Turnaround for union's fortunes

By David Porter

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Bay of Plenty  Rugby Union's chief executive Mike Rogers has reported  its seventh successive annual surplus.
Bay of Plenty Rugby Union's chief executive Mike Rogers has reported its seventh successive annual surplus.

The Bay of Plenty Rugby Union has just reported its seventh successive annual surplus and is well down the road to financial sustainability.

The results represent a significant turnaround after the non-profit organisation slumped to an almost $1 million deficit in 2007, putting the union at risk of losing its independent identity.

Insiders credit the efforts of a key group of local businessmen who rallied around the union, brought in a stronger level of governance, and have helped reconnect it with key stakeholders and the wider community.

But those involved emphasised the problems that almost destroyed the union were common to a number of other provincial unions as rugby transitioned into the professional era (see story below).

The union's chief executive Mike Rogers said re-establishing credibility and gaining the trust of its key stakeholders and commercial partners had been a major challenge after it ran into problems almost a decade ago.

"This is not something that is achieved overnight and it has taken a consistent approach over a long period of time to rebuild these relationships," said Mr Rogers, who took over the role in 2011 from Tauranga accountant Jeremy Curragh. He previously served as operations manager.

The union had improved its financial management, including innovations such as establishing a partnership with the Waikato and Counties rugby unions and the Chiefs to share financial services.

That had become a best practice model advocated by New Zealand Rugby.

"This model was very innovative for sports organisations and required significant trust," said Mr Rogers.

Key players in the turnaround strategy were a group of well-connected local businessmen, with Bruce Cameron, the director of a number of local companies, playing a crucial role, insiders said. Mr Cameron stepped in as chairman for four years and brought in a strong group of local businessmen, including former Pak 'n' Save Tauranga owner Glenn Cotterill, KPMG Tauranga partner Mark Thomas and others, as well as convincing Mr Curragh to take up the chief executive role.

"The rugby community and our commercial partners immediately had greater confidence in our organisation and were prepared to back us at a very difficult time," said Mr Rogers.

However, the plan meant initially prioritising the financial health of the union over its ability to deliver the services required to the community.

Cooney Lees Morgan partner Owen Cooney, who joined the board four years ago, said at that time the focus had been on financial survival.

"We've realised we're at a different stage now. Rather than just needing to have a hard-nosed business case, we had to start looking to all our stakeholders and what was important to them and to our commercial partners."

Realty Group chairman Richard Cashmore, who has been closely involved with the board's work, said the benefits to the Bay of Plenty of having thousands of kids playing sport on Saturday mornings were much greater than just a rugby thing.

"The new administrators that came in got involved with things across the board with universities and polys and the community in general, and in selling the benefit of the game and what it did for the health of kids."

Mr Rogers said the union understood the importance of being a strong contributor to the community.

"We are determined that rugby will not again fall into the serious financial challenges of the past."

Union's improved position:

* The Bay of Plenty Rugby Union last month reported a 2015 financial year surplus after depreciation of $104,000 on income of $4.43 million and expenditure of $4.32 million.

* The board is budgeting for setting up a cash reserves fund of $1 million between 2016 and 2020.

* In 2015 the union had 10,100 players, 621 coaches, and 103 active referees, compared with 8700 players, 380 coaches, and 80 active referees in 2007.

* The union is about 500 registered players behind Wellington, the third-largest union in terms of player participation.

Rugby restructure an 'unpleasant experience'

A number of provincial rugby unions struggled in the early days of professionalism with maintaining a professional team, while continuing to meet the needs of young amateur players.

The union grappled with the fact that while a large part of its funding came from gambling trusts, that money could only be spent on developing the game at the amateur level. As the costs of running the professional team in the pre-salary cap days skyrocketed, income failed to keep up.

Meanwhile, the Bay did not have major head offices of corporates, so sponsorship was hard to raise. The global financial crisis also had an impact.

When the union's deficit grew to almost $1 million in 2007, the local stakeholders agreed with New Zealand Rugby that a new board was needed.

Former chairman Bruce Cameron, who led the turnaround, said that when he took over, the landscape was different.

"There weren't really any strong protocols around the professional side of the game. There was a culture of secure the player you required at money that would be paid for, but found later."

Mr Cameron said the early stages as the new board moved to cut costs and restructure, with inevitable redundancies, was the "most unpleasant experience of my life".

Chief executive Mike Rogers said Mr Cameron had been critical to leading the change required. "He was able to attract quality people around him on the board and was also prepared to make the tough decisions required.

"Bruce also understood the importance of strong communication with stakeholders and ensuring they were engaged with the organisation."

The board is now chaired by Paul Owen.

Mr Rogers noted that union directors volunteered their time.

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