Cash injection for provincial rugby unions

STEVE TEW: "The end-of year result is significantly better than the one we budgeted for."
STEVE TEW: "The end-of year result is significantly better than the one we budgeted for."

Provincial unions are set to get their hands on some of the cash AIG stumped up to sponsor the All Blacks.

New Zealand Rugby Union chief executive Steve Tew hinted the 26 provinces, many of which are expected to post losses again this year, may receive bigger grants from the central union, which brokered the AIG deal.

In October the NZRU announced a five-and-a-half- year sponsorship contract with the global insurance giant.

Yesterday Tew said that that financial certainty could result in his organisation dipping into its multimillion-dollar nest egg and sharing some of its wealth among its member unions to stem the bleeding in the provinces.

"It's timely to sit back and say: ‘right what is the cash balance the NZRU need'," he said.

"And then flowing on from that there will be a mid-term check for our provincial union funding regime."

When the the NZRU set up the current NPC structure they increased incentives for unions to boost player registrations and promised a mid-term check if the "world changed significantly".

That check will be completed after it has agreed terms on a new collective agreement with the New Zealand Rugby Players' Association. While Tew acknowledged the global economic outlook was far from bright, the AIG deal combined with the commercial arrangement in place with adidas, meant the NZRU's books were robust.

"I don't know if the world has changed that significantly but it remains very challenging for our provincial unions and we have certainly improved our position.

"We will take a deep breath once the collective is out of the way because that affects both how this organisation and the provinces will operate financially for the next three years anyway."

This will benefit the likes of the Canterbury Rugby Football Union, which posted an operating loss of $563,000 last year.

Although one of the wealthiest unions in the country Canterbury still depends on the NZRU's grants, which totalled almost $1.2 million last year.

CRFU boss Hamish Riach recently told The Press it was hopeful of posting a small profit for 2012.

Increased grants will also be welcomed by Heartland provinces such as Mid-Canterbury, which received about $260,000 this year.

The AIG and adidas contracts are denominated in foreign currency and hedged at what Tew stated were "pretty favourable rates".

"It is worth noting that the NZRU has a very significant percentage of their short-term income now contracted. So that gives us a lot more confidence than a lot of other organisations in the country," he said.

The AIG contract may also ensure the All Blacks play less test matches next year.

This year's third Bledisloe Cup test in Brisbane and the final match of their end-of-year tour against England was added onto the team's schedule to boost revenue.

Tew said the England match payout was its biggest ever from a single match but wouldn't comment on reports it was about $4 million.

All Blacks coach Steve Hansen and several players stated that the elongated seasons were getting tougher to endure and Tew said their views had been noted.

This had to be balanced against the need to rake in revenue.

"Now that we have locked in such a significant portion of our commercial revenue, we can make the decisions based more on what is best for the team rather than, necessarily, having to take the money into account."

The Press