'Decline expected': Hefty financial losses as NZR releases 'state of the union' report

By NZ Herald

New Zealand Rugby has reported a $17 million loss in the 2018 financial year, after its $30m profit the year before, despite recording its second-highest annual revenues of $190m.

Deloitte said in its annual "state of the unions" report, which also tracks the off-field financial performance of the provincial unions, that a decline was "always to be expected" following the British and Irish Lions tour in 2017.

Deloitte said New Zealand Rugby still had a strong financial position to build upon in the upcoming years, with net assets standing at $104m.

New Zealand's five Super Rugby clubs do not publish their financial results, but Deloitte said "anecdotal evidence" suggested they were facing financial pressure with "decreasing gate attendances being well publicised, as well as being observable from game footage".

Deloitte said Super Rugby club shareholders, which include NZ Rugby and provincial rugby clubs, "do need to carefully consider how they invest future resources for the benefit of the Super Rugby clubs given they provide a massive opportunity and pathways for professional players into All Black teams".

Provincial rugby union clubs ran up a solid $1.2m surplus in the 2018 financial year after their knock-out $3.8m profit the previous year, Deloitte said.

Other highlights from the State of the Unions report:

· For the fifth year, the report looked at the financial performance of the Heartland Championship unions. They continued their trend of surpluses, posting a collective surplus of $410,000 for FY18, slightly down from FY17's collective surplus of $473,000.

· New Zealand Rugby (NZR) reported a net loss for FY18 of $17.3 million, a decrease from their FY17 surplus of $29.9 million. However, their $189.5 million in revenue posted in FY18 was the second largest revenue they have ever reported. These results come after the significant effect that the British and Irish Lions tour had on NZR's financials in FY17.

· For the Mitre 10 Cup unions, the number of player registrations grew collectively by 1,145 (0.9 percent) to reach total player numbers of 132,895. The greatest increase in player numbers was in the senior grades with registrations increasing by over 2,000, an increase of 10.0 percent from 2017 that has restored playing numbers in this grade to 2012 levels. There was growth in both male (8.7 percent increase to 21,504) and female (28.1 percent increase to 1,832) player registrations in this age group.

· Social media continues to develop as a key channel for unions to engage with their supporters. Combined Facebook followers increased 3.6 percent to 520,604, Twitter followers grew by 4.2 percent and Instagram saw the greatest increase in both actual numbers and percentage terms as the unions' collective followers grew by 41,165 (38.3 percent) over the year.

· Continuing to increase the focus on diversity and inclusion is important for the unions going forward. It should be a critical focus for any organisation seeking to survive in the 21st century, but particularly for an organisation that canvasses as diverse a range of ages, regions and backgrounds as rugby does. Attracting a more diverse employee, volunteer and player base, particularly in leadership, management or governance roles, will help rugby unions better understand, predict and support an increasingly diverse group of sponsors and fans.

This article was first published on nzherald.co.nz and was republished again with permission.

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