In the second of a three-part series, we look at the shape of New Zealand professional rugby in a post-pandemic world. Read the first part of the series here.
Rugby faces enormous challenges at international and community levels – yet complexities on the professional domestic scene are by some distance the most difficult to unravel.
This is particularly true in the Southern Hemisphere, where the premier brand of professional rugby below test level was built not off the back of existing club or provincial teams, but instead "manufactured" through the bold enterprise we have known as Super 12, Super 14, Super 15 and recent editions of the bloated, broken Super Rugby model.
While New Zealand's Super Rugby landscape has remained remarkably stable compared to the fractured backyards of the other original Sanzar partners, Australia and South Africa, its inception immediately downgraded the National Provincial Championship, once the envy of the rugby-playing world, to second-class-citizen status.
Over time the NPC's positioning has been further relegated – last year playing at the same time as the World Cup – yet its performance systems have remained much the same for decades.
Historical captivation with Super Rugby is dead. It is now seen as a basket-case tournament with an unsustainable format, leaving New Zealand Rugby with a professional landscape that looks like this:
• A broken Super Rugby model with increasingly unhappy private-equity investors;
• A dwindling, disillusioned and in some cases disengaged fan base;
• A financially compromised NPC with increasingly agitated administrators;
• A confused contracting environment;
• Haphazard "performance pathways" and academy systems.
Work to overhaul New Zealand's domestic professional landscape began pre-Christmas with the McKinsey review. Covid-19's financial implications merely accelerated the urgent need for change.
To steal a cliché that has ricocheted through the corporate world over the past few months, "never waste a good crisis".
As brutal as it might sound, this novel virus has given New Zealand Rugby the leverage it needs to tidy up and rationalise the professional game below test level.
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The landscape here can't, and surely won't, look the same as it did before. The process of reshaping the roles and responsibilities at this level of the game is the most fraught, as many staunch provinces fight for their futures.
Northland and Southland were on the breadline pre-Covid; Waikato is slowly paying back a $1 million load to NZ Rugby and Taranaki has major financial problems attached to its stadium issues. Those struggling provinces are far from alone, either.
Now more than ever NZ Rugby grasps the need to reduce duplicated resources across academies, marketing and sponsorship, and strength and conditioning.
Auckland, for instance, has 42 staff members and one team; the Blues 32 staff, one side. Rather than share the same training facility in the same city, each entity has a base.
Attempting to push through major change naturally evokes passionate resistance. As a Super Rugby executive told the Herald for this series: "It is a bit of a come to Jesus moment."
The inefficiencies in the system have been laid bare, according to the executive, and if change was not brutal and swift, the top end would quickly suffer.
"There is so much money being spent on provincial unions, Super Rugby, high performance, development pathways, academies – it's not efficient," he says.
"If it was you'd hope we could sustain better players in New Zealand.
"Young players want to be Super Rugby players. Six or seven years ago they wanted to be provincial players first."
One provincial union (PU) chief executive also pointed out the glaring inefficiencies created by having effectively three tiers of paid players.
He noted one teenager involved in five high-performance set-ups, including national and Super Rugby age-group programmes, the Mitre 10 Cup academy and first-team squad programmes.
The teenager is by no means unique and the resources being thrown at that one individual are difficult to justify and counterproductive.
"Is it ultimately good for the player? Probably not," the source said. "We still produce really good players but can we do that for less? And whose job is it to do that? That's where it gets emotional between PUs and Super franchises."
These are questions fundamental to the game's finances moving into the post-Covid era. New Zealand Rugby has taken massive hits to its coffers, having lost $7.4m in the last financial year and is projecting a $120m drop in revenues for 2020. In response to the grim figures and projections, it has shed a staggering 50 per cent of its staff.
"NZ Rugby has to lead," the franchise executive said. "That doesn't need to be at expense of anybody but it needs to be that we all have our time in the sun, but we're really clear on what our role is and what it is not.
"You've got some provincial unions that want to be Super Rugby teams and some Super Rugby teams that want to run the world. Everybody has to understand we all have to live in the same sandpit.
"It's not very smart at the moment we're all spending heaps of money on things that could be centralised and we could do better – academies are the most obvious."
Several sources have pointed to the Crusaders' model as the most sustainable. They have what amounts to a joint-venture proposition with Tasman and Canterbury to run their academies, creating clear lines between the levels.
While all the talk of synergies and streamlining between Super Rugby and provincial unions seems obvious, it also comes with a giant caveat: it assumes there will be some form of continuation of Super Rugby and that the NPC will remain an inviolable part of the landscape.
