Celts would covet. They’ve defied the odds before.”

On 3 March 2014, Andy Howell, rugby correspondent of the Western Mail, supposedly Wales’ No.1 rugby journalist, claimed that the Leinster Rugby team had a budget of £4.1m, including its academy players. In the quote above, the archetypal Irish rugby journalist, Gerry Thornley, implies that Irish players stay with their provinces due to loyalty, not money. That would be true if Howell’s budget was correct.

But is Howell correct? What did he do to verify the figure given to him, presumably by Leinster.

The first thing is to layout the structure of Irish Rugby at professional level. It is entirely controlled by the Union. The IRFU own the professional teams. Munster, Ulster, Leinster & Connacht Rugby are all entities it seems who are owned 100% by the IRFU. It is those entities that operate the relevant provincial sides. There are limited companies set up that protect those names, but they are dormant. Those businesses appear to be ‘branches’ of the IRFU.

Reason for arriving at those conclusions? The IRFU accounts. These account for the competition monies for those sides, but unlike the WRU, the outgoings do not go to the four teams, but appear to be spent on players wages (of which more later).

Alongside the rugby sides there, provinces also have Branches that are owned, it seems, by their constituent clubs. The accounts of the branches are not made publically available, but are commented on in the press following AGM report. I have also had a copy of the Leinster Branch Accounts sent to me, which help enormously to understand how professional rugby in Ireland works, and crucially how much money they spend on player wages.

In terms of income, the IRFU appear to account for all the competition monies the 4 provinces get. This totals approximately €11m. The other income of the IRFU appears to derive out of the international game only. Then in schedule 3 to the accounts we are told that player and management costs come to €28.5m. This excludes academy players and coaching support staff (such as U20 coach Mike Ruddock) as they appear to be included in the costs laid out in schedule 4.

So the wage bill for pro players in Ireland is €28.5m, less say €1m for the senior side coaching team.

At the moment in Wales, RRW are asking for £10m between the 4 sides. The four Irish provinces, in 2013 (with similar figures for previous years) received approximately €16.5m over and above competition income. This does give the IRFU MORE control than RRW appear to be happy with, but it does indicate the funding difference.

The remainder of the income for the branch accounts that I have seen for Leinster, states that all other income such as provincial income and ticket monies go through the branch accounts. The Leinster turnover, even without competition monies remember, is over €12m. This is in excess of the top welsh pro team, where competition monies are included.

So if the IRFU pay the players, where does this money go? Well, it seems that the Leinster branch also pay the players (senior ones) to the tune of €2.7m. The coaching staff expense is elsewhere in the accounts.

So, if we stay with Leinster at the moment, if we say the split of the €27.5m between the four provinces is that Connacht get half the other 3. That means that Leinster get the wages of 2/7ths of €27.5m. This is approximately €7.85m. Add in the €2.7m, and you get €10.55m. Or £8.75m. Or more than double the RRW salary cap, and significantly more than the PRL clubs.

I even think it is above the French salary cap.

#foodforthought’ndy

Conclusions:

1- The Irish provincial sides are not overperforming. They are performing on par with their funding. Maybe even below it.

2- Where the Irish are performing is income generation. The Munster branch turnover is apparently more like €17m.

3- RRW demands for £10m do not seem unreasonable.

4- RRW need to improve their income streams. The WRU should be helping them with this, not hindering them. Part of this would be to empower regions to build relationships with clubs. In Ireland, the branches award significant grants as well as the Union.

5- To make it clear, the Lenister playing wage bill is obviously not £4.1m, Andy. According to official audited accounts.

Chunky Norwich wrote:
http://gwladrugby.com/?p=1493

Jenifer McLadyboy wrote:BTW. 4.1 Mil on players is credible when you factor in Central contracts.

Jamie Heaslip........2017
Gordon D'Arcy........2014
Bod........2014
Mike Ross........2015
Rob Kearney........2015
Cian Healy........2016
Sean O'Brien.......2016

That's a fair bit of Wonga right there

Jenifer McLadyboy wrote:What I was saying was that those players don't come out of Leinster's budget, so 4.1 Mil would probably cover the rest of the squad and academy handy enough.

profitius wrote:I'm sure the money Leinster gets does not just pay for the players. That has to go to support the game all around Leinster and that possibly includes things like womens rugby etc. They also have to rent out the RDS.

LondonTiger wrote:

Jenifer McLadyboy wrote:What I was saying was that those players don't come out of Leinster's budget, so 4.1 Mil would probably cover the rest of the squad and academy handy enough.

Indeed we are not disagreeing.

the point is the Western Mail journalist who suggests you can run a team like Leinster on a 4.1m wage bill is perhaps in error.

