Million-dollar men
What the All Blacks stars really earn
Like most professional sports codes, the biggest expense on New Zealand Rugby’s balance sheet is player wages.
That’s been the pressure point in the system — the steadily rising costs of keeping the best players in New Zealand.
In the early days of professional rugby, the likes of Sean Fitzpatrick and Zinzan Brooke were offered about $250,000 to $300,000 a year.
The big stars of today such as Beauden Barrett and Sam Cane, are earning closer to $1 million a season, while lesser profile regular All Blacks command between $450,000 and $600,000 a season.
Most players who have a few years Super Rugby experience are likely to be earning between $180,000 and $250,000 a year.
The contracts work like this: players sign what is known as a retainer, which they will be guaranteed to be paid for the duration of their deal.
The majority of these deals are worth between $75,000 to $195,000 a year — the minimum and maximum payments Super Rugby clubs can make to individuals.
About 40 or so players — regular and top All Blacks — negotiate a topup to their retainer with NZR. In 2019, $10.9m was put aside to pay for these top-ups and the highest earners will have retainers of between $800,000 to $900,000.
Other payments kick in when players make the All Blacks. They are paid $7500 per week in assembly fees and these can be worth about $120,000 a year depending on how many tests the All Blacks play.
Assembly fees of between $2000 to $3500 per week are also paid to Junior All Blacks, NZ Ma¯ori, Black Ferns and the two sevens teams.
Players can earn an additional $21,000 to $85,000 by playing in the Mitre 10 Cup but this is paid by their provincial union and not NZR.
And it’s not just salary inflation that has resulted in NZR having to pay out the $67.2m in player payments that they did last year.
The All Blacks play on average 14 tests a year now as compared with nine or ten 20 years ago and they operate with significantly larger squads.
Super Rugby squad sizes have increased from 26 to 38 players (six are on lower value $50,000 development contracts).
NZR also has to pay the contracts of national sevens players (male and female) — these range from $45,000 to $90,000 a year — and also for about 30 Black Ferns contracts which range from $20,000 to $45,000.
By committing to play more All Blacks tests and build more extensive programmes for the Black Ferns, Junior All Blacks and Ma¯ori, NZR has added about $5m to its wage bill over the years.
But what’s really driven costs higher is the pressure exerted by the global market.
Irish, English, French and Japanese clubs have deep pockets and a strong demand for New Zealand talent.
French club Stade Francais has a total playing budget of $58m, while the likes of Toulouse, Montpellier, Clermont and Lyon all have about $50m to spend with no salary cap.
The English clubs keep pushing up their salary cap and it sat at $13.5m this year. They also have a licence to recruit two marquee players who don’t come under the cap and this has been used to lure the likes of former All Blacks Charles Piutau and Lima Sopoaga.
As the money has flooded into Europe, offers to the best players have jumped from a maximum of $1m a year to $2m a year for the likes of Piutau and Springbok Handrie Pollard, with Sopoaga and former
All Black Steven Luatua earning in excess of $1m.
In Japan, the clubs are backed by major corporations such as Toyota, Panasonic and Canon, and they will pay between $1m to $1.5m a season to lure players such as Dan Carter, Brodie Retallick and Sam Whitelock.
Ireland, too, has been willing to throw the money around, and as pay rates have jumped elsewhere, NZR has had to push the boundaries of its expenditure in the past five years to keep the best players.
To some extent, they have been able to stay competitive because the Player Payment Pool is directly linked to NZR revenue which has grown from $161m in 2016, to $257m in 2017 (the year of the British and
Irish Lions tour), and settled at around $190m in the past two years.
Yet even with this extra money, NZR has been forced to spend beyond its player payment forecasts.
In 2019, it spent $7.6m more than it budgeted, while it forecast that it would be $4m over budget this year on player payments — a policy it could operate, as the PPP ran at a near $12m surplus in 2017.
That heavy expenditure in 2019 reflects that several top All Blacks such as Beauden Barrett, Sam Whitelock, Brodie Retallick and Ardie Savea were coming off contract and had to be retained.
And because the majority of the increased budget has been spent on keeping the top echelon, this has meant the payments to many good but lesser known players have not been able to keep pace with what’s available offshore.
The wage gap is greatest in that emerging tier where players in New Zealand with a few years Super Rugby experience are typically earning $200,000-$250,000 a year, but could command $600,000$800,000 overseas.
With NZR forecasting a 70 per cent drop in income this year, the players have collectively already agreed salary cuts that are likely to persist for an extended period.
But New Zealand is the first country in the world to resume professional rugby, and with no limit on mass gatherings, may end up losing significantly less than it predicted during lockdown.
It could, in comparison with other major rugby markets, find itself in a relative position of financial strength and the big hope is that Covid-19 will have taken the heat out of the overseas market.
England’s clubs have already agreed to cut their salary cap to $9.7m when rugby resumes, but market observers still don’t think the power balance of the player market will shift away from the Northern Hemisphere.
“What we will probably see,” says Simon Porter of player agency Halosport, “is payments in New Zealand, France and England come down by a similar margin and therefore the gap will remain.”
The pressure on the NZR wage bill is unlikely to ease because the best players will still be able to earn more overseas and use that as leverage.
Bruce Sharrock of the agency Esportif believes that while there may be an overall global reduction in player payments, overseas clubs will still be able to offer superior packages if there is a Kiwi player they really want.
English clubs, if they retain their ability to sign marquee players at any price, will drive up costs in New Zealand, as will the Japanese clubs, because Sharrock says: “They will pay ridiculous money for the player they want.”
NZR currently has a reprieve from wage inflation due to the closed border and travel restrictions. But that won’t last long.
Irish, English, French and Japanese clubs have deep pockets and a strong demand for New Zealand talent.