English rugby is preparing for up to £145m in lost revenues as it counts the cost of cancelled events and matches behind closed doors at Twickenham.
In its 2020 annual report, the Rugby Football Union (RFU) said revenues for 2019-20 were down 22 per cent year-on-year at £167m. However, worse could be yet to come in 2020-21 with chief executive Bill Sweeney stating that the loss of crowds at 2020 autumn internationals will mean a £120m reduction in revenue and loss of £45m, while no fans for the 2021 Guinness Six Nations would mean an anticipated £140m reduction in revenue with a loss of around £60m.
“With no rugby and no events, we are looking at a potential short-term impact in the region of £145m in lost revenues in our ‘mid-case’ scenario,” Sweeney said.
“We also know that there will be a much longer-term effect and are projecting a four- to five-year recovery, with cumulative revenue reductions of around 20%.”
Looking at the year to June 30, 2020, the loss of all activity in the last quarter meant that England Rugby finished the year with revenues £23m behind budget, mostly driven by lost broadcast, ticketing, hospitality and conferences and events revenues.
Ticket revenues decreased 46 per cent year-on-year to £25.5m during 2019-20, as a result of there being no Quilter Autumn Internationals, due to the men’s Rugby World Cup, and only two home Guinness Six Nations matches. Hospitality and catering income decreased by 41 per cent to £32.2m for the same reason.
Event hire fees reduced by £1.8m to £1.2m due to a reduction in the number of events held in the year as a result of Covid-19.
Profit before rugby investment decreased 27 per cent year-on-year to £83.9m. The operating loss for the year was slightly better than budget – £10.8m compared to a budgeted loss of £11.5m.
The organisation’s balance sheet was assisted by cost-cutting measures taken during 2018-19, with overhead expenses – including all administration and non-match day stadium costs – reduced by nine per cent year-on-year to £56.6m.
England Rugby also received £2m of income from the Coronavirus Job Retention Scheme (CJRS), a £0.75m rates holiday with respect to Twickenham Stadium, and was able to defer £2.1m of PAYE for the months April to June. Some 60 per cent of the organisation was furloughed on April 6, with short and some longer term pay reductions also actioned.
England Rugby expects to benefit from a further £1.5-2.0m CJRS income in the 2020/21 financial year, as well as a further £2.25m rates holiday.
Chief executive Sweeney said the sport as a whole in England would be impacted by the loss of revenue at Twickenham. The RFU has requested that the Government makes available a package of support for recovery funding to protect the integrity of the community game.
“The long-term financial challenges of coronavirus are significant for the entire economy,” Sweeney said. “The RFU relies on revenue from matches and events at Twickenham Stadium and re-invests this back into the game.
“The executive team has made provisions for the long-term effects of Covid, modelling every possible scenario over two years, to protect our position as a National Governing Body and a funder of the game of rugby.”
Image: Maxwell Hamilton / Attribution 2.0 Generic (CC BY 2.0)/Edited for size