‘Professional game financial challenge’

Rugby Southland’s outgoing chairman says financial challenges are still ahead despite the looming $1 million financial cash injection.

Bernie McKone resigned from the chairperson’s position this week but will remain on as a director through to the April 2023 annual general meeting.

When he does depart he would have brought up 10 years of service with Rugby Southland.

A highlight for McKone during that time was Rugby Southland had become more financially viable, than what he saw when he first joined the board in 2013, he said.

‘‘We have removed all debt to community funders and [New Zealand Rugby], and indeed have a strong cash position moving forward.’’

However, McKone warned there were still challenges ahead, even with New Zealand Rugby’s deal with global private equity firm Silverlake which will lead to a one-off $1m cash injection for Rugby Southland.

On top of that Rugby Southland has recorded back-to-back surpluses of $249,000 for 2021 and $730,000 in 2020 which has helped improve its cash reserve situation.

However, McKone pointed out most of the surpluses achieved over the past two years were due to reduced costs because Covid-19 disruptions. Certain programmes did not proceed because of Covid and in turn, there weren’t the costs attached.

‘‘Whilst we return to normal, we still need to ensure these programmes pay their way, otherwise we will be in the same state as we were ten years ago,’’ McKone said.

He said financing the professional game remained a challenge. The $1m from the Silverlake partnership will be used for the growth and sustainability of the grassroots game. At the same time there was ‘‘tension’’ for the Stags to be competitive at NPC level, McKone said.

In recent seasons Southland has been the lowest spending province of the 14 NPC unions, in terms of its player budget. There have been financial gains made through restructuring at Rugby Southland, as well as the implementation of shared services agreements to help reduce costs, he said.

McKone added there have also been positive developments for Rugby Southland around commercial relationships and sponsorships which has led to increased commercial revenue.

Although McKone said there were still pressures on the rugby model.

McKone has been replaced as chairman by Murray Brown, who is a former Southland captain during the 1980s, and was a Stags assistant coach under Phil Young in the early 2000s.

Brown is the current executive marketing and sales manager at Windsor Hardware and was voted in unanimously into the position as chairperson.

McKone said changing business commitments, along with a shift to Central Otago, were reasons behind his decision to resign as board chair.

He said Rugby Park remained a key issue for Rugby Southland and having a chairman residing in Invercargill would be beneficial in those discussions.

McKone believed Brown would be a superb chairperson.

Brown agreed that several financial challenges remained for Rugby Southland.

‘‘Financial sustainability is critical and with the recent Silverlake deal, Rugby Southland must be closely aligned with the future strategy of NZ rugby which will be closely audited and reported on regularly,’’ Brown said.

‘‘Other areas that will require attention will be in supporting further development of the rugby sector at grassroots levels, teenage, women’s, Māori and Pacific, that forms a key part of NZ Rugby’s future direction.’’