Franchises licensed to thrill
Unshackled from the restrictions of expiring licences, the future for New Zealand’s five Super Rugby franchises appears bright.
New Zealand Rugby (NZR) has put perpetual licences with fewer restrictions on the table, opening the door for new investment and commercial opportunities for cashstrapped franchises.
The Crusaders, having banded together with the four other franchises, last week became the first to put pen to paper.
Consultation remains ongoing at the remaining four franchises, including the Chiefs, who chief executive Michael Collins confirmed would work through it with their investors and board in the coming weeks.
‘‘It is really, really positive but it’s taken a long time. There’s really good things just around the corner, I believe,’’ Collins said.
Delayed by the Covid-19 pandemic, the new model has been about two years in the making, and puts a welcome end to the old licencing model, which resulted in them expiring at the end of each broadcast deal.
‘‘It was a marginal financial model and there’s been quite a bit of tension around where certain commercial rights reside. Most clubs have made virtually no money for a decade, and the whole Super system at the club level has been break even for about a decade,’’ Crusaders chief executive Colinmansbridge said.
‘‘We [Super teams] said ‘let’s see if we can change the model’.’’
One of the biggest gripes with the old model was the regular expiry, making it unattractive for private investors to commit. It didn’t stop them from coming on board with some teams, but it’s understood they’ve long been frustrated by a lack of certainty and longevity.
‘‘We need investors or shareholders to be able to be invested in something that’s going to exist for a long period of time,’’ Mansbridge said.
Asked how much capital he’d like to raise, Mansbridge was hesitant to put a figure on it but said the potential for ‘‘tens of millions’’ of dollars was there.
There were other limitations under the old model.
Deferred a year due to the pandemic, the Crusaders last year announced the establishment of an academy at the University of Wollongong in Australia. The new revenue source took more than a year of negotiating with NZR to get over the line, and came with many conditions.
‘‘Those things, we would be able to do as a right, as long we don’t bring the game into disrepute,’’ Mansbridge said.
New commercial rights will provide opportunities for franchises to innovate and create revenue streams, while existing revenue streams will be redirected to them from NZR, including advertising from virtual banners and space on jerseys.
Should new rights be invented, they would default to the franchises.
‘‘It’s a fundamental break from survival mentality, where every broadcast deal you limp your way through to the end,’’ Mansbridge said.
NZR will continue to pay the wages of two coaches per team, and employ the players and second them to the Super sides.
The Kiwi teams will have an obligation to participate in the Nzr-provided competition. However, theoretically, they could compete elsewhere out of season, just not with NZR contracted players unless consented.