Lions tour helps ARU announce 2013 surplus

By News / Wire

The Australian Rugby Union have announced a much-needed $19.5 million surplus for 2013 as the financially-strapped body faces some tough times ahead.

After recording combined losses upwards of $20 million over the previous two years, ARU chief executive Bill Pulver has done an impressive job in cutting costs across the board since taking over from John O’Neill.

However, a major contributor to finishing the year in the black was the lucrative British and Lions tour which generated an incremental surplus of $35 million.

This year’s three-Test visit from France won’t generate anywhere near that kind of return, and in 2015 the ARU is bracing itself for an even tougher 12 months, with the World Cup to eat into the domestic international season.

But the Lions tour wasn’t the sole reason for the financial turnaround, with the ARU also boasting increased participation, the influence of Ewen McKenzie as coach of the Wallabies and a new strategy to grow the game overall.

Chairman Michael Hawker described the last 12 months as energising for a troubled code.

“The British and Irish Lions Tour generated a significant surplus for us in 2013 and will help steer Australian Rugby towards future success on and off the field,” Hawker said.

“(We) have three key areas of focus under the new strategy, expand participation; develop elite success; and unlock our financial potential.”

Hawker said building a sustainable financial model, regardless of which teams visit Australia to play the Wallabies, was the challenge that still remains for the ARU board.

“Our efforts to reduce Australian Rugby’s cost base and unlock new sources of revenue will continue in 2014 as we work to develop a business model that is less reliant on one-off windfalls,” Hawker said.

The incremental profit generated by the British and Irish Lions Tour was offset by operating deficits of around $8m from other ordinary business; $5.5m in financial assistance provided to the Melbourne Rebels during the year; and an additional $2m investment in the Sevens program.

The AGM also included the election of three new board of directors, including Paul McLean, a former Wallaby five-eighth who was ARU President last decade.

Nerolie Withnall and Cameron Clyne were also elected, while Dick McGruther was endorsed as an ARU life member.

The Crowd Says:

2014-05-27T11:03:51+00:00

Worlds Biggest

Guest


Simon you make a lot of sense as always. Let's give Pulver some time to clean up the mess left by JON. I'm all for Privatisation and raising capital through the Corporate sector. I think most people who support the game would be happy ( within reason ) to chip in to assist in raising the required capital.

2014-05-27T09:40:42+00:00

Katipo

Guest


@Bakkies The Euro Club season shouldn't prevent the Wallabies touring New Zealand (or vice versa) while Argentina tour South Africa in the window allocated for The Rugby Championship. In fact you could have the Wallabies tour NZ WHILE NZ tour Australia and meet up for the 3 tests (that they play now). That would be cool. Mid-week double headers: All Blacks v Waratahs from Sydney and Wallabies v Crusaders fromChristchurch. Potentially a mouth watering lead up to the Bledisloe. I take your point about European teams though. The Europeans could stick to shorter tours. This years French tour could squeeze in two mid-week games without adjusting the window. They have a big enough squad for that. And the value of playing in the provinces is enormous.

2014-05-27T08:46:59+00:00

Bakkies

Guest


The cluttered European club season and the RWC doesn't allow for significant tours each season hence the short windows set by the IRB.

2014-05-27T08:46:08+00:00

Rouaan

Guest


Winning titles will help, even if it is utilized as a short/medium term strategy. Exploit the Rugby World Cup and the Olympic Sevens as incentives to lure some special athletes to rugby union, even if it is only for the next 3-4 years...they will bring their fans with them to generate more interest in union. I'm dead sure that Sonny Bill Williams and Israel Folau have that consequence among their rugby league fans. SBW already committed to next year's World Cup and the Olympic Sevens. Try to convince some "special" league stars to give it a go to experience something different. If you get closer to wining titles/ gold medals the interest...and money...WILL GROW !! It is worth pursuing.

