The existence of professional rugby in Ireland could come “under significant threat” next year if current financial forecasts materialise, the head of Irish rugby has warned.
Irish Rugby Football Union (IRFU) chief executive Philip Browne has revealed net losses for 2020 are expected to exceed 30million euros (£27.38m) due to the impact of the coronavirus pandemic.
The continued absence of spectators and subsequent loss of match-day revenue remains the key issue for the IRFU.
Browne said the governing body’s current financial position is not sustainable and will require ‘significant additional actions’ after December if there is no sight of supporters returning at that point.
He reported the union could go from a cash surplus of around 28million euros in June 2020 to borrowings of just over 10 million euros 12 months later.
“The adjective ‘unprecedented’ has been overused over the past six months but our experience to date and history will show that, if anything, the description of the 2019-20 season as being unprecedented is significantly understated,” Browne told the Irish parliament’s Covid-19 Committee.
“If these projections were to materialise, the very existence of professional rugby on the island would be under significant threat in 2021.
“Until we can admit spectators in meaningful numbers into our stadia, and return to some level approaching self-sustainability, the whole rugby infrastructure built over the last 150 years is under threat.
“We will, of course, continue to follow guidelines in relation to this, but that support comes at a significant cost to our sport.”
It is anticipated the IRFU will continue to ‘burn’ at least 5 million euros a month, primarily on wages and costs, if the situation does not improve.
The dire financial forecasts come despite a series of cost-cutting measures, including salary reductions of up to 20 per cent and redundancies.
Predicted net losses of more than 30million euros in 2020 exclude 10-year ticket renewal fees due to the IRFU, which amount to in excess of 32million euros.
The union has been unable to invoice for those sums without supporters attending games.
Ireland’s Guinness Six Nations clash with Italy, scheduled for March 7, was among the first mass gatherings to be cancelled.
Test rugby will return to the country next month when the rearranged fixture will be played behind closed doors in Dublin, before Andy Farrell’s side finish the postponed tournament against France in Paris.
Ireland are then scheduled to compete in a new eight-team Autumn Nations Cup.
Professional rugby returned to the nation last month when Ulster, Munster, Leinster and Connacht resumed the shortened 2019-20 Guinness PRO14 campaign with a series of behind-closed-doors Inter-Provincial games.
Leinster defeated Ulster 27-5 in the final of the competition last weekend.