Pre-tax profits at the golf royalty earnings firm owned by golfing superstar, Rory McIlroy here last year declined by 36.5 per cent to $9.24 million (€8.8 million) after a hike in directors’ pay.
New accounts filed by the golfer’s Rory McIlroy Management Services Ltd show that the company recorded the drop in pre-tax profits as revenues declined marginally from $37.66 million to $36.12 million.
Profits decreased as pay to directors more than doubled from $2.7 million to $4.7 million.
The pre-tax profit for the Dublin-based firm takes account of a non-cash write down of $15.7 million in McIlroy’s image rights during the year in accordance with accountancy rules.
The accounts disclose that the net cash generated by the company from operating activities totalled $20.19 million (€19.28m) for 2023 which was down slightly on the €20.47 million generated in 2022.
The company recorded operating profits of $10.69m and interest payments of $1.45m reduced profits to a pre-tax profit of $9.25 million.
The in-form McIlroy earlier this month pocketed €4.74 million for his third DP World Tour Championship victory and sixth Race to Dubai to claim over €24.5 million in tour earnings for the year .
Prize money and other such earnings are not part of the Irish company's revenue because they tend to be treated as income, and taxed accordingly by the country where the earnings are won.
The accounts show that the company's administrative expenses include a licence of $2.69 million paid to Rory McIlroy. In turn, Rory McIlroy Enterprises Inc paid a $752,798 management fee to the company.
Further, the accounts show that the company redeemed $27 million in loan notes held by Rory McIlroy, the sole shareholder of the company.
The accounts show that cash funds at the McIlroy company decreased from $21.17 million to $12.4 million.
The directors state that “golf’s popularity is rising, shown by the increasing number of players in both traditional on-course and alternative game formats. This trend positively impacts the business of professional gold for the medium term”.
The firm recorded a post tax profit of $6.4 million after incurring a corporation tax charge of $2.77 million.
The main activity of the company is managing royalty earnings and management fees for Rory McIlroy, one of the most marketable players in world golf.
McIlroy's earning power was underlined last year when he received $15m first prize place under the US PGA Tour’s $100m Player Impact Programme (PIP) where high profile golfers are rewarded for generating the most interest in the PGA tour measured through metrics such as media and TV sponsor exposure.
At the start of 2023, the company had a $178.54 million book value placed on McIlroy’s image rights and the book value reduced to $162.84 million at the end of last year.
Rory McIlroy sits on the board with his father, Gerry, Sean O’Flaherty, Peter Crowley and Neill Hughes while Donal Casey resigned from the board in August 2023.
At the end of last year the firm employed seven made up of five directors and two in administration. Staff costs totalled $5.68 million that included pension contribution payments of $77,846 and social insurance costs of $478,489.
The company trading as Rory McIlroy Inc, was established towards the end of 2013 by McIlroy.
The McIlroy company manages all the royalty payments from the golf star's various endorsements.
McIlroy works in many countries but opted to locate everything to do with his brand and intellectual property in Ireland by setting up the firm here as part of a strategy to simplify his business affairs.
In setting up the firm in the Republic, McIlroy spurned the route often taken by superstar sports personalities by creating a complex structure that would have located his management company in the United States while protecting his wealth with tax havens such as the Virgin Islands or Bermuda.
