Munster Rugby achieved a financial breakeven last season for the first time in almost nine years, with its results showing how fragile the business model of Irish rugby really is, said the club’s chief executive, Ian Flanagan.
Speaking at the Cork Chamber Business Breakfast at the Metropole Hotel on Thursday morning, Mr Flanagan told attendees there was a disconnect between the size of the club’s brand and its operational scale.
“[Breaking even] was a big turnaround for us, we’ve grown our commercial revenues by around 20-25%,” Mr Flanagan said, adding that the club has cut costs by about 20% in the past five years.
“We’ve rebalanced the business model a lot, but when you’re breaking even, you don’t have transformational revenues to invest in infrastructure, facilities and staffing. You must find that money elsewhere if you don’t have it on your balance sheet.”
Despite its fragility, Munster Rugby continues to expand its operations and diversify its revenue streams, with its Cork stadium, Virgin Media Park in operation more than 300 days of the year.
In addition, the venue is also host to several concerts during the summer months, with nine music events taking place last summer. Significant capital investments by the club are also still being made.
Last month, the sod was turned on the club’s €7.3m Centre of Excellence, marking its second-largest-ever capital investment. The first of its kind in the region, the centre will include an indoor rugby dome for a training pitch and a large gym aiming to grow the game and increase participation.
The Cork centre will also see Munster’s head office relocate from temporary accommodation at the Sunday’s Well RFC end of Musgrave Park to permanent office space within the new building.
“The project shows and demonstrates Munster Rugby’s commitment to Cork,” said Mr Flanagan. “This part of the province is a hugely important asset to us.
“This is all about growing the game and helping our clubs and schools – it’s a levelling up exercise. In future years, hopefully, it will help us with our clear pathway and development of future professional players.”
Commenting on SuperValu Páirc Uí Chaoimh, Mr Flanagan praised the club for its two sell-out matches at the stadium in the past two years, one against South Africa in late 2022 and the other against the Crusaders in February this year, with each game bringing in 41,000 attendees.
Citing an Economic Impact Report of the Munster v Crusaders, Mr Flanagan said total direct expenditure generated by all attendees totalled €5.6m.
The report also found that total direct expenditure by visitors from outside Cork city and county was around €2.7m, with this figure relating to match attendance expenditure and not pre-match expenditure on tickets.
The number of accommodation bed nights generated for Cork city and county was 5,100, the report added, noting that the average overnight spectator spend per night was €233.
“Those types of games generate that level of additional spend in the region, and Cork could do with more of these events,” said Mr Flanagan.
“We would like to do more of them, but the simple fact for us is the numbers are not compelling enough and they are not easy games for us. A lot of work goes in internally, but they are very important for us.”