RFU Annual Report 2021-22
The Rugby Football Union (RFU) Annual Report for 2021-22 has been published.
The report shows significantly higher reported revenues for the year at £189.1m (£97m in prior year). An operating profit of £15m (loss of £7.9m in prior year) and profit to reserves £95.0m (£20.5 in prior year).
The profit to reserves for the year ending 30 June 2022 is significantly impacted by to the sale in the current year of a 14.3% stake in the future broadcast rights of the Six Nations to CVC, which will see the RFU receive £90.8m in net proceeds from the transaction in five tranches over four years. Other one-off items include the half year impact of a debenture donation campaign to the Rugby Football Foundation and business rates relief. When adjusting for these unusual items, the underlying profit for the year is £1.5m.
While revenues are higher than the prior year, that is because capacities in the prior year were either zero or just a few thousand, leading to very low ticket and hospitality revenues. Revenues remain lower than pre-pandemic forecasts and, across the four-year cycle from July 2020 to June 2024, overall revenues are expected to be circa £150m (19%) lower than forecasted before the pandemic.
The Covid impact on revenues in the last year is around £15m compared with £130m in the 2020-21 financial year. £15m is a significant ongoing impact and means £15m less to invest into the game at a time of high cost inflation.
The start of a recession combined with the highest inflation rates in 40 years will inevitably result in operational costs rising significantly; particularly in areas such as insurance, utilities and event staffing (for example utilities have gone up by 100% per annum, even with strong usage management and government support). The RFU is therefore anticipating less underlying profit next year and significantly less the year after.
As a result of the monies received from CVC for selling a share of future broadcast revenues, revenues from broadcast rights and some sponsorship will be reduced in the short term. The RFU objective and commitment is to use these proceeds to invest in revenue generating projects to support the growth of the game. Areas targeted for this investment include stadium master-planning, digital transformation, the women’s game and development of revenue generating projects (including assets) for the community game. The investment in revenue-generating projects and assets in the community game is likely to be around £20m.
Because of reduced revenues over several years, the RFU will need to maintain tight control on costs and with so much of its cost base being fixed costs, rugby investment will remain impacted. However, this investment is coming off the back of a very high base and current forecasts show that it will still be a substantial investment in excess of £300m across this four-year cycle.
"The RFU is financially stable despite a very challenging economic environment," said RFU CEO, Bill Sweeney.
"We have a clearly defined strategy that guides the work and investments we undertake to promote and support rugby in England.
"I would like to thank all of our clubs and volunteers for their hard work and resilience during Covid as well as government for their generous support. There is no doubt the pandemic affected not only rugby but sport in general."
Chief Operating Officer and Chief Finance Officer, Sue Day, added: "Twickenham Stadium remains the main driver of RFU revenues, so the return to full capacity crowds meant a return to significantly higher revenues than the prior year. We are extremely thankful the rugby community turned out in their droves to cheer on our teams and help us generate much needed revenues to support our investment back into the game of rugby.
"While we celebrate the removal of restrictions and spectators returning to the stadium, it is also important to sound a note of caution for the future. Although revenues are much higher than last year, they remain lower than our pre-pandemic forecasts, this combined with significant cost inflation means it will be critical that we continue to keep a tight control on our cost base and spend money wisely, investing where it will make the greatest difference to our game."