Jenifer McLadyboy wrote:

LondonTiger wrote:

Jenifer McLadyboy wrote:What I was saying was that those players don't come out of Leinster's budget, so 4.1 Mil would probably cover the rest of the squad and academy handy enough.

Indeed we are not disagreeing.

the point is the Western Mail journalist who suggests you can run a team like Leinster on a 4.1m wage bill is perhaps in error.

Fo sho!
The 6 I listed wouldn't be a kick in the boll1x away from half that on their own

LondonTiger wrote:

Jenifer McLadyboy wrote:

LondonTiger wrote:

Jenifer McLadyboy wrote:What I was saying was that those players don't come out of Leinster's budget, so 4.1 Mil would probably cover the rest of the squad and academy handy enough.

Indeed we are not disagreeing.

the point is the Western Mail journalist who suggests you can run a team like Leinster on a 4.1m wage bill is perhaps in error.

Fo sho!
The 6 I listed wouldn't be a kick in the boll1x away from half that on their own

You named 7

Mickado wrote:It's an interesting piece of digging, there are no references listed in the article so I'll reserve judgement on his accuracy, but the conclusions drawn are a bit fallacious.

Mickado wrote:It's an interesting piece of digging, there are no references listed in the article so I'll reserve judgement on his accuracy, but the conclusions drawn are a bit fallacious.

LondonTiger wrote:Having looked through the IRFU accounts   http://www.irishrugby.ie/downloads/IRFU_ANNUAL_REPORT_20122013.pdf   I must point one thing out - the 27.5m euros as player wages mentioned is not just handed to the Provinces to pay as wages. A large chunk will be payments to international players for playing for Ireland - and as such is not counted as part of salary Caps in England or France.

Are leinsters players paid more than 4.1m Euro for representing Leinster - it certainly looks like that. however it will be some way below the 10.55m Euro the author comes up with.

Sin é wrote:

LondonTiger wrote:Having looked through the IRFU accounts   http://www.irishrugby.ie/downloads/IRFU_ANNUAL_REPORT_20122013.pdf   I must point one thing out - the 27.5m euros as player wages mentioned is not just handed to the Provinces to pay as wages. A large chunk will be payments to international players for playing for Ireland - and as such is not counted as part of salary Caps in England or France.

Are leinsters players paid more than 4.1m Euro for representing Leinster - it certainly looks like that. however it will be some way below the 10.55m Euro the author comes up with.

Spot on. He is also incorrect in his assertion that Munster Rugby's turnover is 17m - it was 14.5m last year (bear in mind that Munster Rugby has two training bases and 2 stadia for starters and have just redeveloped one, all of which would put a hole in anyone's finances.

I think he has also excluded the Provincial coaching, S&T & admin costs in the Provinces (i.e., x 4 lots) who are also employees of the IRFU in the professional game. Last season, Munster's Scrum Coach was let go because of cut-backs. Bear in mind that the Provinces don't spare the cash on their coaching staff either - i.e., Connacht have a former Super Rugby coach at the helm.

Also, Connacht are probably getting more than the other provinces now. Their problem is that they don't have the support base that the others have to supplement their income.

Portnoy's Complaint wrote:

Sin é wrote:

LondonTiger wrote:Having looked through the IRFU accounts   http://www.irishrugby.ie/downloads/IRFU_ANNUAL_REPORT_20122013.pdf   I must point one thing out - the 27.5m euros as player wages mentioned is not just handed to the Provinces to pay as wages. A large chunk will be payments to international players for playing for Ireland - and as such is not counted as part of salary Caps in England or France.

Are leinsters players paid more than 4.1m Euro for representing Leinster - it certainly looks like that. however it will be some way below the 10.55m Euro the author comes up with.

Spot on. He is also incorrect in his assertion that Munster Rugby's turnover is 17m - it was 14.5m last year (bear in mind that Munster Rugby has two training bases and 2 stadia for starters and have just redeveloped one, all of which would put a hole in anyone's finances.

I think he has also excluded the Provincial coaching, S&T & admin costs in the Provinces (i.e., x 4 lots) who are also employees of the IRFU in the professional game. Last season, Munster's Scrum Coach was let go because of cut-backs. Bear in mind that the Provinces don't spare the cash on their coaching staff either - i.e., Connacht have a former Super Rugby coach at the helm.

Also, Connacht are probably getting more than the other provinces now. Their problem is that they don't have the support base that the others have to supplement their income.

Careful now. You might be justifying unfavourably balanced set-ups elsewhere.

p.s. Why do the Irish prefer ASM over Toulon?

A question I've often put, but never had a reply.

quinsforever wrote:Will be interesting to see what impact the big new french tv deal AND new LNR rules on JIfF players will have on poaching of irish and welsh players.

