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State of the Unions 2013

Back in black


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State of the unionsWelcome to the 2nd edition of the Deloitte Sports Review, a review of the 14 semi-professional and amateur rugby unions competing in New Zealand’s premier provincial rugby competition: the ITM Cup.

Through a financial review of each union’s annual financial accounts, our findings show that there has been an overall improvement in financial performance delivering a collective surplus, with lower costs outweighing decreasing revenues. There are encouraging signs that the grass roots community game is still receiving the same level of funding as previous years, while administration costs have declined.

It is important that unions look ahead and focus on the future, and at the same time acknowledge and learn from past struggles. In order to maintain financial viability, unions must pay special attention to future challenges and not only see these as a threat, but also an opportunity to grow the game and secure its future success.

The 2nd Deloitte Sports Review analyses the country’s top provincial rugby unions and recognises that there has been a collective surplus made by all 14 unions. The 2012 financial year shows that a surplus of around $0.5 million has been achieved. It has been the first combined surplus in at least 6 years and shows that New Zealand provincial rugby is now ‘Back in Black.’

The leading unions produced combined revenues of around $67 million, a decrease of around $1 million from last year and a fall of approximately 20% from six years ago. Total costs have dropped from $68 million in FY11 to $66 million in FY12.

Although there are signs that the financial performance has improved slightly since last year, there is further improvement to be made to the financial performance of New Zealand’s strongest unions. To ensure this happens, community support must continue to be a key focus and those responsible for the financial stewardship of the game must look to the future and identify threats and opportunities that will arise and make astute decisions to position themselves to take advantage of any new developments in their local markets.

Local community support of the teams and careful management of the key costs including player payments and administration must continue to occur. The community game is largely funded by the public through grants and New Zealand Rugby continues to receive significant and vital investment.

Financial viability will improve if future challenges around the competitive demand for supporters discretionary income are treated as opportunities and not threats.

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