Triple treat cashes up ailing NZRU
BY MARC HINTON IN LONDON
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New Zealand's sagging rugby coffers are set to gain a $7 million windfall from the still soaring global popularity of the All Blacks.
But even the biggest revenue return ever generated from an All Blacks tour will not be enough to prevent the New Zealand Rugby Union posting a loss this financial year – a situation that chief executive Steve Tew admits puts him a tough position.
He would love to lighten the load on the All Blacks and not ask them to undertake ventures like the current six-week tour that started in Tokyo and ends in London.
For the first time on a tour of this nature, the All Blacks effectively have three revenue-generating internationals (Tokyo, Cardiff and the Barbarians match in London), on top of the three IRB-mandated fixtures from which the NZRU earns not a brass razoo.
It is understood Tokyo wasn't quite the money-spinner that had been hoped, but still the NZRU's slice of the pie came in at well over $1m. Add in $2m-plus returns for each of the Cardiff and Twickenham (Barbarians) extravaganzas and the final profit should be around $6.8m.
Tew wouldn't confirm likely figures for commercial sensitivity issues, but admitted it would be enough to pay a pretty decent slice of the All Blacks' wage bill for the year, and would certainly fund the entire community rugby programme.
"It will pay a lot of bills," said Tew in London yesterday. "We can bank from one game here significantly more than from a full Eden Park. And they're extra games, so we're not taking matches away from fans."
That's a significant return. Especially if you consider that the NZRU is getting only a slice of the pie from its three revenue-sharers up here, yet it keeps everything from its home tests.
"It's critical," added Tew.
"We're facing the same challenges every year: how many games can we afford to play before we compromise the performance of the team, or the uniqueness of the All Blacks, versus how much do we leave the asset unexploited and not produce enough money to pop in the coffers and run our community programmes and retain our players and competitions?"
The NZRU boss confirmed the revenue-generating add-on fixtures were here to stay. Especially under the current IRB model that sees a union like Italy able to fill the San Siro Stadium on the back of the All Blacks' popularity, thus generating an estimated $10 million-plus in income, then not have to share any of it with the visitors.
"Unless we're miraculously able to change the commercial model where we fill their 80,000-seat stadiums and receive nothing in return, then host teams who have historically not been that good in our 30,000 to 40,000-seat stadiums, then we're going to have to continue to have some additional games.
"But we're constantly battling with the balancing act of playing too many versus not playing enough.
"This is a long tour for the guys."
Tew has been speaking to unions about those very fixtures on this trip, as well as to some potential new commercial partners.
He said the union was "down the track" in putting in place commercial arrangements for additional fixtures in 2010 but added: "We will be trying quite hard not to have a six-week tour, but we'll see."
Tew said the Asian Bledisloe Cup also remained on the table, despite Australian union boss John O'Neill raising the prospect of the Springboks coming into the equation for next year.
"The most valuable property we have is this All Blacks team," added Tew. "When it plays it generates a considerable profit, which we can then redistribute to other elements of the game."
Meanwhile, Tew confirmed that an IRB council meeting following next weekend's French test in Marseille would decide on a proposed rule change that would see eligibility rules relaxed for players who had represented tier-one nations and wanted to become available for the likes of Fiji, Samoa and Tonga.
"We are supporting it again," said Tew. "But it's not clear cut. There's a risk-averse approach taken by unions in this part of the world."
If the rule change was passed it would allow Pacific Islanders who had played for the All Blacks or Wallabies to represent their island nations after a designated stand-down period.
- © Fairfax NZ News
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'The most valuable property we have is this All Blacks team'. Well the way the NZRU are going, this team is going to be less and less valuable. I think it is incredibly sad that they have completely reversed the priorities in NZ rugby. All Blacks No 1, Super 14 No 2 and NPC a very distant third.
Obviously, there are a number of issues in this story.
The most important is the money issue. It is easy to be paranoid and say that the IRB is destroying the power of NZ Rugby by commercial means, having failed by rule changes over the last 30 years.
However, the response of the NRU suggests that they do not understand marketing and the value of the Brand - it appears they only play lip service to the brand. From a marketing, and money generating point of view, less is more! The attendance problems of the Super 14 clearly show that there is a saturation point other than games against the Big players, (NZ, SA, Aus, Eng, Sco, Wales & Fra).
Clever programmes against the historical foes, (whether in NZ or OS, will generate profit against income which only contributes to costs. I do not see the NZRU having both an understanding of this accounting nuance and the marketing power of the label.
Of course the NRU in its arrogance will not listen to those of us who have supported them for 50 yrs - I remember my father taking me to see Colon Meads and Ian Kirkpatrick and his famous side line run. This iconic history needs to be used to build the modern allegiance, not just attendance or treated as history.
On a contencious issue it is false to use one off players like Lomu to build the game. The special All Blacks earned their place in our hearts by their deeds not by publicity! As an example I would argue that Jeff Wilson's performance in S.A. is/was more fundamental to the All Blacks history than anything that Lomu achieved - we must remember that the worlds best team has only ever won the world cup once and that Lomu was never part of that.
I hope I am wrong and that the AB's win in 2012.
cheers Alisrer
Yeah they may have not made a profit this year, but they would have made more then enough in the years before and should stop acting like there is no money in the coffers.
Maybe if the planners for the game in Tokyo hadn't tried to gouge the fans so much they would've ended up with a full house! NZ$250+ seats for anything not directly behind the sticks might have seemed like a good way to make some quick cash, but it certainly kept me & others I know from attending..
How can there be a loss....i think management is getting paid too much......what have they done lately?If clubs cant make a profit they should merge with others.....pride and tradition don't pay the bills
Rugby as are all pro sports is entertainment and as in most pro entertainment your drawing power determines your fee i.e. how much you make for all stake holders. It is archaic in the extreme that the ABs are saddled by this model and i question how the IRB would go if the ABs as their marquee team refused to work under those conditions. Games like Tokyo should morally not be a 50-50 split although god knows who would make the decision on who's worth what and a compromise in the other fixtures such as the first 50% of revenue goes to the host and then the rest be split somehow would be a fairer way of doing things.
Think on this ; Tiger Woods still picks up his appearance fee when playing in Australia or wherever and it's way more than anyone else - reflecting his playing and thus commercial power. Cheers, Ross
Yes Yes Yes the All whites...Yes Yes dark cloud of rugby..
This is reality of professional rugby. Good to see Steve Tew of the NZRFU being more up front about finances. NZ suffers because of its small population, small stadiums, growing competition for the entertainment dollar and low per capita income. There is a limit to how much one can charge for a rugby match in New Zealand as its customer base is across all socio-economic groups. Tew is right the All Blacks is the major earner and the tours like the end of year one are required. I am sure the players enjoy the experience as it allows them a good income and as individuals enhance their international recognition. Once again good to see the NZRFU being on the front foot.
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What do you think of on-selling event tickets?
Jon #2 - yes,yes....gloat while you can but when the wheels fall off and the All Whites are on the early flight home next year, we will see where the dark clouds gather..... Where is NZ ranked in the world ? Are any quality teams going to come and play in NZ after the WC ? Let me answer - ranked in the 60's I believe and good quality teams will not show as they can't be given the competition they need ( maybe they could send their 2nd or 3rd ranked team to keep the faith) Yes Jon gloat now.... but why aren't you posting on a football site ? you obviously don't like rugby, so as far as I'm concerned you have got nothing to offer our great game.