I’M HERE TODAY FOR THE FINAL TIME AS YOUR HONORARY TREASURER. YOU WILL RECALL THAT YOU VOTED TO TERMINATE THE POST OF TREASURER WHEN YOU DECIDED TO CHANGE THE SHAPE OF THE
THAT DECISION, PROPOSED BY MYSELF AND YOUR GENERAL COMMITTEE AS ONE OF A RANGE OF SWEEPING CHANGES AIMED AT MODERNISING OUR ADMINISTRATIVE STRUCTURE, MEANS THAT THE FINANCES OF THE UNION WILL BE SAFEGUARDED BY THE NEW BOARD OF DIRECTORS, ONE MEMBER OF WHICH WILL HAVE SPECIAL RESPONSIBILITY FOR FINANCE, AND THE NEW EXECUTIVE BOARD.
THE ROLE OF TREASURER HAS CHANGED BEYOND DESCRIPTION FROM THE DAY I TOOK OVER FROM KEN HARRIS IN THE EARLY EIGHTIES. SPONSORSHIP AND TV RIGHTS WERE JUST STARTING TO CREEP INTO THE FINANCIAL EQUATION, WE HAD A SMALL PROFESSIONAL COACHING STAFF AND A TOTALLY AMATEUR GAME. HOW TIMES HAVE CHANGED.
THESE DAYS TV RIGHTS AS WELL AS SPONSORSHIP AND HOSPITALITY REVENUES ARE VITAL INGREDIENTS OF OUR CORE BUSINESS AND CONTRIBUTE SUBSTANTIAL SUMS TO THE
THE MORTGAGE THAT THE LATE AND MUCH LAMENTED KEN HARRIS HAD TO CONCERN HIMSELF WITH ON THE OLD CARDIFF ARMS PARK, WAS MINISCULE COMPARED WITH THAT WHICH WE ARE CURRENTLY SERVICING ON THE MILLENNIUM STADIUM, YET WE ARE STILL WELL AHEAD OF THE REST OF THE FIELD IN TERMS OF FACILITIES THANKS TO YOUR BRAVE DECISION TO BACK THE STADIUM PROJECT.
FACILITIES PLAY A HUGE PART IN PROFESSIONAL SPORT. JUST LOOK AT THE FALLING FINANCIAL POSITION OF THE IRISH
WHY ARE THE FOOTBALL ASSOCIATION, WITH THE BACKING OF THE GOVERNMENT, PUTTING THEMSELVES AT EXTREME FINANCIAL RISK SPENDING IN EXCESS OF £800M ON BUILDING A NEW WEMBLEY AND WHY ARE SO MANY OF THE
I WONDER WHAT MY SEVEN PREDECESSORS AS HONORARY TREASURER WOULD HAVE MADE OF MODERN DAY
FIRST IN THE FINANCIAL HOT SEAT WAS RICHARD MULLOCK, WHO WAS ALSO THE FIRST SECRETARY OF THE WRU.
WILLIAM WILKINS AND TR GRIFFITHS FOLLOWED HIM BEFORE WE CAME TO “THE BARCLAY’S BANK ERA”, AS THE
SAM WEST, ERIC ROBERTS AND P O EVANS WERE NEXT BEFORE ANOTHER BARCLAY’S MAN, KEN HARRIS, WAS WAITING FOR HIS CALL.
HE HAD STARTED HIS BANKING LIFE IN THE SAME PONTYPRIDD BANK AS TR GRIFFITHS AND WENT ON TO SERVE THIS UNION AS TREASURER, PRESIDENT AND LIFE MEMBER UNTIL HIS DEATH EARLIER THIS YEAR.
IT WAS BACK IN THE EARLY EIGHTIES THAT KEN STOOD DOWN AS TREASURER AND I WAS VOTED TO REPLACE HIM. AS A MIDLAND BANK MANAGER I BROKE THE MOULD AND HAVE BEEN HONOURED TO SERVE YOU CLUBS FOR THE PAST 20 ODD YEARS.
BUT ENOUGH OF THE PAST, WHAT ABOUT THE PRESENT AND THE FUTURE OF THIS GREAT
AS I PREDICTED LAST YEAR, THE FINANCIAL CLIMATE IN WHICH WE OPERATE REMAINS DIFFICULT DESPITE THE LOWEST INTEREST RATES FOR MORE THAN A GENERATION. SPONSORSHIP OPPORTUNITIES REMAIN ELUSIVE AND AFFECTS THE OTHER HOME UNIONS ALSO.
It has been another tough year and Group turnover fell by £3.1 million TO £30.4 MILLION.
