NEWPORT Rugby Club lost almost £1.5m in the year ending July 2000 -- and club benefactor Tony Brown warns that professional rugby will probably never make a profit.

Newport's costs, which includes players, coaching and ancillary staff, rose from £830,000 to £1.89m, chairman David Watkins reported at last night's annual meeting.

"But we graduated from being semi-professional to being totally professional," he stated.

"The loss for the year totalled £1.47m, an increase of £845,000 over the previous year's deficit of £598,000.

"It was anticipated the cost in the first year of rebuilding would be substantial, and the first year of a three-year business plan involved spending heavily to attract players of high quality in order to provide quality rugby.

"Because of our previous poor performances this was initially a difficult and expensive process.

"However, we subsequently signed several high-profile players and Newport has assumed its proper position in the forefront of Welsh rugby."

Tony Brown warned: "The future must get better, there is no question of that. I did make some mistakes, though at least I'm paying for them myself.

"Last season's sponsorship, marketing and merchandising has been a revelation for the UK.

"But I still can't see professional rugby making a profit. Either it will break even or there will be so few clubs left in there may be a small profit.

"I can't see a break even figure, only not such big losses in the future. There will be an improvement at Newport in the current year; though there will still be substantial losses they will be somewhat less."

Chief executive Keith Grainger revealed the huge improvements in club revenue.

The club shop had progressed from making £10,000 a year to the current £300,000 while bar sales had gone from £4,000 on a match day to £13,000, and for the Munster weekend to a staggering £34,000.

Season ticket sales had gone from 700 to 3,300 last year and a likely 4,000 this season. Gate income should gross £750,000.

Pictured, left to right, are Newport's chief executive Keith Grainger, owner Tony Brown and chariman David Watkins at the meeting.

* Phil Davies, previously community development director, has been appointed communications director at Newport.

"To take a rugby club forward in the modern professional era requires investment not just in your on-field team but also in the infrastructure and personnel," said Brown.

"We are lucky to have two of the UK's most dynamic and experienced commercial rugby men in Keith Grainger and Phil Davies."