IRFU chief Kevin Potts: The Rugby World Cup costs us money and we’ll report a significant deficit

The last time I sat down with Kevin Potts, he was masterminding Ireland’s bid for Rugby World Cup 2023. In the event, Ireland lost out to France. Eight years on, he is now chief executive of the Irish Rugby Football Union (IRFU), the man charged with overseeing the game in Ireland and keeping its finances in order.

It seems a long time ago now but you get the sense that the experience has shaped the way Potts approaches his current job.

“Ultimately people will see it as a failure, and it is. We didn’t win the bid. But for me personally it was a wonderful project to be part of and I learned a lot and built up a lot of really strong relationships with people at senior levels around the place, which is very helpful.”

We are sitting in the clubhouse at St Mary’s RFC in Templeogue, Potts’s home club, just ahead of Ireland’s opening game win against Romania in the Rugby World Cup, reinforcing the essential connection between the local and the global for the sport’s success.

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Potts was bullish about the success of the tournament. “So far, it is looking like it’s going to be a fantastic tournament,” he said. The money that France assured organisers World Rugby an event in that country would generate was seen as key in the eventual decision. But, for Potts, money is not a dirty word.

The IRFU recently reported an unexpected operating surplus of €5.9 million for the year to the end of July 2022 against a projected deficit of €4.9 million and losses of close to €47 million in the previous two years. But the shadow of the Covid pandemic still hangs over the game. Potts noted in the IRFU’s annual report that but for Covid grant aid of €18 million from the Government, the organisation would have booked a substantial operating deficit of more than €9 million.

And he is quite certain that the red ink will return for the next two years – with projected losses of between €5 million and €6 million per annum – before, hopefully, the renegotiation of broadcasting contracts increases revenue in the game.

“We have limited revenues. Every penny we make goes into the game. Balancing the books is an ongoing challenge because we have the same inflationary pressures as any other business, whether that’s energy costs, player costs or facility costs. But we are determined, as are our provinces, that we have got to live within our means.

“You can see how other sports, other clubs, are going into trouble because of that so, in our view, we spend what we have, or what we can reasonably expect with certainty.”

The €115.6 million the IRFU took in last year in revenue was up 37 per cent on 2021, boosted largely by a 57 per cent jump in income from matches involving the national teams.

Of that, just over €60 million went to fund the professional game in Ireland with another €14 million spent on elite player development. The domestic game – clubs and schools across the State – shared just over €13 million.

Financial burden

For the IRFU, the World Cup is a financial burden, not a boom.

“Most of the Tier One [highest ranked] unions would lose money during a Rugby World Cup year,” he says. In part, this is because they lose the ticket and sponsorship revenue that comes with the traditional series of international matches in November. On the flip side, preparing the squad for a World Cup brings with it additional costs. And, of course, there is no prize money.

“So, it costs us money and next year we are going to be reporting a significant deficit for that reason,” Potts says.

Not that he’s complaining. “Don’t get me wrong, I mean it is the pinnacle of our sport and we are delighted to be part of it and we make provision. And we all know that in a Rugby World Cup year it’s going to hit us financially. But from a global rugby perspective, it’s the major opportunity. World Rugby has to generate the money they need to develop the game over the next four years.”

The game is changing. Player safety has become a priority with regular updates to game rules (called laws) around tackling and contact, not least under the pressure of ongoing legal action from former players alleging serious life-limiting conditions as a result of their careers.

Financially too, the game has taken steps into the unknown, not least with an agreement giving CVC a one-seventh holding in the Six Nations for €425 million, of which €44.6 million will come to the IRFU over the coming years.

‘The money allocated to the women’s game has doubled in the past two years to €6.4 million, Potts says. The IRFU is on record as saying it hopes to increase that further, to €7.9 million per annum’

It follows the agreement in 2020 where CVC paid €140 million for a 28 per cent share the United Rugby Championship, featuring Ireland’s four professional provincial teams alongside teams from Scotland, Wales, Italy and South Africa. It holds a similar stake in England’s top domestic rugby league.

Potts is enthusiastic about CVC’s involvement which, he insists is long term. He dismisses the notion that rugby’s administrators were somehow hoodwinked into doing the deal and is categoric that there is no prospect of the buyout group taking majority control of the game.

“They’re very professional, have been extremely positive to deal with and what they bring to the table, aside from the investment we got, is a laser focus on commercial opportunities and [their] experience in doing so, that we sitting around the table at the Six Nations.

He cites the Netflix behind-the-scenes documentary series as “something they would have suggested, and not that it was financially attractive, but it opened the door to a new audience”.

But it does mean diminished revenues from the Six Nations and autumn internationals pot for the IRFU and the other five unions, which makes sponsorship deals – such as the recently-announced kit deal with Canterbury and others that are in train – and a renegotiated broadcasting deal in 2026 all the more critical.

Speaking of broadcasting rights, Potts says balance is required “to ensure we continue to grow and invest in the game, and have as many people seeing the game as possible”.

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The IRFU’s preference is that rugby is shown free to air, as it currently is in Ireland, but added that the game needs to make sure it can and grow revenues.

“There are games shown on pay per view already, on Amazon in England, et cetera, and that’s certainly part of the model going forward. I can’t give any cast-iron commitments but, as of now, the Irish channels are competing and putting forward a value that enables them to show the games, and long may that continue.”

