New Zealand Rugby reveal the massive financial hit due to coronavirus
New Zealand Rugby has announced a $7.4 million loss for 2019 and laid bare the financial challenges facing all involved in the sport.
While the $7.4m loss represents a 37 per cent improvement on budget, NZR financial officer Nicki Nicol warned of the significant impacts Covid-19 will bring.
“At New Zealand Rugby we are forecasting up to a 70 per cent decline in revenue and we’ve had to quickly adjust our cost base accordingly,” Nicol said at Thursday’s annual general meeting.
“We know this has had an impact across all areas of our game; our players, teams, competitions, programmes and partnerships with provincial unions, Super clubs and others across the industry.
“It has also had a significant impact on our people and I acknowledge the New Zealand Rugby staff. They have been so professional as we’ve navigated all aspects of these uncertain times.”
NZR also announced an “unrealised loss” of $3.9 million from the original $19.4m investment on the five per cent shares it acquired in the new broadcast deal with Sky Television.
Sky’s share price dropped from 89 to 71 cents since November 1.
As part of the agreement, NZR must hold these shares for a minimum two-year period.
The positive news for NZR is the healthy state of its cash reserves which, at December 31, registered $93 million, excluding $21 million invested in managed funds.
“This strong cash position at year end and robust application of our reserves policy has allowed some much-needed respite to support the organisation associated with the shocks of Covid-19,” Nicol said.
“This has been beneficial in a year when there has been a massive shock to our revenue and we have had to respond by quickly reducing costs across all of rugby. Everyone is playing their part.
“We must now consider a total reset as we look to rebuild the sport in a financially sustainable way.
“The year in review does feel a little academic now, though, as we stand and assess the impact of Covid-19 on both New Zealand Rugby and rugby in New Zealand.”
NZR announced $187 million in revenue for 2019, one per cent down on the previous year but a 40 per cent growth on the previous Rugby World Cup year in 2015.
Broadcasting revenue declined 20 per cent and match day revenue dropped 40 per cent as a result of shorted international programmes in a World Cup year.
This was offset by $20m in compensation from World Rugby as part of the tier one union funding model for the truncated Rugby Championship.
NZR also made $9m foreign exchange gains and announced seven per cent growth in sponsorship and licensing which contributed to 39 per cent of overall revenue.
In 2019 NZ Rugby invested $195m into rugby in New Zealand. International and domestic competitions, the players and teams, accounted for the largest share at just over three-quarters of that expenditure.
Nicol concluded by acknowledging the stress the global pandemic is having on all areas of rugby – from provincial unions to Super Rugby clubs and the grassroots game.
“We note the significant financial impact Covid-19 on your own organisations and wish to thank you for the spirit in which and partnership approach as we work to put rugby ahead of self-interest in these challenging times.
“As we look ahead with some hopeful anticipation in the second half of 2020 we also recognise the recovery and growth of rugby in New Zealand will be different.
“Change is inevitable and the rebuild will create and opportunity for us all to co-design a rugby system that is more sustainable and captures some of the insights from the Review of Rugby held earlier this year.
“We need to rebuild financial resilience and this will ensure we can all be part of the long term success of rugby in New Zealand.”
For 2019, NZR gave itself a mark of 73.5 out of 100 for the year. The low score was attributed to 20 marks missed for failing to reach the Rugby World Cup final.
Steve Hansen is (probably quite rightly) never going to let this one go. #allblacks #lionsrugbyhttps://t.co/oXwHosp3U0
— RugbyPass (@RugbyPass) April 30, 2020
NZR has, meanwhile, made three changes to its board.
Vastly experienced senior executive Jennifer Kerr and Left Field Live sports agency chief executive Bart Campbell were confirmed, while Pango Productions founder and East Coast rugby president Bailey Mackey was promoted. Former All Blacks captain Ian Kirkpatrick was also elected as patron.
Kerr becomes the second woman to be appointed to the NZR board, joining Dr Farah Palmer at the top table. Her presence still leaves rugby short of the government target of satisfying a minimum of 40 percent of each gender on National Sports Organisation boards.
NZR chairman Brent Impey said the new board were guiding NZR into uncharted waters in the wake of Covid-19 but stressed there was also a rare opportunity to rebuild and reshape rugby.
“We face significant challenges, but many are not new with continued demand for our players overseas, the need to stay relevant to young people and adapt to fast moving technologies,” Impey said.
“We now have an opportunity to take stock and I am confident that if the dedicated and passionate people involved in rugby commit to working together in 2020 and beyond, we have the ability to ensure our sport thrives into the future.”
Comments on RugbyPass
The game was a quarter final, not a semi final. Barrett will be here for 6 months, he is no one's replacement at 13. That mantle will most likely ultimately go to Jamie Osborne, though Garry Ringrose has at least 4 more years in him. The long term problem position (in the next 3 years) for Leinster is tighthead prop, though there are a couple of prospects at schools level.
21 Go to commentsSo much for all that hype surrounding the ‘revival’ of Aussie rugby. The Blues were without the likes of regular starters Perofeta, Sullivan, Christie etc… This was a capitulation of the highest order by Australia’s finest. Joe Schmidt definitely has his work cut out for him.
