NZR bosses not safe as mass job cuts kick in
Mass redundancies at New Zealand Rugby are expected to claim members of the executive team, emphasising the scale of the financial challenges confronting the game.
NZ Rugby announced redundancies to staff last Monday and it is understood the drastic restructure involves most roles being disestablished, with nearly 50 per cent of 180 full-time jobs lost.
The grim news comes after NZR announced a $7.5 million loss for 2019, and forecast a $120m decline in revenue for the current financial year in the wake of the sport’s halt due to the Covid-19 crisis.
NZR had already cut all staff wages by 20 per cent, a figure halved thanks to the 20 per cent Government subsidy.
The Weekend Herald has learned chief rugby officer Nigel Cass, employed by NZR since 2001 and on the executive team for the past three years, will be among those to depart. His farewell has been communicated to provincial unions but he is expected to serve through to the end of the year.
Although redundancies at NZR headquarters don’t directly extend to provincial unions and Super Rugby franchises, funding cuts are affecting head counts at all levels of the game.
The 14 leading provincial unions will take 15 per cent cuts to their annual payments. Each province receives $650,000 from the national body. The likes of Taranaki and Waikato, among others, are therefore in more perilous financial positions than before Covid-19 hit. Many unions do not have any cash reserves, leaving some on the brink of collapse.
The next concern is ongoing negotiations between NZR and the Players’ Association around cuts to provincial union player salaries. Some unions fear the yet-to-be-agreed figure could impact their ability to field a team in this year’s Mitre 10 Cup competition.
One provincial union source told the Weekend Herald there were $14m worth of player contracts that need to be paid and no indication of how.
As Covid-19 took hold, NZR handed $250,000 bailout packages to each of the five franchises but there are fears the resumption of games may see the Super entities regress.
Although Super Rugby crowds have plummeted over several seasons, franchises are understood to generate a large portion of revenue — for some, as much as 50 per cent, which equates to around $2.5m per season — from gate takings.
Super Rugby franchises do not directly benefit from broadcasting revenue as such, with NZR using that money to pay the players, the head coaches and one assistant.
The resumption of two games each weekend will involve franchises picking up the bill for other staff.
With no gate takings, these wages must be paid with only reduced sponsorship revenue to rely on.
Conversations between NZR and the Super franchises around this are understood to be ongoing, with concern being raised by private equity holders in the franchises.
NZ Rugby chief executive Mark Robinson is said to be leading the difficult conversations, with the burden of letting valued staff go said to be weighing heavily on his shoulders.