Cash injection for NZ unions

Mon, 17 Dec 2012 19:12
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New Zealand provincial unions are set to receive a cash injection as a result of the All Blacks’ much-maligned sponsorship deal.

New Zealand provincial unions are set to receive a cash injection as a result of the All Blacks’ much-maligned sponsorship deal.

A five-and-a-half-year deal reached between the New Zealand Rugby Union (NZRU) and AIG in October caused an uproar in New Zealand as it saw the All Blacks emblazon a sponsor’s logo on the famous black jersey for only the second time in their 107-year history.

The financial rewards of the agreement, however, came to light on Monday when NZRU chief executive Steve Tew intimated that the 26 provinces, many of which are expected to once again post losses this year, may receive bigger grants from the central union.

"It's timely to sit back and say: ‘right, what is the cash balance the NZRU need?’ And then flowing on from that there will be a mid-term check for our provincial union funding regime," said Tew.

Tew said that while the global economic outlook was far from ideal, the AIG deal, coupled with the sponsorship arrangement with adidas, which are denominated in foreign currency at what he stated were "pretty favourable rates", meant that the NZRU’s financial situation was healthy.    

"I don't know if the world has changed that significantly but it remains very challenging for our provincial unions and we have certainly improved our position,” he said.

"We will take a deep breath once the collective is out of the way because that affects both how this organisation and the provinces will operate financially for the next three years anyway.

"It is worth noting that the NZRU has a very significant percentage of their short-term income now contracted. So that gives us a lot more confidence than a lot of other organisations in the country.”

The cash injection will benefit the likes of the Canterbury Rugby Football Union, which despite being one of the wealthiest unions in New Zealand, is still depended on NZRU grants and posted a loss of NZ$563,000 ($475,000) last year.

The AIG deal may also result in the All Blacks playing less Tests in 2013. Two Tests this year, the third Bledisloe Cup Test and season finale against England at Twickenham, were added to the All Blacks’ 2012 schedule to boost revenue.

Tew said that the luxury afforded to the union by the lucrative contract will allow the NZRU to better manage the workload of the world champions.  

"Now that we have locked in such a significant portion of our commercial revenue, we can make the decisions based more on what is best for the team rather than, necessarily, having to take the money into account," he said.