2 Go to commentsYes they can ignore Sotutu. Like Akira Ioane plays OK at Super level but gets lost in tests. Too many chances too many failures.
2 Go to commentsA wallaby front-row of Bell, Blake and Tupou…now that would be hefty
1 Go to comments“But with an exceptional pass accuracy rating “ Which apart from Roigard is not a feature of any of the other 9s in NZ. Kind of basic for a Black 9 dont.you. think? Yet we keep seeing FC and TJ being rated ahead of him? Weird if it’s seen as vital to get our backline beating in your face defences.
1 Go to commentsThanks BeeMc! Looks like many teams need extra time to settle from the quadrennial northern migration. I think generally the quality of the Rugby has held up. Fiji has been fantastic and fun to watch
13 Go to commentsLets compare apples with apples. Lyon sent weak team the week before, but nobody raised an eyebrow. Give the South African teams a few years to build their depth, then you will be moaning that the teams are too strong.
41 Go to commentsDid footballs agents also perform the scout role at some time? I’m surprised more high profile players haven’t taken up the occupation, great way to remain in the game and use all that experience without really requiring a lot of specific expertise?
1 Go to commentsSuper rugby is struggling but that has little to do with sabbaticals. 1. Too many teams from Aust and NZ - should be 3 and 4 respectively, add in 2 from Japan, 1 possibly 2 from Argentina. 2. Inconsistent and poor refereeing, admittedly not restricted to Super rugby. Only one team was reffed at the breakdown in Reds v H’Landers match. Scrum penalty awarded in Canes v Drua when No 8 had the ball in the open with little defence nearby - ideal opportunity to play advantage. Coming back to Reds match - same scrum situation but ref played advantage - Landers made 10 yards and were penalised at the breakdown when the ref should have returned to scrum penalty. 3. Marketing is weak and losing ground to AFL and NRL. Playing 2 days compared with 4. 4. Scheduling is unattractive to family attendance. Have any franchises heard of Sundays 2pm?
11 Go to commentsAbsolutely..all they need is a chance in yhe playoffs and I bet all the other teams will be nervous…THEY KNOW HOW TO WIN IM THE PLAYOFFS..
2 Go to commentsI really hope he comes back and helps out with some coaching.
1 Go to commentsI think we are all just hoping that the Olympic 7s doesn’t suffer the same sad fate as the last RWC with the officials ruining the spectacle.
1 Go to commentsPersonally, I’ve lost the will to even be bothered about the RFU, the structure, the participants. It’s all a sham. I now simply enjoy getting a group of friends together to go and watch a few games a year in different locations (including Europe, the championship, etc). I feel extremely sorry for the real fans of these clubs who are constantly ignored by the RFU and other administrators. I feel especially sorry for the fans of clubs in the Championship who have had considerable central funding stripped away and are then expected to just take whatever the RFU put to them. Its all a sham, especially if the failed clubs are allowed to return.
10 Go to commentsI’m guessing Carl Hayman would have preferred to have stayed in NZ with benefit of hindsight. Up north there is the expectation to play twice as many games with far less ‘player management’ protocols that Paul is now criticising. Less playing through concussions means longer, healthier, careers. Carter used as the eg here by Paul, his sabbatical allowed him to play until age 37. OK its not an exact science but there is far more expectations on players who sign for Top 14 or Engl Prem clubs to get value for the huge salaries. NZR get alot wrong but keeping their best players in NZ rugby is not one of them. SA clubs are virtually devoid of their top players now, no thanks. They cant threaten the big teams in the Champions Cup, the squads have little depth. Cant see Canes/Chiefs struggling. Super has been great this year, fantastic high skill matches. Drua a fantastic addition and Jaguares will add another quality team eventually. Aus teams performing strongly and no doubt will benefit with the incentive of a Lions tour and a home RWC. Let Jordie enjoy his time with Leinster, it will allow the opportunity for another player to emerge at Canes in his absence.
11 Go to commentsLove that man, his way to despise angry little men is so funny ! 😂
4 Go to comments“South African franchises would be powerhouses if we had all our overseas based players back in situ. We would have the same unbeatable aura the Toulouses, Leinsters or Saracens of this world have had over the last decade or so.” Proof that Jake white does not understand the economics of the game in SA. Players earning abroad are not going to simply come back and represent the bulls. But they might if they have a springbok contract.
25 Go to commentsA lot of fans just joined in for the fun of it! We all admire O'Gara and what he has done for La Rochelle
4 Go to commentsThe RFU will find a way to mess this up as usual. My bet is there will be no promotion into the the Premiership, only relegation into National League One. Hopefully they won’t parachute failed clubs into the league at the expense of clubs who have battled for promotion.
10 Go to commentsWell that’s the contracts for RG and Jordie bought and paid for. Now, what are the chances we can persuade Antoine to hop over with all the extra dosh we’ll have from living at the Aviva & Croke next season…??? 🤑🤑🤑
37 Go to commentsWow, that’s incredible. Great for rugby.
37 Go to comments