From financial survival to growth
Rugby Southland can finally switch from financial survival to growing the game, Rugby Southland chairman Jason Franklin says.
Rugby Southland confirmed a 2016 financial surplus of $378,000 at its annual general meeting at Rugby Park in Invercargill last night. The large surplus has come on the back of New Zealand Rugby increasing its annual funding to provincial unions.
Rugby Southland’s NZR funding has increased by over $580,000 per year – from $825,470 in 2015 to $1.4m in 2016.
In December 2015 the organisation had just enough money in the bank to pay staff wages and had to wait until the following month to cover all of its bills.
The 2016 surplus means Rugby Southland for the first time in many years has built some much- needed cash reserves, rather than operating from month to month with nothing in the bank.
‘‘Rugby Southland is now in a position where it can look to the future with real confidence, with a significantly healthier balance sheet,’’ Franklin said.
‘‘The net profit for the year of $378,000 builds reserves to a position where the organisation can plan to reinvest into both the community game and also into the high-performance programme.
‘‘It is only now that the organisation can realistically move from survival to growth mode.’’
Included in that growth is the move to employ a women’s development officer for the first time in the union’s history.
To be in a position with cash reserves is a big step forward for a union which seven years ago was close to being bankrupt.
It took a $1.5m bailout package from the Invercargill Licensing Trust, Community Trust of South- land, and New Zealand Rugby to lift them out of a financial hole.
Franklin paid tribute to everyone who had worked hard to ensure Rugby Southland had been able to get its head above water financially.
‘‘From the low point of the 2010 and 2011 situation, the financial position of Rugby Southland at the end of 2016 is a real credit to all the stakeholders who have worked tirelessly to address what was a dire situation,’’ he said.
‘‘While the organisation is now able to focus on investing into our game, the ongoing support of all our stakeholders is very important. We have turned the corner but need the support of all our stakeholders to ensure our game enjoys success at all levels.’’
The financial turnaround was something rugby officials couldn’t get wrong with funders suggesting there would be no more chances following the 2010 bailout.
It has meant slashing the Stags player bill, which at its height was over $2m per season. In 2016 Rugby Southland spent just $650,000 in what had been a dramatic reduction.
That reduction has provided challenges in regard to performance with only Northland now below Southland in terms of what they spend on contracting players.
Rugby Southland general manager Andrew Moreton indicated they want to use the money they do have available to try to ensure the best young players in Southland remain playing in the province.
‘‘The [2016] season performance outlined the need for greater depth in the squad which of course comes at a cost.
‘‘The need to increase our commercial revenue is imperative to retaining our quality young players in Southland, maintain a strong core of returning players each season, as well as the pathway to contract our own local players through the academy programme.’’
In 2016 the Stags’ salary cap was set at $750,000 which is based on a percentage of the organisation’s commercial revenue from the year before.
Moreton felt there was room to increase that commercial revenue in 2017 through sponsorship and also the Stags match day income.
Sponsorship income dropped 10 percent in 2016, from $730,000 down to $654,000.
Match day income from Stags games also dropped from $226,000 in 2015 to $205,000 last year.
However, Moreton felt the draw this season would be more conducive to bigger crowds.