On the field, it has largely been good news for Irish rugby, despite the pressures of Covid. The men’s senior team is ranked number one in the world, having won a Six Nations grand slam this year for the second time in six years – having won only two in the previous century.

Its up-and-coming players on the U20 team have beaten all comers in their Six Nations in three of the last four years the competition was run and got to their World Cup final in July.

At Rugby Sevens level, both the men’s and women’s teams have qualified for next year’s Olympics.

The one blot in recent times has been the Irish women’s game at 15-a-side level, which has suffered a precipitous decline in fortunes over the past decade.

Relations between the team and the IRFU reached a nadir in 2021 when 62 current and former internationals signed an open letter to the Government complaining about “multiple cycles of substandard commitment from the union” which they argued had provided “inequitable and untrustworthy leadership”. The group said they had lost “all trust and confidence in the IRFU” and sought Government intervention to oversee two reviews ongoing at the time.

It was a damning indictment and a knee-jerk response from a wounded IRFU only added to the flames.

‘I’d like to think that Ireland will host some form of a Rugby World Cup in the future, perhaps in partnership with the home unions’

Potts took over as chief executive just days after the affair and has from the outset taken a direct interest in resolving the issues around the women’s game.

“We got things wrong,” he concedes, “and since I took on the [chief executive] role, I have personally taken a more hands-on approach to try and put our women’s game on the footing that it needs to be.”

That has included a shake-up of personnel and the issuing of a number of central contracts to provide some financial recognition of the necessary commitment required of elite women players. The money allocated to the women’s game has doubled in the past two years to €6.4 million, Potts says. The IRFU is on record as saying it hopes to increase that further, to €7.9 million per annum.

He accepts it will take time to see results but says that, ultimately, “the objective is creating a performance culture to enable the players to achieve their ambition”. As of now, he says he is confident that the agreed plan “is progressing well”; the reaction from the women players to the new approach has, so far, been positive.

Potts is certainly not blind to the rapid growth potential in women’s rugby and is keen to grow the game. He acknowledges that doing so will require more investment than is currently available and is hopeful of attracting a sponsor to that end.

Abrasive blindside flanker

It may have helped in defusing the crisis that, unlike his predecessor Philip Browne, Potts brings rugby-playing pedigree to the post. An abrasive blindside flanker, he captained his club, St Mary’s, and Leinster before serving as captain of the first development tour undertaken by the IRFU back in 1993 under the leadership of the legendary Noel Murphy and then Irish senior coach Gerry Murphy.

Among his team-mates on that tour – notable as the first Irish rugby tour to South Africa post-apartheid – were future Ireland stars David Humphreys, Conor O’Shea and Paul Wallace, who just four years later was playing for the British and Irish Lions back in South Africa. In all, 16 of that 30-man squad played for Ireland, clocking up 258 caps.

For Potts, who had already represented Ireland at schools, B and A level, it was not to be despite being strongly tipped for national honours by this paper’s Gerry Thornley among others.

“When I look back, that tour gave me a glimpse of what it must be like to be a full-time player now, where you’re training every day, rugby’s your total focus, you’re in camp, and it was a fantastic experience,” he recalls of the tour in what were the dying days of rugby’s amateur era.

It was a busy time for Potts. He had finished his final accountancy exams at KPMG and was also preparing for his wedding.

Just after the tour, Potts made the jump from mainstream accounting to Ireland’s burgeoning offshore funds sector based in the IFSC, joining Deutsche International whose Dublin base had been established by former Ireland and Leinster centre Paul McNaughton.

A little over a decade later after stints as managing director at BNP Paribas Fund Services and Mellon Financial, he returned to his sporting roots, joining the IRFU as domestic game manager in 2005 with a focus on the game’s grassroots clubs and schools.

The following decade saw him move up the ranks, first as director of corporate affairs and then director of operations and strategic development before being made chief operations officer to Browne in 2015 with a brief to secure the Rugby World Cup for Ireland.

Despite having lost out, he still looks back on the experience of being involved in a project of that scale – bringing together governments across the Border and getting the support of traditionally competing sports, such as the GAA – as being immensely positive. He notes that all three competing bids – South Africa being the other – were deemed well capable of hosting the World Cup.

The learnings? “I guess when it comes to major global sporting bids, you know, for all the work, all of the goodwill, all of the excellence, all of the Government backing, all the support, the politics is still really important. Ultimately, if your key allies, the people you would work with on an ongoing basis, don’t support you in the end, you don’t really have much of a chance.”

So could we try again in the future?

“I think if we stand back and look at that question honestly for a global tournament... I guess the stadia capacity they require... I’d like to think that Ireland will host some form of a Rugby World Cup in the future, perhaps in partnership with the home unions,” though he is quick to add that it is not something that been discussed with rugby administrators in England, Scotland and Wales.

C.V.

Name: Kevin Potts

Age: 56.

Position: Chief executive, Irish Rugby Football Union (IRFU).

Family: Married to Deirdre, with two daughters, Ellen and Laura, and a recently arrived first grandchild, Ari.

Outside interests: “It sounds cheesy, but going to the movies; I love going to the big blockbuster movies.” Otherwise, walking the dog and boot-camp fitness “which I go to three times a week”.

Something you might expect: He was first introduced to rugby through the Community Games in the mid-1970s (and still has his medal).

Something that might surprise: In his student days, he earned money by giving lessons in piano, at which he had achieved grade eight.