Gregor Paul is the Herald on Sunday's rugby writer

Rugby: Cup win reverses fortunes

The moment Richie McCaw lifted the World Cup in 2011, New Zealand Rugby's finances started to soar. Photo / Brett Phibbs
The moment Richie McCaw lifted the World Cup in 2011, New Zealand Rugby's finances started to soar. Photo / Brett Phibbs

New Zealand's 2011 World Cup victory has been worth $22 million so far and will probably end up valued at close to $25m.

As will be revealed this week at the New Zealand Rugby Union annual general meeting, the 8-7 victory against France three years ago has had the most dramatic bearing on the game's financial well-being.

The impact of that night - of that tournament - has been enormous financially. The game here was dying, not so slowly either during the last World Cup cycle, with $16m lost in the four years and cash reserves dropping at a faster rate.

Since Richie McCaw lifted the trophy, the accumulative profit now stands at $6.1m. Last year brought the NZRU a $2.9m profit, with 2012 posting a surplus of $3.2m. The underlying picture has also saw revenue increase from $106m in 2012 to $117m in 2013 and the forecasts for 2014 are equally promising.

Cash reserves were also bolstered by a $13m injection last year and now sit at $63.7m and, almost unbelievably, all 14 professional ITM Cup provinces are in the black.

The last two years have been good and with a test in the United States this year that may net a $1m profit and all the major sponsors locked in again, 2014 is likely to be another profitable year for the NZRU.

Compare this with the last World Cup cycle and the contrast is stark. The All Blacks bombed in 2007 and came home from France to a volatile public who felt bemused by the events of the past 10 months.

There had been the random and much hated reconditioning policy during Super Rugby, the constant rotation of players and then the psychological meltdown against France in the quarter-finals.

The mood was against the national game and problems were compounded by a string of senior players leaving and the onset of the global financial crisis.

A $366,000 profit was posted in 2008 but that only came about because the All Blacks played 15 tests. In 2009, a year that saw the All Blacks sitting on four wins and four losses by July, the bottom fell right out - the national union lost $15.9m. Some of that was down to costs related to hosting the 2011 World Cup, but really it was a sign that rugby and the All Blacks were losing their fan and sponsor appeal.

Another $9.1m was lost in 2010 and by the time the World Cup kicked off in 2011, the NZRU had lost $16m since that fateful night in Cardiff four years earlier.

They had also seen cash reserves dwindle to below $50m from the high of $81m in 2005 and, more worryingly, a handful of provincial sides were close to insolvency.

If Stephen Donald's World Cup final penalty had drifted wide, the game here would now be in a vastly different state. Victory changed everything.

Being world champions was key to bringing AIG on board as a major sponsor. Maybe they would have done it anyway but maybe not. Being world champions enabled the Rugby Union to ramp up the price to play at Twickenham in 2012, the All Blacks charging $4.5m for the one-off test outside the official window.

Being world champions has, probably more importantly than anything else, allowed New Zealanders to feel a level of contentment about their national team.

The itch has been scratched. Being ranked No 1 has more relevance when it is combined with being world champions.

Perhaps now the angst has gone from the public analysis and there is a willingness to enjoy the All Blacks in the present rather than constantly projecting their performances in the context of World Cup ramifications. Perhaps now the All Blacks are better connected with their domestic audience and even more of a fascination to their international following.

- Herald on Sunday

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