New Zealand Rugby (NZR) has posted a loss of NZ$1.9m (€1.13m/$1.27m) for its 2018 financial year and has conceded that it faces challenges ahead with a total deficit of NZ$30m projected over the next five years.
Waikato Rugby Union chairman Colin Groves highlighted this projection at NZR’s annual general meeting, but NZR chief executive Steve Tew said plans are in place to meet this challenge. “We prepare long-term financial projections which we share with the provincial unions on a regular basis and if nothing changes we will have a deficit over that period, but as we’ve shown in the last 10 years we’ve worked very hard to fill those gaps,” he said, according to the Stuff.co.nz website.
“Part of it is driven by foreign exchange gains. When we signed AIG and Adidas (sponsorship deals) and some of the broadcasting contracts we were able to secure some long-term foreign exchange positions, which have been very beneficial.
“We’ve been spending that income, but that income is not going to be repeated because the dollar is in a different position and the next time we sign long-term contracts we may not get those gains. That’s money we have to replace or stop spending.”
NZR’s 2017 annual financial results showed a profit of NZ$33.4m, but the organisation was keen to point out that these figures were inflated by the impact of the British and Irish Lions tour to New Zealand. Indeed, the NZ$1.9m loss for 2018 came after an initial forecasted loss of NZ$3.3m.
NZR registered income of NZ$189m in 2019. This compared to NZ$257m from the Lions tour year, but was up 17 per cent from 2016’s mark. “Although we are pleased with our latest financial result these are still challenging times for rugby as we look further ahead,” NZR chair Brent Impey said, according to the New Zealand Herald newspaper.
“The pressure to retain our talent and support the growth in our community game puts pressure on our long-term financial projections. Agility and pace are now mantras for us as leaders of the game. NZR can and must show leadership, but we need our stakeholders as partners. None of us have all the answers.
“In this world, new cultures of co-operation, sharing of information, being open to new structures, and being prepared to question the status quo must be our new norm.”
Earlier this month, Rugby Australia reported a net profit of AUD$5.2m (€3.29m/$3.7m) in 2018, but warned it will operate at a loss in 2019 due to the Rugby World Cup.