The sustainability of rugby in New Zealand comes under the microscope at a two-day forum starting in Wellington tomorrow.
Even the most traditional vestiges of the national game, such as the provincial championship, will not be safe from dissection as a wide array of rugby shareholders seek to boost sagging elements of sport.
An apparent slump in interest over the past two years — measured by falling crowd and television viewing figures — and the departure of top players to big-spending overseas clubs are prominent issues to address.
Perhaps even more pressing are the mounting financial problems faced by provincial unions, many of which reported significant financial losses last year.
Officials from each of the 26 unions and five Super 14 franchises will address the New Zealand Rugby Union (NZRU) about changes needed at all levels to improve rugby’s health over the next five years.
Joining them will be invited players and coaches and other rugby thinkers such as John Hart and Grant Fox.
At the heart of discussions will be how to fund professional rugby in a world market dominated by the massive finances of French and English clubs, while also managing the need of the amateur game here.
NZRU chief executive Steve Tew said he could sense an appetite for innovation, with his organisation to act as a facilitator for all manner of ideas.
Changes to the way players are contracted and a tweak to All Blacks’ eligibility rules may be forthcoming while the introduction of overseas franchises and venues for professional rugby competitions could not be discounted.
The domestic Air NZ Cup enters its third year under an expanded 14-team format this year, after which it was to be reviewed.
Several provinces have felt the financial squeeze, having to pay players sums they cannot afford to remain competitive, and have reported losses in the hundreds of thousands of dollars.
Otago, Northland and Southland have voiced particular concern while last week the ailing Bay of Plenty union announced an assistance package from the NZRU, something critics fear could become an ongoing scenario.
New Otago chief executive Richard Reid walked into enormous financial problems at his union.
“We’ve got to make sure we’ve got the money to pay for everything, clearly that’s a big one, generating income,” he said, pointing out that income only came from four sources.
” If that fluctuates, whether it be sponsorship, gaming machine funding, grants from New Zealand rugby or test match allocation, it doesn’t have to move far for you to have a pretty average year.”
Struggling unions have already started cutting back on contracted player numbers to the national minimum of 26 and reducing their wage budgets which are mostly well under the salary cap.
By contrast, the bigger unions such as Canterbury have voiced concern about a competition that doesn’t allow it to maximise its earning potential.
Some solutions already raised include reducing the number of teams in the provincial championship — possibly through amalgamation — the involvement of Australian teams or running it as an amateur competition concurrently underneath the Super 14.
New Zealand Rugby Players’ Association head Rob Nichol recently warned that New Zealand was on the verge of becoming a “feeder” nation to the northern hemisphere if changes to the New Zealand structure were not forthcoming.
Nichol has touted private ownership of Super 14 franchises as the next step to inject money into a limited market.
Since rugby turned professional in 1995 those franchises have been run by the NZRU and the players all centrally contracted.
Former All Blacks coach Hart supports Nichol’s view, believing it is the only way to keep pace with the northern juggernaut.
“Suddenly, their (English and French) models are looking far superior as they are beginning to evolve the partnerships that will take their game forward, while ours stagnates,” Hart said.
“European football has proved that money can be made from the club game and there are now billionaires from the US lining up to buy their way into British football.”
Hart is concerned by figures that test rugby in Europe generates about three times the money of the tests in the southern hemisphere.
He said those disparities would only grow under current structures.
However, Craig Norgate, a prominent New Zealand businessman and a former director of the NZRU, believes privatisation surrenders a strategic advantage of New Zealand rugby.
He fears the franchises will all fall into rich foreign hands and spark the onset of a war over who has first rights on players, something that has plagued the French and English games since 1995.
Norgate instead advocates scrapping the Air NZ Cup, which he believes no longer has a place in the professional game and was decimating provincial financial accounts.
He will get support on that front from Australian rugby boss John O’Neill, who wants Super rugby to cover half the year, with mid-year inter-hemisphere tests turned into midweek fixtures.
Ian Noble
Guest
Bob Micheal Wray and Tom Walkinshaw have no ego's, come on both high profile chairmen of Saracens and Gloucester and definitely the driving force behind both clubs. Remember Levett and Richmond where it went horribly wrong. I agree that love of rugby is a driving force, but ego is also a major driver.
bob
Guest
I'm not sure ego has much top do with the investors in NH rugby... let's face, cynical as we are, who cares who is standing alongside the players? Actually, I can't ever recall a chairman standing alongside the squad? It would be bad taste. I think they are involved for the same reason we all are... love of the game. I know my local anateur club has a rich chariman, who puts in heaps, but expects and gets, no special treatment, any more than the others giving what they can, be it time, skils, or sponsorship. Of course, they will all make money from success, and I think they are looking to grow the game within the country... and perhaps there are tax incentives too... but mostly, it's love of union.
