Sport as an Investment
The London Irish Experience
Chairman Brendan Mullin
The London Irish Experience
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Background
Amateur to Professional Rugby 1995
Difficult years 1996-2002
Transformation 2002-2004
The way forward based on sound financials
and a positive rugby environment
Initial Approach re investment 2001
• Interest in sport/ Rugby
• Access to finance
• Initial reaction
• Further analysis
Rugby in England at that time
• Prospects for English Rugby
• Franchise/ position amongst Premiership
• Players strike/ RFU
• Primacy of contract issues
• Firm position estd RFU/ Premiership clubs
• Once principles established LIH investment easy
decision
• Investment Equation: property backed / commercial
prospects
• 2001
Losses per annum averaging £1m
Crowds at 6,500
• 2004
Profits at £300k
Crowds at 11,000
2x 24,000 crowds this season
Investment
• Underwritten share offer Stg£2.2m by firm
• New and existing investors participation
• Deal completed
• BM director to represent 20% interest
LI Rugby/ LI Commercial
• First major trophy Twickenham - Powergen Cup 2001
• Good squad
• Excellent competition - best club tournament in the
World
Commercially uncertain
• Within 2 Board meetings obvious problems
• Management team CEO/ commercial director poor
• No serious finance function
• Restatement of budgets
• Focus on Rugby
• Radical action required - traditional amateur operation
• Brendan Mullin Chairman role - December 2002
• Second Irish based director added business
experience
• Action
1. Replaced CEO with Conor O’Shea
2. Replaced Commercial Director with Pat Coyne
3. Full time finance function installed and Finance Director installed
4. Positive proactive Board
February- April 2002
• Very difficult period
• Off the field cash deficit £0.5m on continuing losses
• On the field fighting relegation against good quality
sides
• Needed to raise cash
• Needed to stay in the Premiership
Results
• Beat Bristol last game of season to stay in Premiership
• Excitement?
• Tension?
• Good for business
• Cash raised - finances now sound
• Bristol experience when relegated
Results
• Financial Performance – 2003/2004 profit of £300k
• Commercial Performance / positive background
• Rugby Performance - consolidation turning to
Premiership/ European Cup ambition
Support from various sectors
• Fans - Reading/ Madjeski Stadium
• Board – more focussed/ aware
• Sponsors/ Commercial - tougher conditions but
English Rugby very strong
• RWC 2003 impact. Rugby replaced cricket as No 2
sport in England
Future
• Rugby – compatible with profit
• Commercial – sponsors/ crowds/ merchandise
• Overall English Rugby - very positive future
• Clubs in Premiership profitable
• Return on investment
London Irish brand
• Guinness/ Diageo
• Global push- USA/ Europe?
• Unique position amongst Premiership Rugby clubs
• Must be competitive on the field
Must be commercial off it
• Return on investment/ value in franchise