Unions converting financial goals with a surplus

20:34, Aug 07 2014
Taranaki vs Auckland
RISE ABOVE: Auckland and Taranaki played a pre-NPC game in Tikorangi yesterday. Auckland has been revealed as the best performing NZ union on the financial front.

New Zealand's rugby unions have "side-stepped" their past financial challenges, producing their second combined surplus in at least six years.

The State of the Unions report by consulting firm Deloitte annually measures the financial performance of the 14 semi-professional unions which are part of the ITM Cup.

The report shows that the unions made $3.2 million in 2013, up $500,000 from the previous year, despite revenue being nearly 10 per cent lower than in 2009.

Deloitte partner Grant Jarrold said it was a solid turnaround for the unions and appeared that financial prudence and governance were much improved.

It was also encouraging to see that grassroots rugby had received more than $20m in 2013, an increase of $1.2m on the previous year.

However, he urged unions to not forget their past struggles and let their "exceptional" surplus take their eye off the ball.

Unions had to continue to fight for local support and prudently manage their key costs, including administration costs and player payments.

Revenue in 2013 was $69.1m, up 3.2 per cent on the previous year.

Grants and sponsorship money continued to account for two-thirds of the revenue via contributions from New Zealand Rugby and gaming trusts.

Operating costs dropped marginally to $65.7 million, which was down $15.7m or nearly 20 per cent lower than 2009.

Just over 47 per cent of expenses was on team or match-related costs, with 32 per cent on promotion and 21 per cent on administration.

All unions achieved surpluses but only Canterbury did not improve on its previous year's bottom line.

Auckland was the top revenue earner ($9.4 million) followed by Canterbury ($8.9 million), Wellington ($7.9 million) and Waikato ($5.5 million).

Half the revenue was generated by the five provincial unions with professional Investec Super Rugby teams based in their main cities, with the exception of Otago, which escaped liquidation by a council bailout in 2011.

Since then, Otago has made an "impressive turnaround" in equity, from a negative position of $2.2m to a positive $500,000.

Key points:

● Just under 16 per cent of revenue was match-related, growing by 13.9 per cent

● Two thirds of revenue was from grants or sponsorship, up $0.5 million to $46.1 million over the year