The new 12 man average JIFF rule for french teams should mean less foreign players in their league but better paid on average. And players who have retired from intl rugby or made themselves unavailable will continue to be attractive, just like for the AP.

I suspect it means that only the very best will be lured to France, a la Sexton, and they will be paid very well, and paid even better if they don't have international commitments that reduce their top14 game time.

LeinsterFan4life wrote:

quinsforever wrote:Will be interesting to see what impact the big new french tv deal AND new LNR rules on JIfF players will have on poaching of irish and welsh players.

The new 12 man average JIFF rule for french teams should mean less foreign players in their league but better paid on average. And players who have retired from intl rugby or made themselves unavailable will continue to be attractive, just like for the AP.

I suspect it means that only the very best will be lured to France, a la Sexton, and they will be paid very well, and paid even better if they don't have international commitments that reduce their top14 game time.

I imagine teams will just ignore the JIFF rules. Neither the salary cap or the JIFF rules seem to affect Toulon at all.

Hound of Harrow wrote:

LeinsterFan4life wrote:

quinsforever wrote:Will be interesting to see what impact the big new french tv deal AND new LNR rules on JIfF players will have on poaching of irish and welsh players.

The new 12 man average JIFF rule for french teams should mean less foreign players in their league but better paid on average. And players who have retired from intl rugby or made themselves unavailable will continue to be attractive, just like for the AP.

I suspect it means that only the very best will be lured to France, a la Sexton, and they will be paid very well, and paid even better if they don't have international commitments that reduce their top14 game time.

I imagine teams will just ignore the JIFF rules. Neither the salary cap or the JIFF rules seem to affect Toulon at all.

+1 as far as Toulon are concerned.

There is a lot to be admired in the IRFU way of doing things. Trying to maximise your player resources at club and international level.

It has helped produce a strength in depth in a wider squad sense than they have ever had before. A couple of positions excepted, but even NZ have that issue.

Things are a bit more difficult in a country where clubs carry more clout.

quinsforever wrote:To be fair hound, the regional setup was always more likely to garner support in a country easily divided into regions (along GAA or other lines so I am led to believe?)

Hound of Harrow wrote:quins - I have lots of Irish pals and I can say that sport there is very much 'village v village' 'town v town' and 'County v County'.

Notch wrote:

quinsforever wrote:To be fair hound, the regional setup was always more likely to garner support in a country easily divided into regions (along GAA or other lines so I am led to believe?)

Hound of Harrow wrote:quins - I have lots of Irish pals and I can say that sport there is very much 'village v village' 'town v town' and 'County v County'.

Gentlemen, the reason the provinces work so well for Ireland is the way club rugby was organised in Ireland. Ireland had no All-Ireland club rugby competition until the 90s- the leagues were organised by the four branches. So the very best players in the Ulster league would be selected to play for the Ulster provincial side etc. With no direct competition between sides from each province other than the inter-provincial games, the fixtures between the four provinces basically became the basis for international selection. The old inter-provincial Championship was held before the Five Nations and they were basically Ireland trials. As well as that the provincial sides would normally be selected to play touring international teams and those were the games they'd play every season- they didn't have many fixtures but the ones they had were basically the most prestigious, competitive games in Irish Rugby outside international test matches.

Anyway getting selected for your province was a massive honour and the gateway to international representation, so when the provinces were basically repurposed into professional club sides they already had a lot of prestige and history attached to them. The supporter base was initially small but took off rapidly as there was no bitterness over some clubs being favoured over others to push people away and you already had the history of Munster beating the All Blacks, Ulster beating Australia which were massive moments in history of Irish Rugby.

LondonTiger wrote:

Jenifer McLadyboy wrote:What I was saying was that those players don't come out of Leinster's budget, so 4.1 Mil would probably cover the rest of the squad and academy handy enough.

Indeed we are not disagreeing.

the point is the Western Mail journalist who suggests you can run a team like Leinster on a 4.1m wage bill is perhaps in error.

Portnoy's Complaint wrote:
From the sub-basement up, it remains theoretically possible for any team to compete in the Jeff.
Not if the PRL were given full sway in carving up the game between themselves as an effective cartel.

But theoretically, technically possible.

And still yet there's hope!

Portnoy's Complaint wrote: monopsonies.

wiki wrote:In economic theory, imperfect competition is a type of market structure showing some but not all features of competitive markets.[1]

Forms of imperfect competition include:

Oligopoly, in which there are few sellers of a product.
Monopolistic competition, in which there are many sellers producing highly differentiated products.
Monopsony, where there are many sellers but only one buyer, and oligopsony, where there are many sellers but few buyers.