2014-05-27T08:28:12+00:00

warrenexpatinnz

Roar Guru


I like your posts Simon, some suggestions certainly left field but in a congested sporting scene, locally and internationally where sponsorship money, TV deals and crowds fluctuate having a sound business plan with several revenue streams is crucial to surviving the lean years. 1. Finding suitable owner/s; difficult but offer a investment approach to Japanese club rugby sides with the approach around increasing their companies profiles in our SANZAR markets (obviously only where suited) and creating a player transfer system where a number of Japanese players have access to playing for the Super 15 team the club has invested in. The offer of playing one Super 'home' game in Japan at their clubs ground against a NZ team may also help this approach. 2. Think we should allow a two player selection overseas rule. 3. My view on the latest European TV deal and all the doomsday predictions for NZ and Aussie rugby is the opposite to common opinion. It will start with a revolt in French rugby with their local players being ousted from their pathways in rugby by cash seeking SH rugby players. http://www.news.com.au/sport/rugby/little-french-talent-on-show-for-toulon-so-who-will-les-bleus-look-to-against-wallabies/story-fndptke0-1226933113399 This revolt will find its way through all European rugby as young European born players want to, and deserve to, get a slice of the money on offer in their competitions and unless several new teams are unrealistically created over the next few years the door will close quickly on the player numbers from down under. 4. The free to air deal will happen and with Fox assistance as in Fox's case you don't endanger your product by weakening the base as doesn't make for a successful commercial approach. Fox will generate greater revenue by getting new viewers who may like what they see on FTA and who get exposed to better quality rugby and who then decide to watch more rugby which is only available through pay for view. 5. Again I'd look to markets in Asia. The All Blacks have been very successful in creating two strong sponsorship deals which effectively fund NZ rugby as like Aussie rugby the Super 15 teams eat up the revenue and the domestic ITM competition is a financial yo yo. The Wallaby 'brand' is strong but as we aren't at the peak of our powers like the ABs, yet :) we do have the ability to open the door further for Asian rugby. Japan and China love to win on the sporting international stage and their competitive approach to each other on the sporting stage offers an opportunity with rugby sevens and rugby in general. China invests substantial money into Australia and gaining access to logos on a Super 15 teams jumper or even our Wallaby (wash my mouth out here as don't want the AB AIG result!) jumper. Not every idea is a good one, ask my wife and she would suggest even less than what I think are brilliant ones :) .

2014-05-27T07:54:45+00:00

Katipo

Guest


@Hog. I'm an optimist :-) In 5 years time the NRC will be 17 weeks long and Super Rugby will be an 8 week long Champions tournament. Of course, that's what should be happening in 2016 with the next broadcast agreement. I accept it isn't going to happen so soon though. Although, it'll be interesting to hear the broadcasters response to the schmozzle proposed by Sanzar. Sanzar could be in for a rude shock.

2014-05-27T07:18:08+00:00

hog

Guest


Katipo, I totally agree, i honestly hope that the NRC does replace Super rugby, but i am not as convinced as you that will happen. The ARU have come out and said the NRC is a development competition for the development of Super rugby players, that will be run for a total of 8 weeks at the end of the season. Yes maybe it is the beginning of plan B, but they have just commited themselves to another 5 years of "Super Dogs breakfast rugby", i am not so sure they are thinking along the same lines as you.

2014-05-27T07:02:29+00:00

JimmyB

Guest


Quite right BBA, plenty of Lions fans still feeling sore after having their bank accounts pillaged.

2014-05-27T06:59:25+00:00

Katipo

Guest


@hog. The NRC has more than 5 Aussie teams. The NRC is the vehicle with the most potential for FTA. Let me put that another way: Super Rugby was conceived of for Pay TV and that's where it belongs. When the broadcast dollars dry up Super Rugby dies with it. That's about 2020 I predict. In the mean time the ARU would do well to incubate plan B: the NRC.

2014-05-27T06:55:16+00:00

hog

Guest


6. How does the ARU gain more market share at the domestic level when it only has 5 teams, and how does it gain free to air access when they are not interested due to the fact that the product they are presented with has a content that is less than 30% relevant to the local market. And how does the ARU expect to survive when it pretty much ignores the one area that has genuine potentail of future growth, The domestic market.

2014-05-27T06:47:27+00:00

Katipo

Guest


@Ibika. I agree with you. When rugby turned professional the rugby unions thought that an international competition (Super Rugby) would be the unique selling point of rugby compared to the other football codes. But then the Unions promptly took away the indicators that helped fans to recognise the international location of the teams: Auckland became 'the Blues', Queensland became Reds etc. These poor management decisions totally confused the casual sports watcher. It's also true that fans rate the local rivalries higher and the (Canterbury) Crusaders v (Otago & Southland) Highlanders, built on a 125+ year history of Canterbury v Otago rivalries is a case in point. Super Rugby started in 96 with great promise but has become an expensive loss leader for SANZAR now. Super Rugby has become less inspiring for rugby supporters too with its confusing conference structure and tournament rules. (This looks like it will get worse in 2016 too). South Africa already has its own domestic tournament - one of the longest running in the rugby world - the Currie Cup, and NZ has it's national championship (the ITM Cup) which started in 1976. The good news is Australia will try to start it's own domestic tournament - the NRC - in August this year. So there is hope. Currie Cup and ITM are preserved and NRC is started. All is not lost. As @Simon Levington noted, once the ARU gets control of its financial future it'll be able to make better decisions for rugby in Australia as it won't be so reliant on compromised decisions taken as a member of SANZAR. What's needed though is paradigm shift in thinking from rugby administrators - an end to the long version of SANZAR's super rugby tournament - and some people changes in the leadership of the SANZAR member Unions is probably required for that to happen. I'm not holding my breath. Looks like we'll get more of the same silly-ness (expansion = dilution of value) from SANZAR before the true value of domestic tournaments is realised for the Southern Rugby Unions.

