Steamers back in black for 4th season

As Otago teeters on the brink of financial ruin, Bay of Plenty is set to announce its fourth straight profit.

Bay of Plenty Rugby Union chief executive Mike Rogers said the profit would be modest, similar or slightly less than last year's $51,000. It would be confirmed once the final audit on the union's accounts was complete.

Rogers said the union was empathetic to Otago's situation, with the southern union likely to cease trading on Friday, saddled with debts of more than $2.2 million and with no ability to repay them.

"We understand the predicament Otago is in because we were one of the first unions to go through that [financial] hurt. We know how tough the environment is for rugby and for all sport.

"We had to learn a lot during that period [following a record $845,000 loss announced in 2008] and tough calls were made which ultimately helped us in terms of our business model and the way we operate now. We feel like we run a good business model in the climate we have to operate in and cut our cloth to fit.

"A lot of it is common-sense stuff and accountability - treating every dollar like it's the last dollar we get, because that's what our commercial partners and stakeholders should expect of us."

Otago's meeting on Monday heard the union posted a loss last year of $862,000 and may not be able to field a team in this year's ITM Cup. Union chairman Wayne Graham said they had no other option but to cease trading and would apply to the High Court on Friday to put itself in liquidation.

The New Zealand Rugby Union has declined to bail-out the union or loan it any money as it simply said the debt was too big and would set a precedent it was not comfortable with.

Rogers said Bay of Plenty's previous indebtedness had forced it to cut costs and innovate, while continuing to grow registered player numbers. It was the first union to bring in individual back-of-jersey sponsors, revenue gathering now used by most ITM Cup provinces.

With gate revenue largely driven by the weather, commercial sponsorship and keeping a lid on player expenditure were two critical areas, Rogers said.

"I'd say funding the professional game is where most unions find the biggest challenge, there's no secret there. It's something we're working hard on to ensure we don't over commit and do get value out of our players."

Bay's player budget and Steamers' operational costs were cut by $100,000 last year and the union ranks about mid-pack among the 14 first division provinces for what it pays its players, around $1 million a season across the ITM Cup squad.

"The last figures I saw we were sixth among the seven [top-tier] unions and we're probably somewhere near that still. Your Hawkes Bays, Taranakis, Aucklands, Canterburys and Waikatos generally spend more than us but right across the board everyone is understanding you can only spend what you earn."

Rogers would like to see salaries decrease even more. "We're going into a new collective bargaining agreement this year and we're a firm believer that the salary cap [currently $1.35 million] has got to again go back. Players need to realise that they're not going to earn big money playing ITM Cup, it's more about the pathway and opportunity."

The Bay of Plenty Rugby Union's annual meeting is at Paengaroa on March 12.