Rugby review

Analysis

Converting opportunities

State of the Unions: Deloitte sports review

Rugby is a community game and, at its heart, everything rugby unions and clubs do relate to people. The importance of meaningful interactions with the community is vital to the viability of the nation’s favourite game.

A financial review of the country’s leading rugby unions reveals that a continual improvement of financial results has put the unions in position to increase their investment back into the grassroots of the game.

Welcome to the 7th edition of the Deloitte Sports Review, a review of the 14 semi-professional and amateur rugby unions competing in New Zealand’s premier provincial rugby competition: the Mitre 10 Cup.

Deloitte’s review of the annual accounts of the 14 Mitre 10 Cup unions finds that the unions’ administrators have built on the foundation, set in FY16, to improve the financial health of the game in New Zealand. The 2017 season result is a stand-out performance with a record setting collective surplus.

A key driver of the result in FY17 was the positive effect that the British & Irish Lions tour had on New Zealand Rugby (NZR). The tour sparked a significant increase in commercial revenue and match day takings. This has allowed NZR to filter a similar volume of funds, as in FY16, to the Mitre 10 Cup and Heartland unions in order to continue to improve the game at the community level. The test match fees received by the Auckland Rugby Union for hosting two of the All Black tests against the Lions at Eden Park bolstered the collective surplus for the Mitre 10 Cup unions to surpass the surplus set in FY16.

Looking forward to FY18, the unions need to be even more vigilant with their spending, as no new major sources of revenue are expected during the period. Revenue levels are expected to remain relatively constant in FY18 compared to FY17 with the only exception being Auckland whose revenue is expected to return to a level similar to FY16. 

Union administrators face a choice: curtail expenditure to further build their financial position or use their already favourable position to invest in the grassroots and further engage with their communities.

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