Some of this reduction had been predicted because Wales only played two Six Nations matches at the Millennium Stadium last season compared with four matches in the previous year, when the income from the delayed match against Ireland fell into those accounts.
Turning to the accounts of the Welsh
This loss was due to the fact only two Six Nations matches were staged in the Stadium during the year under review depriving us of approximately £3 million additional INCOME. ALSO, we had not anticipated that the new Six Nations contract would see our income share reduce by £1.6 million or that
In addition, the
You will recall that these investments which totalled £1.9m were contemplated at a time when
As part of that prudent review of the Group’s financial position, the Board also considered it appropriate to raise a general provision of £500,000 against loans to Clubs. Bearing in mind that UP TO £15 million has been LENT by the
Consequently, these two extraordinary items have HAD the effect of creatING an artificial DEFICIT of £3.7 million for the year.
I emphasise, that had we staged three Six Nations matches and not suffered the reduction I mentioned earlier from the Six Nations funding, then clearly we would have achieved at worst, a breakeven position prior to the TREATMENT of the extraordinary items.
Even so, our overall deficit after the adjustment of the extraordinary items, still compares favourably with other Home Unions. For example, the RFU are predicting losses in excess of £8m, FOR THE CURRENT YEAR whilst the published losses LAST YEAR for
As you can see, professional
Gate receipts from International matches remain a primary source of income and the Clubs have always played a proactive role in the sales of tickets and I am confident that you will always do your utmost to sell tickets. I recognise a winning team will assist that process and we are doing all we can to achieve that status.
Next month, the National Squad will play a number of Internationals in readiness for
I urge you to do all you can to ensure Wales play to capacity crowds at the Millennium Stadium FOR OUR MATCHES AGAINST
FROM the accounts of the Welsh Rugby Union, you can see that income last year totalled £19.5m a reduction of £3 million due, as I have explained, to fewer Six Nations matches during the season as well as a drop of nearly £500,000 in our sponsorship income.
TV remained the dominant source of revenue AT 55% WHILST the income from International matches accounted for 31% of the
The remaining components were sponsorship 7% and match sponsorship and hospitality sales 6% AND A VARIETY OF OTHER SOURCES MAKING UP THE FINAL 1%.
Excluding the extraordinary items described earlier, the
Distributions to Clubs remained the largest single element of the
A further 14% was spent on paying for National Squads and Junior
Administration accounted for 9% of the Company’s expenditure but I anticipate this percentage will fall once the cuts approved by the Board have been in effect for a full accounting year.
A further 8% was directed to our affiliated organisations and the vitally important Dragons
Despite the cost cutting measures introduced throughout the past year, the
* THE PREMIER AND 1ST DIVISION CLUBS RECEIVED PAYMENTS OF NEARLY £10 MILLION
* CLUBS FROM DIVISIONS 2-7 RECEIVED £2.1M
* THE COST OF REFEREES WAS REDUCED BY £76,000 TO £800,000
* PLAYER INSURANCE PAID ON YOUR BEHALF ACCOUNTED FOR £300,000
* OUR AFFILIATED BODIES, INCLUDING SCHOOLS AND YOUTH UNIONS, PICKED UP ALMOST £600,000
* WE SPENT A FURTHER £783,000 ON NURTURING THE GRASS ROOTS VIA THE DRAGONS TRUST
* AND FINALLY WE PAID A LOWER THAN USUAL AMOUNT OF INTEREST ON THE NEAR £5M WORTH OF LOANS THAT ARE STILL OUT THERE WITH MORE THAN 100 CLUBS.
WHATEVER THE PROPHETS OF DOOM MIGHT SAY ABOUT THE WRU, AND HOWEVER BAD THE HEADLINES MAY APPEAR, I THINK YOU WOULD HAVE TO AGREE THAT BY ONCE AGAIN SPENDING TWO-THIRDS OF THE WRU’S TURNOVER ON THE DEVELOPMENT OF OUR GAME WE HAVE PROVED WE HAVE A SOUND STRATEGY AND CARE DEEPLY ABOUT WELSH RUGBY FROM BOTTOM TO TOP.
TURNING TO THE BALANCE SHEET OF THE WELSH RUGBY UNION, YOU WILL NOTE THAT FIXED ASSETS COMPRISING LAND AND PROPERTIES HAVE REDUCED BY £1.9 MILLION TO £36 MILLION REFLECTING THE BOARD’S DECISION TO WRITE DOWN THE VALUE OF INVESTMENTS IN FOUR OF OUR PREMIER DIVISION CLUBS TO A NOMINAL VALUE.
CURRENT DEBTORS AT £9 MILLION REFLECT A MODEST INCREASE DUE TO THE FACT THE
CURRENT CREDITORS STANDS AT £8 MILLION; BANK OVERDRAFT STANDS AT £6 MILLION; BANK LOAN STANDS AT £0.5 MILLION; AND END OF YEAR RESERVES HAVE FALLEN TO £2.8 MILLION.
