LONG READ ‘Hurricanes may end up champions, but they might be the symbol of why Super Rugby needs a radical overhaul’

The Hurricanes look to be on track to win a second Super Rugby title, 10 years after their only other success.

At the other end of the table, Moana Pasifika look destined to finish last and probably, unless a new investor can be found in the next few weeks, close their doors when the campaign finishes.

But interestingly, while these two clubs sit at opposite ends of the Super Rugby Pacific table, what binds them is that they have respectively been the two worst financial performers over the last three years.

Moana, without a regular home base, have struggled to generate gate revenue, sell merchandise or win many high-value sponsorships.

Without money, they haven’t been able to attract or retain key players and win more than a handful of games, and it’s no surprise that current owner, Pasifika Medical Association, has raised the white flag and said it can’t continue to fund the club past this season.

Moana have felt the cost of failure, while the Hurricanes are feeling the cost of chasing success. The club has lost an accumulated $4m or thereabouts over the last three years and would have been in desperate financial trouble had local property developer Malcolm Gillies and investment partner Summit Capital not bought a 50 per cent stake in the club late last year to recapitalise it.

Three factors have influenced the Hurricanes’ financial woes. The club shifted to a better but more expensive training base in 2024.

The average crowd in Wellington has dropped from 16,000 to 12,000 post-Covid (primarily because the current government has culled thousands of civil servant jobs in the capital and damaged the local economy).

Thirdly, head coach Clark Laidlaw laid out a three-year recruitment and retention plan when he came into the job in 2024.

There are no figures to confirm this, but there is an assumption that the Hurricanes, as they are entitled to, have used their own money to top up the salaries of some players to firstly sign them and secondly to keep them.

It is all so precarious – running up debts to build and keep a squad that can finish high enough up the table to secure the all-important home play-off rights.

“We’ve definitely had our eye to that around recruitment and retention,” Laidlaw told the NZ Herald. “There’s been a lot of work and thought put into trying to prepare a team over two or three years and trying to get to this point where performances are reasonably consistent.

“The difference between our good and bad feels a lot different than it did individually and collectively, which is very helpful.”

If the Hurricanes, who top the table by two points with four rounds left, can go on to host a semi-final and final this year, they will likely make a profit (selling out their stadium for the final will net them around $1m), and their retention strategy will have paid off.

It is all so precarious, though – running up debts to build and keep a squad that can finish high enough up the table to secure the all-important home play-off rights.

This, however, is the financial model under which New Zealand’s clubs operate. They don’t have access to the competition’s broadcast revenue – NZR negotiates and keeps that – and in return, uses a portion of it to pay Super Rugby salaries.

Clubs have a nominal $4.5 million salary cap to each contract 38 players, and the maximum they can pay any individual is $195,000.

NZR has the budget to top up the salaries of around 40-50 players it deems critical to the All Blacks, and it is often said – by the other four New Zealand clubs – that the national body has subsidised the Crusaders’ success over the last two decades.

It’s easier to keep good players and build an experienced squad with depth in most positions when NZR is chipping in with anything from $300,000 to $800,000 per year, per All Black. Clubs can use their own money to also bolster individual pay packets, but they don’t tend to have much spare capacity.

They can sell sponsorships, merchandise and keep their gate revenue, but all of them say they are overly reliant on the latter to make money. With just seven regular-season home games, hosting additional play-off fixtures is the only way clubs say they can finish each season in the black.

The fact that clubs at each end of the table are in, or have been in, deep financial trouble illustrates both the lack of financial horsepower in Super Rugby generally and the flawed ownership model in New Zealand specifically.

If it stays the way it is now, I fear for it. If there’s change, then I believe we’ve got a product. But if it doesn’t, I believe it’s going to die.

Fans may not love getting into the weeds of the game’s economics, but when money becomes such a determining factor in who succeeds and who doesn’t, the problem can’t be ignored.

What makes the situation in New Zealand yet more difficult to brush off is that all five clubs are understood to have lost money last year – even Crusaders, the Super Rugby Pacific champions.

It’s not tenable for clubs to continually lose money and this is why NZR faces a huge decision about whether it’s ready to make a dramatic change to Super Rugby’s ownership structure.

“The whole system has to change,” Gillies told Rugby Direct in late April. “I don’t think it’s sustainable as it sits right now,” he said.

“If it stays the way it is now, I fear for it. If there’s change, then I believe we’ve got a product. But if it doesn’t, I believe it’s going to die. That’s my honest opinion.”

NZR has to challenge the fundamental premise of whether it needs to reverse the decision it made 30 years ago to own its players and Super Rugby clubs. That decision gave it the stress of paying all the bills, but the security of control over its talent.

For the first two decades at least, maybe longer, NZR felt like it had chosen the right path by keeping Super Rugby directly and wholly under its control.

There was no conflict between club and country, no ongoing battle to protect players from excessive workload or have them released for ad hoc All Blacks training camps, while NZR held some semblance of control against an inflationary cost base.

This was not the picture in England or France where privately-owned clubs were seemingly in a never-ending war with national unions and inflation ran rampant – to the extent various clubs went bust.

But in the last 10-12 years, NZR has been forced to shift from its original position of exclusively owning Super Rugby and enter a hybrid world where the five clubs are partially owned by private investors.

NZR, since 2012, has prioritised its national teams and has gradually increased its investment in the All Blacks, Black Ferns and other international entities such as the All Blacks XV.

The All Blacks are the commercial engine of the game, generating about 80 per cent of all NZR’s income, but the strategy of investing more in teams in black to generate higher returns that can then be spent on the lower tiers, has not worked, and NZR had to open the Super Rugby clubs to private investment out of economic necessity.

Now, it has an imperfect set-up where all five clubs have a degree of private ownership – the Highlanders are 87 per cent owned by high-net worth individuals – but only limited commercial rights, and virtually no decision-making power in any key matter such as the number of teams in the competition, where teams can be based, player eligibility or future strategic direction.

All these major matters – plus control of the broadcast rights – sit with the respective national unions of New Zealand and Australia. The private investors are losing money and have no means to run the competition the way they would like to, and something has to change or more clubs will go under, and Super Rugby could become too broken to fix.

Privatisation may open the way for NZ clubs to sign more foreign players. It could see the introduction of a player drafting system, of more afternoon kick-offs and in time, maybe cup competitions that involve the top Japanese clubs.

“If you want private investment in these Super clubs, you’ve got to give them something to invest in,” Gillies says. “From what I’ve seen, there’s not a lot there. My belief is it needs to be privatised. It cannot continue the way it is.”

Super Rugby is clearly now at a critical juncture, one where it seems NZR has no choice but to agree to some kind of critical change to rejuvenate the competition and drive greater commercial value from it.

It may have to cede a significant element of control to create the right environment for private investment to feel it can succeed, but all this is potentially good news for fans.

Privatisation may open the way for New Zealand clubs to sign more foreign players. It could see the introduction of a player drafting system, of more afternoon kick-offs and in time, maybe cup competitions that involve the top Japanese clubs.

The Hurricanes may well end the season as champions, but their bigger achievement this year might be serving as the symbol of why Super Rugby needs a radical overhaul.