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'No crowds will present severe challenges' - WRU issue financial warning in annual report

Wales line up for the national anthems at Principality Stadium. (Photo by Harry Trump/Getty Images)

The Welsh Rugby Union has detailed the financial impact of the COVID-19 pandemic and issued a warning for the year ahead as games continue behind closed doors. The WRU Group’s Annual Report for the the year ending 30 June 2020 describes how some 78% of income is derived from staging international matches and the commercial activities around those fixtures, leading to significant challenges in the current climate.

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Wales’ final fixture of the 2020 Six Nations, a home game against Scotland, was postponed due to the coronavirus pandemic.

The WRU, who turned over £79.9m during the year ending 30 June 2020, state that the postponement of that game alone amounted to £8.1million deficit. However, they also state that a quick response to the coronavirus crisis allowed them to reduce costs and somewhat cushion the blow.

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CEO and former Finance Director Steve Phillips described how the WRU managed the impact of Covid-19 down to a £5.3m deficit thanks to a number of measures, including pausing and alleviating non-essential capital, reducing staff salaries and utilising the Government Coronavirus Job Retention scheme.

A WRU statement read: “This, together with £4.9m of income, provided by the Group’s share of CVC Capital Partners’ investment in the PRO14 competition, helped to mitigate the pandemic’s effect.”

However, Phillips also issued a warning for the financial year ahead.

The WRU’s commercial income was up at £15.4m (2019: £14.2m) and income from participation in the Rugby World Cup made a significant positive contribution, but the pandemic negatively affected competition income (down to £7.1m from £11.9m in 2019) as well as event income (down to £1.1m from £2.4m in 2019) and hospitality and catering income (down to £9.3m, 2019: £14.0m) at Principality Stadium.

CEO Steve Phillips said: “We had expected to show a break even result for the current year and were on track to achieve this up until the business and economic disruption that was caused by the pandemic.

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“Its impact on the Group has meant an unanticipated loss, but we expect to be able to retain profits over the medium term to be able to offset this loss and return net assets to previous levels.

“The Group has a healthy business, with a strong balance sheet and adequate liquidity. Immediate measures were taken to reduce costs and protect our financial position.

“However, it is too early to quantify the full impact of the Covid–19 pandemic on future financial performance and the Group will continue to closely monitor the developing situation.”

Phillips warned that the current financial year is where the full impact of the coronavirus pandemic could be felt.

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“We are delighted that international rugby will return this autumn but the prospect of playing without spectators has an obvious and directly negative influence on our ability to generate revenue,” added Phillips.

“We have contingencies plans in place, for example for the prospect of home matches in the 2021 Guinness Six Nations having to be played in front of part capacity crowds, due to social distancing but no crowds will present severe challenges.

“We have sufficiently robust banking facilities but there is no doubt that YE21 is when the full impact of this pandemic could be felt.

“We can be proud of what we have achieved so far and, under present circumstances, only making a £5.3m loss in YE20 can be viewed in a positive light, but there is also much hard work ahead, just as there is for all in the sports, leisure and entertainment industries as we continue to navigate through the uncertainties arising from the current pandemic.”

The full WRU report can be viewed here.

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AllyOz 1 day ago
Does the next Wallabies coach have to be an Australian?

I will preface this comment by saying that I hope Joe Schmidt continues for as long as he can as I think he has done a tremendous job to date. He has, in some ways, made the job a little harder for himself by initially relying on domestic based players and never really going over the top with OS based players even when he relaxed his policy a little more. I really enjoy how the team are playing at the moment.


I think Les Kiss, because (1) he has a bit more international experience, (2) has previously coached with Schmidt and in the same setup as Schmidt, might provide the smoothest transition, though I am not sure that this necessarily needs to be the case.


I would say one thing though about OS versus local coaches. I have a preference for local coaches but not for the reason that people might suppose (certainly not for the reason OJohn will have opined - I haven't read all the way down but I think I can guess it).


Australia has produced coaches of international standing who have won World Cups and major trophies. Bob Dwyer, Rod Macqueen, Alan Jones, Michael Cheika and Eddie Jones. I would add John Connolly - though he never got the international success he was highly successful with Queensland against quality NZ opposition and I think you could argue, never really got the run at international level that others did (OJohn might agree with that bit). Some of those are controversial but they all achieved high level results. You can add to that a number of assistants who worked OS at a high level.


But what the lack of a clear Australian coach suggests to me is that we are no longer producing coaches of international quality through our systems. We have had some overseas based coaches in our system like Thorn and Wessels and Cron (though I would suggest Thorn was a unique case who played for Australia in one code and NZ in the other and saw himself as a both a NZer and a Queenslander having arrived here at around age 12). Cron was developed in the Australian system anyway, so I don't have a problem with where he was born.


But my point is that we used to have systems in Australia that produced world class coaches. The systems developed by Dick Marks, which adopted and adapted some of the best coaching training approaches at the time from around the world (Wales particularly) but focussed on training Australian coaches with the best available methods, in my mind (as someone who grew up and began coaching late in that era) was a key part of what produced the highly skilled players that we produced at the time and also that produced those world class coaches. I think it was slipping already by the time I did my Level II certificate in 2002 and I think Eddie Jones influence and the priorities of the executive, particularly John O'Neill, might have been the beginning of the end. But if we have good coaching development programmes at school and junior level that will feed through to representative level then we will have


I think this is the missing ingredient that both ourselves and, ironically, Wales (who gave us the bones of our coaching system that became world leading), is a poor coaching development system. Fix that and you start getting players developing basic skills better and earlier in their careers and this feeds through all the way through the system and it also means that, when coaching positions at all levels come up, there are people of quality to fill them, who feed through the system all the way to the top. We could be exporting more coaches to Japan and England and France and the UK and the USA, as we have done a bit in the past.


A lack of a third tier between SR and Club rugby might block this a little - but I am not sure that this alone is the reason - it does give people some opportunity though to be noticed and play a key role in developing that next generation of players coming through. And we have never been able to make the cost sustainable.


I don't think it matters that we have an OS coach as our head coach at the moment but I think it does tell us something about overall rugby ecosystem that, when a coaching appointment comes up, we don't have 3 or 4 high quality options ready to take over. The failure of our coaching development pathway is a key missing ingredient for me and one of the reasons our systems are failing.

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