Ian Noble
Guest
AndyS I think a combination of ego and a love of rugby. I suspect that that the financial status of some of the clubs is pretty questionable and cetainly would be without the fiscal support of the wealthy individuals. The majority are all looking to find bigger stadia to increase match revenue and of course through skillful PR they are able to keep rugby in the public eye. The debut of Cipriani and his disciplining following his nightclub incident has got alot of a paper inches and being used by the football fraternity not only to highlight the lack of exciting new talent coming through in their game but that rugby's disciplinary ethos should be followed by football. This is great news for rugby as it is setting the standard of behaviour nationally All this helps to put bums on seats and increases the potential TV audiences, the hope is that by continuing to produce attractive club rugby and the continuing success of the European competitions reliance on wealthy individuals may lessen as they become financially stronger. Harlequins do not have a wealthy backer but it is run by a company with very strict financial controls. Not being able to compete for the top level international stars they have concentrated on their academy and the development of younger English qualified players, although there has been a rumour that Vickerman might turn up next season. The average age of the team at the moment is circa 24 and they are pushing very hard for a play off position in the the GP championship. I suspect a number of other clubs are now probably very envious of the Quins model after two tricky years. I am bias, but after a sticky period around Christmas, Quins are playing a great brand of rugby at high tempo under the guidance of Dean Richards.
AndyS
Guest
Ian, The idea of millionaire backers for clubs is a little alien down here, so I am curious - what prompts them in the NH? Do they expect and take a financial return from the club, is it an ego thing that depends on how much they are prepared to pay to be seen on TV with the players, or is it something else entirely?
Ian Noble
Guest
Daniel My father in law is from NZ and we have a number of relatives in both the N & S islands, so I have no axe to grind. However I am concerned about the future of NZ rugby. You might respond and say but it is the AB's, but regrettably commercial reality is beginning to dawn and it will have an enormous impact. They just can not compete with the wealthier nations for their own players and I suspect that more AB's may well move abroad to ply their trade as there is a danger that the financial status of some of the provincial teams will become untenable. In addition they have the RWC2011 to prepare for and fund, thank god for the NZ govt is underwriting the event. I have a feeling that in hindsight they probably would have perferred to have lost the bidding process. I have read John Hart's paper on the future of NZ rugby and it is very interesting but in my opinion it does fall down badly in one particular aspect. The funding of club rugby can not be compared to football, the spectator base is smaller, the TV audiences both nationally and internationally are much smaller and revenues generated are considerably smaller. In the early days of professionalism a number of millioniares lost alot of money and clubs such as Richmond, London Scottish, Orrell, Bedford struggled and disappeared from the professional game in England because their financial model was not robust enough to meet the demands of the professional era. Rugby had to find it own level and the clubs with the backing of some wealthy individuals where able to restructure and survive not because of the wealthy individuals but because of the introduction of a salary cap and tight financial controls. Most of them don't make oddles of money but they wash their faces. It is not the world of the billioniare investor! As far as Mr Norgate is concerned he could learn alot from the RFU model, which as evolved by force majeur rather than by dictat. First there is now an agreement in place between club and country which comes into play after the NZ tour. Secondly whilst the RFU was batlling for release of players they did not have to pay compensation to the clubs and therefore they were able to channel greater resources into the grassroots game, building up the clubs, focussing on community rugby initiatives and generally increasing exposure of union to a wider audience than ever before helped of course by winning RWC2003. Therefore the game outside the professional game is much stronger and provides the future elite player but also and probably more importantly the knowledgable spectator of tomorrow. Frankly I can not see many foreign investors being attracted to NZ rugby, whilst they have probably got the strongest squad of elite players in the world, the game as set up in NZ is too parochical and will not excite the investor so Mr Norgate I would not be worried on that score. The only places in NZ to rival the catchment areas of say Leicester and Gloucester to grow revenues and make the game financially robust would be Auckland, Christchurch and Wellington. Finally on the question of mid week tests it might be pie in the sky. Twickenham for example has one major game on the first Thursday in December, it is the Varsity match and it attracts 35/40000 and has been played at Twickenham for decades. In spite of planning restrictions on the number of functions at Twickenham the movement of 82000 people for a test match in a SW London suburb mid week would be a nigthmare and and disruption to business and flow of people to and from the west side of London would be too difficult. It is bad enough at the weekend but because traffic movements are less and people are more relaxed not having to battle the rush hour it is more acceptable. The RFU spend alot of money on PR keeping the population of Twickenham sweet and have built up an excellent reserviour of good faith. I know because I live in Twickenham and I was lucky enough to win a couple of tickets in the residents ballot for last years 6N's. Wembley would be a possibility because it is more isolated and the transport infrastructure is better but would the RFU want to switch a major test away from Twickenham, I think it would be unlikely. I can't answer for Cardiiff, Paris, Dublin or Edinburgh, but these tests are more then revenue generators for the respective countries, they are occasions for the spectators. The tradition in the NH is that they are all day experiences and mid week tests just don't carry the same cache as a weekend test. Whilst I remember, games held in the SH are shown at breakfast time in the NH, I think you will find TV audiences would fall dramatically as quite rightly people would be more concerned about fighting the rush hour to work. Nothing like a full English breakfast on a Saturday morning watching a test from the SH at the local pub and many of the amateur clubs hold functions at their clubs with bacon butties and beer as a means of raising revenues.