Provincial rugby gets finances over gain line
Rugby’s future is looking a lot more viable after the country’s provincial rugby unions posted the strongest collective profit of the past decade.
But the unions should still keep an eye on their spending to make sure it helps grow rugby in the community, Deloitte partner Grant Jarrold says.
A Deloitte report found the country’s 14 semi-professional and amateur rugby unions had a combined surplus of $3.5 million in the 2016 financial year. This reversed 2015’s ‘‘substantial loss’’ of $1.4m, and was the highest surplus in a decade.
All 14 unions recorded surpluses, and 12 had performed better than in 2015, the report said.
Jarrold said the ‘‘material turnaround’’ in financial performance highlighted improvements by the country’s leading rugby unions.
‘‘The unions are now in a position to take advantage of their hard work to develop and implement refreshed game plans to secure a viable future for the nation’s favourite game,’’ Jarrold said.
‘‘As not-for-profit entities, the unions are not expected to record large surpluses, however given a significant increase in revenue in FY16 (financial year 2016), retaining the surpluses in this initial year makes them significantly more financially stable.’’
Total revenue for the rugby unions was up nearly 20 per cent to $78.2m, driven by large increases in grants and sponsorships.
The five provincial unions with Super Rugby franchises – Auckland, Waikato, Wellington, Canterbury, and Otago – accounted for nearly half of the revenue of all the unions.
At the same time, spending by the unions was up nearly 10 per cent to $73.4m.
This was across the three categories of spending Deloitte analysed, Jarrold said, including team and match-related costs, growing the game, and administration.
The increase in spending was, however, bettered by the increased income.
‘‘The positive takeaway is that the largest increase in expenditure, in both percentage and dollar terms, was in the growing the game category,’’ Jarrold said.
‘‘This reflects that increases in revenue was reinvested back into grassroots rugby.’’
The report found registration numbers overall increased by nearly 4 per cent, with female registrations increasing by 2100.
Social media following also grew, particularly on Instagram, where the number of followers of the unions has increased from 16,500 to more than 85,000 in the past two years.
A substantial increase to broadcasting revenue had led to the unions receiving more money in grants from New Zealand Rugby, Jarrold said.
‘‘We expect this increase in grant money to be used to invest in the development of the game at the grassroots level, will continue in the foreseeable future.
‘‘However, the unions still need to remain vigilant with their spending.
‘‘After all, they are the current caretakers of the game and with that comes the responsibility to ensure that funds are spent purposefully, and are aligned to the strategy of growing the game in the community.’’