THIS TIME LAST YEAR I CALLED FOR A STRATEGY FOR CUTTING COSTS BY £ 3M AND INCREASING REVENUE. IT WAS A MESSAGE THAT THE BOARD OF DIRECTORS, WORKING CLOSELY WITH OUR NEW GROUP CHIEF EXECUTIVE DAVID MOFFETT AND HIS MANAGEMENT TEAM, TOOK ON BOARD.
WE PUT IN PLACE MEASURES TO CUT COSTS, SOME OF WHICH IMPACTED ON THIS YEAR’S ACCOUNTS BUT MOST OF WHICH WILL DELIVER LONGER TERM BENEFITS. WE ARE ACTIVELY SEEKING NEW INCOME VIA DEBENTURE SALES, NEW SPONSORSHIPS AND INCREASED TICKET SALES AS WELL AS PURSUING NEW EVENTS FOR THE MILLENNIUM STADIUM.
NOW If we examine the accounts of Millennium Stadium, you will see that on a turnover of nearly £10.5 million, we achieved a net profit of £2,440,000 before a depreciation charge of just over £2 million.
I AM DELIGHTED TO REPORT THAT FINALLY WE HAVE ACHIEVED A RATE REBATE FROM THE LOCAL AUTHORITIES IN
IN TOTAL, WE HAVE RECEIVED A REBATE OF £1.1M, AROUND £800,000 OF WHICH REBATES TO PRIOR YEARS. THIS IS THE DIRECT RESULT OF MUCH HARD WORK AND LOBBYING BY US OVER A LONG PERIOD OF TIME. IF ONLY THE MILLENNIUM COMMISSION AND THE WELSH ASSEMBLY GOVERNMENT WOULD VIEW OUR CASE FOR FURTHER FUNDING IN A SIMILAR VEIN.
LET’S FACE IT, WITHOUT WELSH
After making an adjustment to reflect thIS rebate, the overall net profit for the year settled at just over £1.1 million.
Turning to the balance sheet of the Stadium Company, the Stadium cost as at the accounting year end is recorded at £123,600,000 towards which we received a grant of £46 million from the Millennium Commission – a net cost of £77,600,000.
Against this asset, there are outstanding loans to Barclays Bank and BT of £49.1 million and £9.1 million respectively where we are close to concluding agreements to re-schedule both loans on a LONGER term basis.
THIS IS ALSO AN
WE BENEFIT FROM THE CLOSE RELATIONSHIP WHICH WE HAVE WITH BOTH OF THESE MAJOR COMPANIES. WE HAVE A REGULAR AND CONTINUING DIALOGUE WITH THEM – INDEED DAVID MOFFETT AND I MET THEM AS RECENTLY AS 30TH JUNE AND 4TH JULY.
DAVID AND I ARE CONFIDENT WE ARE CLOSE TO REACHING AGREEMENTS BOTH WITH BARCLAYS AND B.T. TO RESTRUCTURE THE DEBT DUE TO EACH OF THEM.
ONCE WE REACH AN AGREEMENT THEN, SO FAR AS B.T. IS CONCERNED, IT WILL RESOLVE ONCE AND FOR ALL ANY ISSUES AS TO LEGAL OWNERSHIP WHICH HAVE BEEN RAISED BY SOME OF YOU IN THE PAST.
WE ARE LOOKING AT OPPORTUNITIES TO SIGNIFICANTLY REDUCE THESE LOANS VIA THE DISPOSAL OF FIXED ASSETS SUCH AS THE
WE MUST ALSO REMEMBER THAT BECAUSE OF OUR FORESIGHT, RWC 2007 WILL GENERATE UP TO £8 MILLION BECAUSE OF THE AGREEMENTS BROKERED WITH THE OTHER UNIONS WHEN WE HOSTED RWC 1999.
TO BUILD THE SAME STADIUM TODAY WOULD PROBABLY COST IN THE REGION OF £ 400M – SOMETHING WE COULD NOT EVEN BEGIN TO CONTEMPLATE TODAY.
AND ANY TALK OF SELLING THE JEWEL IN OUR CROWN IS NONSENSE, PURE NONSENSE. WHAT WE ARE LOOKING FOR IS A BIT OF FAIR PLAY.
