Rugby: $612m deal eases rugby's pain

Steve Tew. Photo / Greg Bowker

The New Zealand Rugby Union softened the blow of revealing a record $15.9 million loss yesterday by also announcing a new, improved broadcasting contract.

The Sanzar deal is worth US$437 million ($612 million), a 35 per cent increase on the current five-year deal, but New Zealand's slice is not clear cut.

"I can't put a number on it directly," chief executive Steve Tew said after yesterday's annual meeting.

"The key thing for us is we've got that 28 per cent uplift [on the previous deal]."

Tew said they were getting more broadcasting money for delivering fewer games, as there will be fewer national provincial championship games from next year onwards.

There could be more money to come, perhaps as much as $25 million, with deals still to be included for some Northern Hemisphere markets in Asia, North America and Europe.

There will not, however, be an increase in the matches played by the All Blacks.

"They are playing to the limit at the moment," said NZRU chairman Jock Hobbs.

"We would like to reduce the amount of games they are playing. It is not a long term plan at all to have them playing these extra tests."

Hobbs said the union would need to develop other sources of revenue.

Sanzar concluded deals with Sky Television and Supersport (South Africa) and Fox Sports (Australia) and an agreement for the UK market.

"Not only was it a good transaction and a good deal, it creates certainty over the term of the transaction," Hobbs said.

"While our financial situation is quite tight, we have reserves [$77 million] and we have built in and locked in a high percentage of our revenue. That doesn't mean everything is easy and rosy, but they're benefits we do have."

The scale of the deal might have surprised those who believed New Zealand could be penalised for its decision to pull 22 players out of Super rugby in 2007 which angered broadcasters.

Viewership last year in the Super 14 was also down, though the figures for the NPC, now the ITM Cup, were up. Selling this competition themselves, rather than as part of a Sanzar bundle, has benefited the NZRU.

"It's better than expected across Sanzar because there's quite a big uplift in Australia," Tew said.

"There's no doubt that the changes in the Super 14, to go to 15, to go to conferences, to go longer, has been good in the Australian market and Fox has come to the party in that regard."

"We've been able to carve out the ITM Cup [NPC] and sell that separately to Sky and that's helped us."