Outgoing Rugby Football Union chief executive Steve Brown has denied that that he is leaving a sinking ship following his sudden resignation after just 14 months in the job, but accepted that the £220m Professional Game Agreement that was signed with the Premiership clubs two years ago could come back to haunt the international game.
The RFU revealed on Monday afternoon that they made a loss of £30.9m over the 2017/18 season, although officials at Twickenham are refusing to panic as that figure is offset a restructuring of Twickenham Experience Limited, the stadium’s hospitality, conference and events provision, to Compass PLC for £31.6m.
In total, the RFU invested £107.7m pf its £172.4m revenue back into the sport, an increase of eight per cent, but there is no overlooking the fact that its annual income fell £12.5m due to hosting two tests fewer at Twickenham, resulting in an £8m ticket drop and £4.1m broadcast deficit.
However, despite investing more than ever before back into rugby, Brown admitted that he does not know how the agreement – which was reached between his predecessor Ian Ritchie and Premiership Rugby Limited in July 2016 – will impact the RFU, with chairman Andy Cosslett accepting that the deal “now appears costly against updated revenue forecasts” that “will restrict our discretionary investment capacity going forward”.
“I guess the first answer to it is who knows?” said Brown, who will leave his role at the end of the year and be replaced by the current director of professional rugby Nigel Melville, the former England international, on an interim basis.
“Did we pay too much or did we not pay too much for the PGA? We paid the right amount at the right time when we were in the middle of a growth scenario where when you looked at what was required in the professional game at that point in time and then if you reflect from two years into it, how bad has it been, what did we get for that money?
“We’ve just come out of a series where we’ve lost one game by one point to the world’s best team, we’ve had a win-rate at 80-plus per cent which was running at maybe 50-plus per cent before we went into that agreement. We’ve probably got the best relationship we’ve ever had with the clubs and PRL and we’re able to have very open and transparent discussions about the very changing environment they’re in now. There’s a lot of reasons why you might say it’s expensive – and there’s a lot of cost there. We don’t know whether it was too much or not, but we do know that we’ve had quite a lot of cumulative success already in the first two years of that agreement.”
Those fears appear to already be coming to fruition in the form of 54 redundancies that have been made in preparation of what is ahead for the world’s richest union, but Brown – who is walking away from a job that pays around £400,000-a-year – stressed the RFU’s future is safe as they predict a return to profit in 2018/19, along with a £25m cash reserve to cope with the loss of income that will come in the absence of any autumn internationals next year due to the Rugby World Cup.
“That £30.9m loss is actually mirrored by a £31m cash injection that happens to be reported in a different part of the accounts, so in reality you net the two off and you come to a break-even position. We move effectively from a break-even position into a profit in 2018/19,” Brown said.
“I’m leaving for my own reasons, and I don’t think the ship could be in better shape than it has been and how we’ve managed to pull it forward in the last seven-or eight years.
“I think for me personally it’s the right time to go, I need to do some things myself differently and some different things in my life, and for me it’s a decision I’ve made after an accumulation of fantastic and privileged experiences over seven-and-a-half years.
“I think the union is in a superb space, it has an excellent executive team, a strong board, good governance and a very supportive council with much more interaction and transparency than we’ve ever seen before that enables us to make the right decision about how we take this game forward. The world is always going to move around and change, that’s normal in every line of business sport or otherwise, we just happen to be in the very best shape we can be to adapt and move with that.”
Cosslett confirmed that the process to appoint Brown’s successor will begin formerly this week though there is not yet a planned timescale to complete that, with England head coach Eddie Jones set to answer to interim CEO Melville until the new chief is in position.
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