LONDON (Reuters) - England's Rugby Football Union (RFU) saw its profit drop from 15 million to four million pounds ($5.07 million) last year as it dealt with the impact of three Premiership clubs going out of business due to financial struggles.
The RFU published its 2022/23 Annual Report on Friday, showing higher reported revenue of 221.4 million pounds (189.1m in prior year), increased investment in rugby at 99.4 million (77.4m in previous year) and an operating profit of four million (15 million in previous year).
The RFU said that during the year all debt from COVID-impacted years has been paid off and that there is 24.9m in cash and 25m in deposits, with a P&L reserve of 123.3m pounds.
"Wasps, Worcester, and London Irish going into administration was the single most defining aspect of the men’s professional game last season, RFU CEO Bill Sweeney said in a statement.
"The after-effects of Covid, levels of debt and the economic environment brutally exposed difficulties for business models with existing challenges.
"In a very difficult financial environment, the RFU achieved an operating profit of four million due to robust financial management.
"The coming years will continue to be challenging with inflationary pressure on our costs, our revenues being under pressure from reduced discretionary spend, and the recovery of corporate confidence. We will continue to implement strong cost control and prudent fiscal management."
The RFU said that its finances work in four-year cycles based on the number of men's home internationals staged at Twickenham Stadium.
The 2022/23 period is the third year in the cycle when there are the highest number of home internationals and, as such, these higher revenues were expected. For the next financial year, as the autumn internationals were replaced by the Rugby World Cup, the annual results will show a significant loss.
Ticket income from seven home matches increased to 48.4 million (33.7m from five matches in the previous year) and the world record crowd that attended the England women's team's victory over France in the Six Nations contributed around a million pounds of revenues from hospitality and catering reached their highest levels ever at 70.8m (61.5m in previous year).
The two other largest revenue streams are broadcast and sponsorship revenues. Broadcast revenue fell slightly to 40.9m (43.6m in previous year) and remains behind pre-pandemic levels. Sponsorship revenue increased from 24.1m in the previous year to 25.9m.
The sacking of previous coach Eddie Jones and his staff before the end of his contract, estimated in media reports to have cost a million pounds, was among a number of costs that contributed to an increase in spending on the England men's and women's teams - up to 25.5m from 20.8m.
($1 = 0.7883 pounds)
(Reporting by Mitch Phillips, editing by Christian Radnedge)