2014-05-27T06:25:55+00:00

ibika

Guest


Rugby seems to be have been managed terribly in this country.. especially in comparison to the AFL and to a lesser degree the NRL. The brilliant game between the Highlanders and crusaders last weekend showed the potential of the product and the way forward for australian rugby.. this game could have been live On australian free to air television..we have almost a million of kiwi's living in australia.. but there is no connection for australian fans with the SA super franchises.. it would be far better to develop an australasian competeition with Aust/NZ and Pacific island teams present. ( the africans should develop an african league).. And then develop the Rugby Championship along the lines of the 6 nations..gradually add more teams by all means but thave them play each other only once a year as per the 6 nations.

2014-05-27T01:59:56+00:00

Simon_Sez

Roar Guru


I think Bill Pulver and the ARU board are undertaking their roles in a responsible manner. To decision to cut the costs ARU was obvious and a good thing as the ARU was clearly bloated with too many overheads. Now comes the more difficult task of creating income. What I think are the 5 big questions for the ARU are: How does the ARU: 1. stop the 5 Super Rugby Teams being a drain on its finances? The ARU should consider privatising / selling some or all of the five Super 15 franchises to unload the cash drain. 2. keep the Wallabies competitive, while its best fringe and up and coming players continue to move overseas? - it can't under the current eligibility rules. 3. afford to keep all the best players in Australia playing in the Super 15? - The ARU can't afford all the best players in Australia. As fans we will have to put up with a patched up Wallaby team full of inexperienced players, especially after the World Cup in 2015. 4. afford to move the Super rugby competition to free to air TV? The ARU needs about $50 million to undertake this task. 5. make more money? The ARU has correctly identified it has to unlock the unrealised value of Rugby in Australia. This I think this is where the long term solution lies. The ARU needs to raise a large amount of money ( I think over $500 million) to purchase related assets with recurring income streams so it can even out its cash flows as well as provide a return to its investors/ partners. This is when the ARU will be in the position to secure its long term future, and not be forced to make bad choices because of the lack of money.

2014-05-27T01:51:35+00:00

Katipo

Guest


Super Rugby loses millions of dollars each year. Traditional tours make money. The way forward seems pretty clear: dismantle the expense of Super Rugby; each nation runs its own domestic tournament culminating with Super Champions tournament (as spruiked endlessly by Rugby fans) with traditional tours happening concurrently. How good would it be to see the Wallabies make a 9 match tour of NZ or the All Blacks undertake a 9 match tour of Australia. There is money in that.

2014-05-27T01:37:05+00:00

Kane

Guest


Argentina would be great as it realistically would give the BIL a better chance of winning a series aswell and generate huge interest in Argentina.

2014-05-27T00:22:50+00:00

E-Meter

Guest


And Samoa beat us

2014-05-26T23:57:12+00:00

Bakkies

Guest


4 Nations will be the same as each team only plays each other twice. Super Rugby will be over earlier as the European sides play each other in warm up games.

2014-05-26T23:55:11+00:00

Bakkies

Guest


The Lions agreement runs out after the next tour to NZ the ARU have to realise this. If Argentina get added to the rota the gap between tours will be 16 years. There is nothing to stop them from touring Nth America either which has happened before. Aus and NZ were done on the same tour in the past too. It's not set in stone.

2014-05-26T23:11:38+00:00

hog

Guest


2001, 2013 lions tours, 2003 World Cup, This is what the ARU financed the code with the last 10-15 years Yes the lean years are ahead. So where is the money going to come from. Super rugby is going nowhere, and the Wallabies are no longer the Golden Egg, Until the ARU present to the Australian marketplace a product(a genuine domestic league) that engages mainstream Australia then nothing will change.

2014-05-26T22:46:46+00:00

Kane

Guest


The Lions tour is every 12 years and the World Cup well that was 11 years ago and the next earliest you can host is 2023 and South Africa appear to be the front runner for that then 2027 USA/Canada appear to be front runners and that would be huge for world rugby so it could be another 10-20 years before the next time you host the RWC. The lean years are still to come.

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