Gregor Paul is the Herald on Sunday's rugby writer

NZ Rugby struggling to balance the books

The All Blacks are double World Cup champions but that doesn't mean NZR are rolling in cash. Photo / Brett Phibbs
The All Blacks are double World Cup champions but that doesn't mean NZR are rolling in cash. Photo / Brett Phibbs

A lack of home tests and a failed Wellington Sevens will be fingered today as the primary reasons why New Zealand Rugby had another tough battle last year balancing the books.

The national body will reveal their annual results today and the financial picture is expected to be largely similar to how it was in 2014 when the union posted a modest profit of around $400,000.

The results will confirm what NZR have long said, which is that they need to continue to diversify their revenue and to reduce their reliance on ticket sales to All Blacks tests.

While it was an incredible year for the All Blacks' legacy and brand, it was a harder business trying to commercialise that success.

Typically, the All Blacks play six home tests in a season but last year, because of the World Cup, they played only two - one of which was at the comparatively small AMI Stadium in Christchurch.

Revenue was further compromised by lower than hoped for ticket sales at the Wellington Sevens, and the All Blacks' historic test in Samoa may have also required NZR to make an investment they normally wouldn't for an away test.

Off-setting the smaller fixture list was a six-figure payment from World Rugby.

At the end of 2011, NZR argued participation in the World Cup cost them an estimated $15 million. Other major unions supported that argument and agreement was reached that World Rugby would pay compensation packages that were around $8m to $10m to each of the Sanzar countries and Six Nations.

NZR would ideally like to change the balance of their income portfolio so sponsorship money becomes a bigger percentage.

The All Blacks can't play any more tests than they currently do in a calendar year and TV broadcast income has been locked in for the next five years.

The 2015 financial results will hammer home how important it is for NZR to step up their efforts to find a third major, global sponsor for the All Blacks. The national side holds a treasured place in the sporting landscape with both rugby and non-rugby nations aware of the legacy. The problem, however, is that while the All Blacks have been hugely successful - especially in recent years - they are domiciled in a country of just four million people with limited heavyweight corporates to tap up for funds.

The market for sponsors in New Zealand is exhausted and specific challenges exist in trying to persuade major global brands to sign up to sponsor a national team. The likes of Barcelona and Manchester United have the distinct advantage in leveraging their brand as they are club teams - and they are also playing most of their football in heavily-populated markets.

The All Blacks have two major global sponsors - adidas and AIG - but believe they have room for a third, although it's highly unlikely they would offer up any real estate on the black jersey for another logo.

- NZ Herald

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