Moana Pasifika have received $4.5 million in government funding – via the Ministry of Foreign Affairs portfolio - to bankroll the new Super Rugby franchise, the Herald can reveal.
In order to satisfy New Zealand Rugby's Super Rugby licence terms Moana Pasifika needed to raise $4m to underwrite the franchise, and additional funding to cover operating costs.
In response to a series of Official Information Act requests to government departments, Sport New Zealand this week confirmed to the Herald it provided the $4m underwrite to Moana Pasifika Limited (MPL) and a $500,000 operating grant for the Moana Pasifika Charitable Trust.
Sport New Zealand issued that funding via a transfer from the Ministry of Foreign Affairs and Trade (MFAT).
The underwrite is available for a maximum of four years and includes an initial grant of up to $1m with no requirement to repay, and $3m loan facility.
Moana Pasifika must provide ongoing information to demonstrate sound financial management as part of the conditions of the drawdown.
In a statement to the Herald, MFAT explained the funding allocation.
"The government funding will allow Moana Pasifika to retain Pasifika ownership and management of the team and support its focus on achieving social and cultural outcomes for the advancement of Pasifika communities in New Zealand and the region," a Foreign Affairs spokesperson said.
"This includes benefits by way of remittances to Pacific countries and talent pathways for 'home nations'. The establishment and management of Moana Pasifika is aligned with Aotearoa New Zealand's broader priorities for the Pacific which are centred around building resilience across the region."
Sport NZ chief executive Raelene Castle believed the government funding would help Moana Pasifika achieve objectives beyond the rugby realm.
"It is envisaged Moana Pasifika will help encourage more children and young people into rugby and sports, which brings with it the associated benefits of being physically active, including health outcomes, increased cultural vitality and being more connected with community," Castle said.
Documents released to the Herald show the request for government assistance can be traced back to August, 2021, when Sir Michael Jones, chairman of the board for Moana Pasifika Trust, sent a letter to Minister for Sport and Recreation Grant Robertson outlining the team's vision one week after being granted a perpetual licence agreement to participate in Super Rugby.
Jones wrote this was a momentous and significant occasion for all of Pasifika. He said Moana's inclusion in Super Rugby from 2022 represents a movement for fulfilling Pacific Island rugby aspirations and community wellbeing.
"Having reached this position, where we have certainty about the licence, we now seek to formally engage with the New Zealand Government to discuss how we could work together to maintain Moana Pasifika as a fully Pacific owned entity and meet the financial covenant of the NZR licence we have signed, that ensures we are competitive on the field, strengthens Pacific unions and their national teams, and enables our broader vision and purpose to be a vehicle for positive socio economic shifts in out Pasifika peoples in NZ and out Island nations," Jones wrote.
"We are seeking New Zealand government support to assist us to meet the financial obligations and to possibly contribute to operational funding from 2022 onwards to lessen the impact of the inequitable level of funding from broadcast revenue."
Robertson responded on August 30 to congratulate Moana Pasifika on securing the licence agreement and praise Jones' leadership in championing their cause. While he did not directly assist the request for funding, Robertson suggested other avenues such as the Covid-19 recovery package.
"As Minister of the Crown, I'm unable to direct Sport New Zealand in its funding or operational decisions under section 10 of the Sport and Recreation Act 2002," Robertson wrote. "However, I would encourage you to speak with the chief executive Raelene Castle to discuss your proposal and seek advice in its progression."
Moana Pasifika originally intended to gain financial support from the respective Samoan and Tongan governments and rugby unions, but amid the global pandemic their limited resources were unable to assist.
Longer term, when the New Zealand government may withdraw funding, it is hoped Samoa and Tonga purchase a stake in the franchise.
In addition to government assistance, Moana Pasifika and fellow new entrants the Fijian Drua will each receive $1.2m in untagged annual funding from World Rugby over the next three years. This is aimed at addressing the missing link in high performance pathways for their respective nations.
New Zealand's five established Super teams turnover around $7m to $9m annually from gate and sponsorship, with a further $6m in player payments directly funded by the national body.
Moana Pasifika are not yet in the same financial league and must pay players from their sliver of broadcast revenue.
During the Super Rugby tender process NZ Rugby issued specific parameters around the need for Moana Pasifika to be anchored by Samoa and Tonga to offset concerns of cannibalising New Zealand talent.
Moana Pasifika chief executive Pelenato Sakalia says the creation of their trust is, therefore, the most important step the team has taken.
"It has never been done in professional rugby so there was a lot of toing and froing over this particular structure," Sakalia said. "If we were to have any chance of maintaining the integrity of Pasifika for Pasifika, and something truly owned by Pasifika, the trust was going to give us the best chance.
"A lot of people will become fixated on the government funding and lose sight of the most important thing – the creation of the group structure that embedded Pacific at the apex of everything we put in place.
"We believe if we maintain our authenticity that directly aligns with our narrative by empowering Pasifika then they become the custodians of our destiny.
"Everyone has been looking at Moana Pasifika through the traditional commercial rugby lens. The objectives of the Moana Pasifika trust enables us to partner with a wider range of constituents. Our community and service workstream in time will be just as important to what we do in rugby. It just so happens that right now rugby is critical for us because that's what we need to get up and running."
Addressing the $3m government loan, Sakalia says that funding is being used solely as an underwrite.
"Do we need it for our day-to-day spending? No. It is a mandatory requirement just like all other franchises. Some of the teams satisfy that by having a bank facility that they are then charged a fee. Others have a line of credit with a group of investors. Each and every franchise has gone through and satisfied that particular condition.
"The best option that materialised for us, because we were dealing with a number of different parties, was our discussions with the government."
The Herald understands richlister and former Blues owner Murray Bolton approached Moana Pasifika about buying a controlling stake in the franchise. Moana Pasifika determined adopting that route would compromise their vision.
"There's no doubt bringing in a single investor provides familiarity and comfort but if you are owned by an individual how does that align with your Pasifika narrative?
"If we rolled something out that was privately owned and replicated all the other franchises but we put a veneer of Pacific branding over top of it, it wouldn't take much for the average New Zealander to see through it.
"Government wasn't the starting point it only materialised towards the backend of the journey."
Moana Pasifika's season-opening match against the Blues has been postponed after seven players tested positive for Covid-19. It is now hoped they will make their debut against the Chiefs on Sunday, February 27.
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