Top All Blacks are well paid but there is a big drop to Wasps-bound Lima Sopoaga. Photo / photosport.nz
Top All Blacks are well paid but there is a big drop to Wasps-bound Lima Sopoaga. Photo / photosport.nz
Selecting All Blacks from overseas and tax concessions, however unlikely to be approved here, are among ideas expected to be proposed when New Zealand Rugby hosts a summit with leading agents to tackle mounting concerns about player retention.
Contracting is fast becoming NZ Rugby's greatest challenge. Here, a Herald on Sunday investigation lays bare the major issues and potential solutions surrounding this unnerving space.
In the age of the millennial, many players are no longer content to bide their time or, at the other end of the spectrum, peruse long and distinguished test careers.
Priorities are changing. Players are kingmakers, with many now exiting younger to chase enticing offshore money.
Top-end All Blacks –captain Kieran Read and Beauden Barrett – pocket in excess of $1 million with all revenue factored in at home, and therefore don't need to go elsewhere.
But there is a big drop to Wasps-bound Lima Sopoaga, and another tier down to those on the fringe of the All Blacks.
Panic stations haven't been reached but NZR is spooked by the flood of talent penning overseas deals. The imminent exits of Sopoaga, Seta Tamanivalu and Charlie Ngatai caught those within the All Blacks by surprise, if only for the lack of consultation.
Unless changes are made leaving mid-World Cup cycle and walking out of the All Blacks squad may be the new norm.
From a New Zealand perspective, there is more heat in the overseas market than ever. And sitting near the bottom end of the financial tree, it is not going to get any easier.
Insiders suggest the UK salary cap will eventually rise from £7 to near £12 million ($23m NZD) per-season in the coming years. That alone is frightening.
Further issues could come with Brexit. All Blacks heading to Europe jump on the 'best and world' ticket if they've played a test in the past 18 months. Changes to laws through Brexit are expected to broaden that visa out to all Super Rugby, opening the door for hundreds more to make the move.
The Herald understands NZR now plans to form a working group with leading New Zealand player agents to discuss what more can be done. Last year similar meetings were held with those at the face of age-grade development.
Given the early nature and sensitivity of discussions, agents and officials spoke to for this piece preferred not to be named.
Including agents in mapping a path forward makes sense. Generally, players are more open and comfortable expressing true feelings about intentions to head abroad to their agents than coaches or administrators as many would prefer to avoid conflict.
The Herald revealed recently NZR's plans to forge relationships with select overseas clubs and confirmation of this policy arrived on Friday with London-based Harlequins the first unveiled. Sharing of ideas as well as player and coaching trades will follow.
Yet that is only one piece of the complex contracting puzzle.
NZR confronts many problems. Some of which they can't control; desires of club owners, offshore salary caps, easy visa access for NZ players and coaches, exchange rates, bumper French broadcasting revenue.
There is no silver bullet but, equally, to achieve headway nothing should be off the table. Ideas expected to be tabled at the summit include:
• Discussions around potentially pushing for tax breaks embedded in competing European markets
• Private investors helping to fund player retention for individuals or groups
• Opening up the policy to select All Blacks from overseas
NZR is also considering everything from the way it structures retainers to allocating funding, with those on the fringe of the All Blacks often missing out on significant top-ups and therefore frequently able to double their earnings abroad. Simple economics means the majority in those situations – Brad Shields, Blade Thomson – will continue to go.
Assembly fees may also need tweaking. Tamanivalu couldn't count on banking $7,500 for each week in camp with the All Blacks (around $120,000 per-year) and, thus, the deal he signed with Bordeaux was far more attractive.
But in terms of a wish list, tax concessions would sit near top.
On a global scale NZR is at a huge disadvantage.
Rugby residents in Ireland, including former Chiefs midfielder Bundee Aki, can claim a 40 per cent rebate on their top 10 earning years, provided they retire in Europe. The scheme was originally made for jockeys with rugby piggybacking.
Bundee Aki. Photo / Getty Images
France has a 'le chomage' pension system which allowed former All Blacks prop Carl Hayman to enjoy an eight-month government-paid holiday after retiring. This is capped around €8,000 per-month for up to two years.
Leading players in England and France also benefit from image rights tax breaks. This is where playing services and the use of imagery are separated. Image rights are taxed at a lesser rate – thought to be along the lines of $15,000 to $17,000 of every $100,000 taxed around 10 per cent.
While lawyers and advisers clip ticket, it still means more money in players' pocket. Australia's NRL has made pushes to follow AFL for players' image rights but none of this exists in New Zealand.
As it stands, these perks in foreign rugby environments have a significant impact when it comes to comparing salaries.
NZR is not openly beating the drum saying tax changes need to happen now – they tried lobbying government once before in 2008 with a Wayne Smith/Steve Tew led delegation and got nowhere, despite the National party being initially receptive while in opposition.
But with player drain fears reaching peak levels, conversations are again underway about this topic.
It is not without precedent. Tax breaks were given to big budget Hollywood movies produced here, and the government handed out over $40 million in America's Cup funding.
New Zealand is an export nation and tax breaks could be broadened to include other sports such as yachting.
Rugby undoubtedly plays a large role in contributing towards New Zealand's national identity while also inspiring activity which has positive health spinoffs.
But in a largely conservative society, changing public perception around giving tax breaks to already wealthy players, and being seen to put them ahead of ahead of doctors, teachers, factory workers and vulnerable children, is a political minefield.
One leading agent and other astute rugby minds believe the easiest way to immediately let heat out of the market is to select All Blacks from abroad.
This view is based on the premise that selecting only from within New Zealand fuels desire for Kiwi players as they are available for full seasons in Europe. While Premiership clubs must release local test players for the Six Nations, June and November international windows, contracted All Blacks continue playing.
Aaron Cruden. Photo / Greg Bowker
Aaron Cruden, Tawera Kerr-Barlow, Charlie Faumuina, Charles Piutau, Steven Luatua and Victor Vito all fall in this bracket.
The spine of many European teams - 10s, 8s, 12s, locks – are filled by Kiwis because they can be relied on, which drives up price.
The example given is Argentina. When the Pumas entered the Rugby Championship and the global release window overlapped the beginning of the European season, suddenly Argentinians couldn't get jobs in France.
Clubs weren't willing to pay for players who didn't arrive until October and then be gone again in November.
Now the Pumas only select from within, Argentines are back in favour in Europe.
The counter to this argument is, of course, selecting from abroad could open the floodgates and rapidly weaken New Zealand teams. Being so isolated returning players would also be jet-lagged or fatigued after trekking back for home tests.
The final idea is to attract a consortium of private investors who each put large sums in a trust with interest then used to help fund player retention. Inevitably, this would come with expected access to players for promotional purposes and potential influence.
Every concept comes with positives and potential pitfalls but accepting the status quo is clearly not an option.
At least by getting in a room together for the first time, those at the forefront of New Zealand's player retention fight can hope to forge a way forward.
