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New Zealand Rugby hit by year of World Cup triumph

New Zealand Rugby, the governing body of rugby union in the country, has revealed today (Wednesday) that it posted a loss of NZ$463,000 (€276,000/$306,000) during 2015, while the organisation’s chief executive Steve Tew has outlined plans to drive through a new structure for the global rugby season.

Despite seeing its All Blacks team win a second successive World Cup last November, NZR still recorded a loss. The body confirmed however that the deficit was much lower than the NZ$955,000 which it had budgeted for.

NZR said it generated revenues of NZ$133.7m in 2015 and had invested NZ$134.3m in the game, up from NZ$120.2m the previous year. They also retained cash reserves of NZ$59.1m. Last year, NZR posted a financial surplus for the third year in a row after turnover in 2014 increased by NZ$4m to NZ$120.8m. The governing body generated a profit of NZ$373,000 in 2014.

Due to it being a World Cup year, fewer Test matches – a strong source of income for NZR – were played during 2015. Tew added that this significantly affected the body’s commercial revenue stream. “There were no revenue-share Tests,” he said. “Consequently Test match revenue was NZ$12m lower than in 2014. We also started the year off on the back foot with the financial loss recorded by the 2015 Wellington Sevens tournament.

“While we received significant compensation from (global governing body) World Rugby for the lost Test match revenue, this does not fully offset the loss of potential commercial revenue in a normal year. For example some sponsors pay less as they’re not able to leverage their partnerships to the same degree with fewer Tests in a Rugby World Cup year.

“Having said that, it was very pleasing to record a revenue of NZ$133.7m, up from NZ$120.8m in 2014. This reflected the World Rugby compensation, new sponsorship agreements, along with World Cup-related licensing income and bonuses.”

Tew added that, although significant losses are forecasted for 2016 due to the increase in funding for provincial unions, the next five years should see NZR remain in a healthy financial state.

Meanwhile, Tew has spoken of his desire to reach an agreement with World Rugby over the future of the global game as the body enters into a new era. Bill Beaumont, chairman of the Rugby Football Union, English rugby union’s governing body, is set to succeed Bernard Lapasset as the head of World Rugby. NZR seconded the nomination of Beaumont after World Rugby confirmed the former England captain's bid earlier this week, and Tew hopes the changing of the guard will bring about a change in the current system, which he feels is unsustainable.

There are currently no Tour programmes in place for after the next World Cup in Japan in 2019. NZR has confirmed to World Rugby that it will not accept a default position and Tew has called for a structural overhaul.

“There’s plenty of work being done,” Tew said. “Are we closer to an agreement? Probably not but at least the discussions are very current. We don’t believe the current system is sustainable. Our players and the northern hemisphere players won’t sustain that and I think it’s fair to say the French and English clubs don’t think it is sustainable either.

“We need a different season structure than the one we have now and we are not going to default to the current one if we can’t find one. We’re going to force that issue.”