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
We’re building a bridge but can't agree where the river is.
2 Go to commentsfirst no arms shoulder or helmet tackle into his rib cage is going to be so very painful even to watch. go back to RU mate.
1 Go to commentsBulls by 5. Plus another 50.
3 Go to commentsJohan Goosen avatar. Cute. Surely someone at RP knows how to do a google image search?
3 Go to commentsCan’t these games play a little earlier? Asking for a friend.
3 Go to commentsIt’s impressive that we can see huge stadiums with attendance in the 40 000 to 50 000 region. It shows how popular this competition is becoming. What is even more impressive is the massive growth in broadcast viewership. The URC is one of the two best leagues in the World, the other being the Top14.
7 Go to commentsChristie is not Sottish, like the majority of the Scotland team.
2 Go to commentsHold the phone, decline over-rated. Is it a one game, dead cat bounce or the real thing? Has the Penney dropped? Stay tuned.
45 Go to commentsTotally deserved win for the Crusaders Far smarter than the Chiefs who seem to be avoiding the basics when it matters Hotham showed them what was missing and Hannah seems a real find - a tad light but that can be fixed over time
8 Go to commentsGreat insight into the performance culture with Sarries and I predict Christie will be a fixture in the Scotland team now for some time to come. However, he is slightly missing his own point around Scotland “being soft” when he cites physicality examples in defence of that slight. The issue is much closer to the example he referenced around feeling off before a game but being told “it doesn’t matter, you can still play well” by Farrell. Until Scotland can get their psyche in that square, they will carry on folding under extreme pressure…
2 Go to comments> We are having to adapt, evolve and innovate more than when we were in Super Rugby where there was only really one style that everybody had to play to gain the most success. Have = able to? Interesting what that one style might be? I thought SA sides still had bad tours now, or at least bad schedule, months away? Those extra few hours flights have to be a killer though, no surprise to see their sides doing so badly at the start of the season each year. I wouldn’t enjoy that unfairness as a supporter.
7 Go to commentsThe problem for NZ, and Aus, is they ripped up the SR model and lost a massive chunk of revenue that hasn’t been replaced. Don’t forget SA clubs went North because they were left with no choice, Argy unceremoniously binned and Japan cast adrift. Now SR wasn’t perfect, far from it, but they’ve jumped into something without an effective plan, so far, to replace what they’ve lost. The biggest revenue potential now lies in Japan but it won’t be easy or quick to unlock, they are incredibly insular in culture as a nation. In the meantime, there is a serious time bomb sitting under SH rugby and if it happens then the current financial challenges will look like a picnic. IF the Boks follow their provincial teams and head north then it’s revenue meltdown. Not guaranteed to happen but the status quo is a very odd hybrid, with the Boks pointing one way and the clubs pointing the other way. And for as long as that remains then the threat is real.
45 Go to commentsI think Etene has had some good tuition, likely while at the Warriors to be a professional that helped his rugby jump, but he was certainly thrown in the deep end way too early. Should have arguably 20 less SR caps, and therefor a way better record that he does at his age, but his development would have been fast tracked by the need to satiate his signing away from league. Again, credit to him and others that he has done it so well. Easy to fall over under that pressure in the big leagues like that but he kept at it when I myself wasn’t sure he was good enough.
1 Go to commentsAwesome story. I wonder what a bigger American (SA) scene might have mean for Brex.
1 Go to comments“Johnny McNicholl and the Crusaders” save a Penney. Who has been in camp this week and showed them how to play?
8 Go to commentsSo, reports of the Crusaders’ demise / terminal decline are perhaps just - slightly - premature/exaggerated…? 🤔 Will we see a deep-dive into that by the estimable Rugbypass scribes, and maybe one or two mea culpas? Thought not.
8 Go to comments1. The Chiefs are rudderless without DMac, which enhances his AB chances 2. Chiefs pack are powderpuffs. The hard men arent there anymore 3. They had their golden title chance last yr and wont threaten this yr. Gone in second round of playoffs.
8 Go to commentsHonestly, why did you have to publish such a foolish article the day they play us? 😂
45 Go to comments> They are not standalone entities. They are linked to an amateur association which holds the FFR licence that allows the professional side to compete in the league. That’s a great rule. This looks like the chicken or egg professional scenario. How long is it going to be before the club can break even (if that is even a thing in French rugby)? If the locals aren’t into well it would be good to se them drop to amateur level (is it that far?). Hope they can reset from this level and be more practical, there will be a time when they can rebuild (if France has there setup right).
1 Go to commentsWhat about changing the ball? To something heavier and more pointed that bounces unpredictably. Not this almost round football used these days.
35 Go to comments