ABs drive NZRU towards $3m profit

The financial squeeze may be on, but the New Zealand Rugby Union is still forecasting a $3 million profit for the year, largely thanks to the big-money generating games the All Blacks are soon to play in Hong Kong and at Twickenham.

NZRU chairman Jock Hobbs confirmed the likely profit figure after Friday's NZRU board meeting in Wellington, though both he and chief executive Steve Tew refused to divulge details of revenue from these additional matches staged over and above the IRB schedule.

But it wasn't difficult to work out their approximate value, with the NZRU's top men confirming that without these tests there would not even be a profit to contemplate.

Hobbs also said the NZRU were looking at a budget deficit of $1.5 million for 2009, with World Cup writeoffs biting into the bottom-line, as well as an expected general economic tightening caused by the global crisis.

Asked if the NZRU would have faced a loss situation without these revenue-sharing matches at Hong Kong and Twickenham, Hobbs said: "Possibly. It depends on the surplus which could yet be more than $3 million.

"We can't give figures because they're commercially sensitive and confidential, but it's fair to say the test in Hong Kong is making a reasonably significant contribution to our revenue for the year."

Tew said the Twickenham match was being played for a fixed fee - thought to be worth a little over $1 million for the NZRU - and the Hong Kong test, which was a sellout, was a joint "risk and reward" venture between New Zealand, Australia and the hosts.

"If we don't have those two games on the calendar and the income from them we may well have had to revisit some of our activity for the year," added Tew.

Said Hobbs: "These two games are important in terms of contributing to our revenue streams and, in this instance, to our surplus. But this money will go into our reserves which will be invested back into the game. We're not adding these games for the sake of adding them."

Or as Tew so eloquently put it, "we wouldn't want to overcook the golden goose", meaning they are well aware of the delicate balancing act going on by growing both the All Blacks' schedule and the countries they are appearing in.

Tew said the proposed 2009 match between the All Blacks and Australia in Denver remained a "work in progress" but was closer to being a reality that another mooted fixture between the New Zealanders and Ireland in Boston.

The CEO said the NZRU were "well down the path" in terms of additional revenue-generating matches in 2009, though declined to nominate how many were being looked at other than to say "you could be looking at a minimum of two".

"The revenue we can generate from playing additional matches outside of the IRB schedule is very significant ... and very important in terms of what we can afford to do in player retention," added Tew rather pointedly.

The top NZRU officials also pointed out that by taking the All Blacks into international markets such as Hong Kong and possibly Denver they were helping rugby's cause in getting the tick of approval as an Olympic sport, with a  decision due on that next year.

Tew also reported that no solution had yet been reached over either the format for the "top six playoffs" for next year's Super 14, or the mooted expansion for 2010.

The three Sanzar nations remain at odds over the makeup of next year's expanded playoffs - the Kiwis believe a top six is precisely that, but the South Africans want a more complex arrangement that would guarantee their region a presence. They are hoping to come to agreement (a must under the collective agreement) over the next few weeks.

"We believe a top six is a top six, but South Africa would like to bring forward the concept of conferences, which is what we're talking about for the next phase of expansion, so the competition is scored in conferences that don't actually exist.

"We don't agree, and that's why we have an impasse," said Tew.

Tew said the aim was to have the three conference system up and running by 2010, but admitted there was still a lot of work to be done in a lot of areas before that was a reality.

In terms of the situation of Northland and Tasman meeting the criteria needed to gain their stay of execution from the Air NZ Cup, Tew said D-day was fast approaching.

"There are some positive things happening, but both are still facing some pretty serious challenges, and they've got to meet those challenges by the end of this month to make the cut."

Tew continued his tough-talking stance over a potential talent war with Australia fuelled by the Daniel Braid signing and suggestions that Australian sides are about to target young Kiwi players in a big way.

"We don't think it's helpful for Australia and New Zealand to be actively competing for players in our own markets," said the NZRU chief. "Having said that we're keeping a very close watch on New Zealand-eligible talent on the eastern seaboard of Australia."

Told Australia was about to target young Kiwi talent, Tew replied: "That could very well be a two-front war... we've mentioned to Australia that our war chest is a bit deeper than theirs."

But Tew also shrugged off a suggestion the Sanzar relationship was strained, adding: "I would say we're working as well together as we ever have." South Africa only last week reaffirmed their commitment to the venture.

 The NZRU bosses also confirmed they had tabled interest from Hawke's Bay in becoming a Super 14 base union. Hobbs said in the current environment "it's certainly not favoured".

Tew also hinted strongly that it would only be an additional team in New Zealand under an expanded Super rugby setup that would drive any change to the current boundaries.

They also said they had assurances from France their touring team next year would be up to strength, despite the clash with the domestic final, and there was a November 11 London meeting scheduled for CEOs and chairmen of the top 10 countries to discuss the thorny issue of the "integrated" international season.

 

- © Fairfax NZ News