NZ Rugby League chases World Cup profit share
Concerned by its precarious financial situation, the New Zealand Rugby League is looking to force the game's international board to pay for the Kiwis to play in future World Cup tournaments.
The organisation wants to follow the lead of the All Blacks who successfully forced the International Rugby Board to pay New Zealand Rugby an appearance fee at world cups, saying it is the only way to end a boom and bust cycle which is threatening its long-term financial health.
Although the Kiwis are not the All Blacks in terms of mana within the game, the NZRL believes the world cup would be a meaningless tournament if New Zealand does not play in it.
The organisation has written a draft agreement for the 2017 World Cup, to be hosted by New Zealand and Australia, demanding a profit share.
The proposal has yet to be placed in front of the Rugby League International Federation but the impetus for change has intensified after the the NZRL recorded a $1.2 million loss which left it more than $200,000 in the red for the last financial year.
Unless international powerbrokers agree to a profit share agreement the organisation looks to be stuck, for perpetuity, in a cycle where it builds reserves over three years and then spends them all in a world cup year.
It had stashed away $950,000 in reserves for the World Cup last year but spent all of that and then blew the budget by a further $200,000 because of higher than expected costs during the tournament in England, a lower than expected gate taking from last year's Anzac test in Canberra, and $90,000 required to prop up the women's world cup campaign.
The organisation has had to take out a $250,000 bank loan to cover themselves for the next six months and auditors BDO Auckland said there were concerns about the ability of the NZRL to continue as a going concern.
The organisation needs to build up $1.5 million in reserves over the next three-and-a-half years in order to fund the 2017 World Cup. It makes between $600,000 to $800,000 from a Four Nations tournament but in a world cup year it cannot generate more money because there are no international fixtures.
NZRL chief executive Phil Holden said the international federation had a "commercial stranglehold" over the NZRL.
He said the two other big players in international rugby league - Australia and England - did not have the same problems. The ARL is a $200m a year business, the UK about $100m. By comparison, the NZRL generates around $8m a year.
"We are a prince on the field and a pauper off it," Holden said.
Holden said the Kiwis were the biggest income earner for the NZRL.
"When we participate in a world cup year we don't have that commercial earn. We give all those rights up to the international federation, they keep all the money - the broadcast money, the gate takings - they keep it all.
"That means for us - and our situation is very particular to us - that we need to build up cash reserves in the years leading up to the World Cup so when the world cup year comes along, we spend it all to fund our organisation."
Holden said the All Blacks had fought against similar obstacles for many years, "but we can't wait 30 years to resolve our issue".
"We are not a big cash rich organisation so to build those reserves means we have to be careful where we spend what money we do have. Effectively it's a stranglehold on the organisation to really move ahead because it becomes bloody difficult to build the money."
Holden said the organisation and the ARL had devised a draft hosting agreement for the 2017 World Cup where they had asked for a profit share.
"We want some form of compensation coming back to both Australia and New Zealand, provided we deliver on some targets."
Holden said he had spoken to ARL representatives and they were supportive of the move. He expected to get the backing from other countries.
"We are number two in the world, we have been number one in the world, we could be number one again and we have aspirations to do that. We have got an obligation to pursue this as aggressively as we can."
Holden said there had been no discussions with the international federation.
"For the credibility of international football we are really, really important and we know that. We just want that value recognised.
"I'm concerned about the reality of our situation, that will keep me awake at night. I'm optimistic in terms of the way we are approaching things . . . that we will work our way through that."
Sunday Star Times