WHEN YOU SEE THE £9M HOLE IN THE FINANCES OF THE MILLENNIUM CENTRE IN CARDIFF BAY DEPSITE RECEIVING IN EXCESS OF £80 MILLION IN GRANT SUPPORT FROM THE MILLENNIUM COMMISSION AND THE WELSH ASSEMBLEY GOVERNMENT, THEN YOU ARE BOUND TO WONDER WHY THE NATION’S NATIONAL SPORT DOES NOT ENJOY SIMILAR FINANCIAL SUPPORT BEARING IN MIND THE ECONOMIC BENEFITS IT BRINGS TO THE PRINCIPALITY.
AND WON’T IT BE GREAT TO HAVE THE RYDER CUP IN WALES IN 2010 OF COURSE IT WILL, THANKS TO GRANT AID TO BE IN THE REGION OF £ 26M, BUT DON’T IMAGINE FOR ONE MOMENT THE ECONOMIC OR PUBLICITY IMPACT WILL BE THE EQUIVALENT TO THE MILLENNIUM STADIUM HOSTING THE FA CUP FINAL OR WALES PLAYING THREE HOME GAMES IN THE SIX NATIONS CHAMPIONSHIP.
AND NOW WE HEAR OF EFFORTS TO LURE THE OPEN GOLF CHAMPIONSHIP TO ROYAL PORTHCAWL AND ATTRACT A STAGE OF THE TOUR DE
THE WRU PUTS ITS MONEY WHERE ITS MOUTH IS BY POURING ALMOST £15M A YEAR INTO THE GAME IN
· We have COME through the transition from amateur game to professional game intact.
· We have RESTRUCTURED our leagues in a manner which will encourage the development of the National side.
· We now have the finest
· Considering the potential cost of say Wembley Stadium AT £800 MILLION what we achieved here in
· The Stadium is located in the city centre rather than a remote location. Accordingly, its contribution to the regeneration of the city of
· We are one of only two of the major
· At grassroots level our sport is thriving.
· We have every reason for optimism from this point forward.
IF I COULD BE GRANTED ONE WISH BEFORE I LEAVE THE WRU IT IS THAT THE POLITICIANS WOULD FINALLY SEE THE TRUE VALUE OF SPORT IN THE
SPORT DESERVES TO BE TREATED WITH GREATER RESPECT, NEEDS MUCH GREATER INVESTMENT AND SHOULD BE CONGRATULATED FOR THE ROLE IT PLAYS IN THE MODERN DAY SOCIETY AS AN EMPLOYER, REVENUE RAISER, HEALTH ENHANCER AND PLEASURE PROVIDER.
THE INTRODUCTION OF THE NEW MANAGEMENT STRUCTURE FOR THE MILLENNIUM STADIUM HAS BEEN A POSITIVE STEP. THE PORTFOLIO OF EVENTS AT THE MILLENNIUM STADIUM CONTINUES TO GROW WITH THE RUGBY LEAGUE CHALLENGE CUP FINAL THE LATEST TO JOIN AN IMPRESSIVE LIST THAT AGAIN CONTAINED THE JEWEL IN FOOTBALL’S CROWN – THE FA CUP FINAL.
THE CHALLENGE CUP FINAL WAS SUCH A ROARING SUCCESS THAT IT WILL BE RETURNING TO OUR STADIUM FOR AT LEAST NEXT YEAR, AND POSSIBLY EVEN LONGER, WHILE THE 2004 FA CUP FINAL WILL AGAIN HEAD THE VAST ARRAY OF FOOTBALL MATCHES AT THE STADIUM.
WE ARE ALSO NEGOTIATING AN EXTENSION TO OUR CONTRACTS WITH THE FOOTBALL ASSOCIATION AND FOOTBALL LEAGUE AND HAVE ATTRACTED THE STEREOPHONICS IN DECEMBER TO CLOSE THEIR SELL-OUT
BUT NEVER FORGET OF COURSE THAT 1ST AND FOREMOST IT IS A
WHAT A FANTASTIC ASSET WE HAVE FOR
I’M NOT SURE WHAT IT WAS THAT DROVE THE FIRST WRU TREASURER, RICHARD MULLOCK, TO EMIGRATE, BUT I CAN ASSURE YOU MY MOVE HAS NOTHING TO DO WITH ANY DISCONTENT WITH THE FINANCES OF THE
IT HAS BEEN AN HONOUR AND A PRIVILEGE TO BE A PART OF WELSH
MR PRESIDENT, LADIES AND GENTLEMEN, THAT CONCLUDES MY FINANCIAL REPORT. BEFORE I TAKE ANY QUESTIONS FROM THE FLOOR, I WOULD LIKE TO THANK OUR AUDITORS, WALTER HUNTER & CO, FOR THEIR GUIDANCE THROUGHOUT THE YEAR.
MY THANKS, ALSO, GO TO THE FINANCIAL DEPARTMENT AT THE WRU FOR THEIR
