Bay rugby bucks trend to post small profit

As many of New Zealand's biggest unions teeter precariously on the brink of a financial abyss, Bay of Plenty is set to become just the second major province to post a financial profit.
Bay of Plenty are again in the black, set to announce a $51,025 profit at its annual meeting in 10 days - down from last year's $144,972 but still healthy despite taking a hit huge on gate takings during 2010's rain-ravaged ITM Cup.
Hawke's Bay yesterday posted a $32,000 profit, the first provincial union to come out on the plus side of the ledger.
Only Bay of Plenty, Canterbury and Tasman are likely to follow the Magpies down the profit path, with Waikato, Wellington, Southland, Manawatu and Taranaki all forecasting six-figure losses, while Otago's fall has been spectacular, with a net loss of $635,000.
Bay of Plenty Rugby Union chief executive Jeremy Curragh yesterday confirmed their position, describing it as "modest, (but) we're comfortable where it finished up."
It is the Bay's third straight profit under Curragh, who departs in four weeks, following the $190,000 positive yield in 2009, on the back of the record $845,000 loss announced in 2008.
Bay's revenue grew 7 per cent on 2009 to just over $4.3 million, with commercial revenue (sponsorship and hospitality) up 15 per cent.
Curragh said the killer was ITM Cup gate revenue, with spectator attendance at home games, including the plum clash with Auckland at Baypark Stadium, wrecked by rain.
Average attendance fell to around 3000 per game from 9500 the previous two years, with gate takings last season down $224,000 - or 43 per cent - on the previous season.
"(The drop in) gate revenue is disappointing, due largely to the atrocious weather rather than lack of support," Curragh said. "(But) we're conservative in how we budget for this, which protects us from the kind of year we had.
"Any decent gate is fat, which is the way it has to be when you're dealing with weather elements."
The union tightened its belt to combat the recession, although an extra 18 per cent was spent on community rugby and the Steamers cost $179,000 more than the previous season - about $1.65m, with Bay boosting player depth rather than paying players more.
Food and accommodation costs also went up with the greater number of away games.
All Blacks commanding $100,000-$120,000 a year from provinces on top of their NZRU contracts for, in some instances, just a couple of games a season are on the way out, with Curragh saying it was evident cash-strapped provinces were reasssessing how they contracted players.
"There's a definite market correction happening for player salaries, going downward across all 14 unions. Historically there been 2-3 unions keen to keep playing a premium, but under the new (New Zealand Rugby Union) contracting model you can only contract a player up to $60,000, which caters for the All Blacks.
"If a union wants to pay over and above that they need NZRU permission."
Growth in commercial revenue, spearheaded by the union's commercial manager Dirk Merwe, was satisfying given the harsh financial climate, with Bay protected slightly by its reliance on a group of sponsors rather than a few big corporates.
The balance sheet shows positive equity of $110,000, almost twice last year's.
"When we went belly-up a few years back we were in effect insolvent, but hard work from the board and staff and backing from the business community means we're building up some reserves.
"It's still very modest, and we can't rest on our laurels given trading in 2011 will be tough with a World Cup and condensed ITM Cup. It's not quite a comforting buffer yet."
Bay of Plenty's annual meeting is at 7pm on Monday, March 14, at the Eastern Districts clubrooms at Paengaroa.