If you were given a blank sheet of paper and asked to create the most efficient flowchart that saw your best players in New Zealand all aiming for the All Blacks, there simply wouldn't be room for both.
Using the principal of Occam's Razor whereby "entities should not be multiplied without necessity", rugby's equation should simply be this:
School → Club (amateur) → Professional League → International.
The problem is how to get there from a starting point of five fully professional franchises with private equity interests; 14 semi-professional unions, the women's game, dual sevens teams and a national body beholden by history and its constitution to 26 provincial unions.
There are no easy solutions and even those at the coalface such as Chiefs chief executive Michael Collins struggle to define exactly who gets absorbed where.
"For my perspective you can't separate rugby in New Zealand. From first XV to club rugby to provincial, Super, All Blacks. We're interconnected. It's one pyramid," Collins said.
"There is no denying we could do things a whole lot better in a whole lot of areas and eliminate the duplication of resources.
"How we do that, whether we do it as a whole across the country, or in our Super Rugby regions, is going to be interesting.
"I'm engaged with the six provincial unions within the Chiefs region and we're working side-by-side on what rugby looks like next year. What do the competitions look like, how can we service the community game, the professional game and academy space for both the men and women?
"From one aspect it's a big, big conversation but it is exciting because we've done things a certain way for a long time.
"We have to make sure we're all working together so the game is sustainable in every pocket in New Zealand. Hopefully there'll be some good outcomes in the next three-to-nine months."
When NZ Rugby douses its burning bridge, works through the immediate pain and eventually forms a more sustainable blueprint, it hopes to strike a deal with offshore private investment to gain significant equity to help fund the game long term.
Early-stage talks have been held with several high-profile firms, including US-based Silver Lake and CVC, the Luxembourg-based outfit who is on the verge of acquiring further influence in the elite Northern Hemisphere rugby scene.
Any agreement here is a long way off but the path towards welcoming further private investment is inevitable.
Just this week, Welsh club Ospreys announced a multi-year, multi-million-pound deal with Asian-based sports marketing group Y11 Sports & Media, who acquired 75.1 per cent.
The success or failure of any similar moves in New Zealand will only be known once details of stakes are revealed. NZR has never been an organisation that has ceded control readily, as can be seen by its halfway-house approach to Super Rugby franchises. Off the back of the long-awaited World Cup success in 2011, NZR offered 49 per cent stakes in four of the five franchises (the Highlanders were not deemed suitable for partial sale at the time).
Diving further down the private investment path, however, brings possibilities in the form of global marketing, technology and potential cross-hemisphere competitions.
New Zealand's Super Rugby Aratipu review is in the data-gathering phase but already there are options on the table to expand the number of Kiwi sides from five to eight, and longer term visions to include teams from the Pacific Islands, Australia and Japan.
There is a growing sense this Asia-Pacific alliance is the future.
Super Rugby has been sold to broadcasters as a 14-team round robin tournament from next year but despite recent protestations from largely-powerless Sanzaar boss Andy Marinos, a general acceptance exists that Covid-19 has killed off those plans and forced NZ, Australia, South Africa and Argentina to map their own futures, for the short-term at least.
As travel restrictions eventually ease, options such as a global Heineken Cup-style champions cup competition, in which the best club sides from each country face off, may materialise.
Covid-19 has also altered the global player market overnight, with European riches fast drying up for southern imports. New Zealanders have and will continue to flood home. The squeeze will hit Pacific Island talent too which, in turn, should see them demanding inclusion in any long-term tournament planning.
"There are so many opportunities out there. Is there a chance for us to engage with our Pacific Island partners? They've long said they want to be in Super Rugby, can we make that work?" Collins said.
"There are more questions than answers. Are the Australian franchises going to keep it local and do they actually want to be in Super Rugby? There's a lot of speculation they're going back to club rugby which, from a high-performance perspective, would be really challenging for the Wallabies."
Japan has long been an enticing prospect, with one source describing a formalised Asia-Pacific League as "rugby utopia" for New Zealand.
The complexities between Japan's national body, which holds titles but little actual power, and the corporations such as Panasonic and Kobe Steel who fund the lucrative domestic Top League teams, remain difficult to align.
From Super Rugby to the PUs, New Zealand already embraces established relationships at all levels with Japanese teams through the exchange of talent and resources. This extends to effectively working together against the north in the contracting space in regards to Beauden Barrett, Brodie Retallick and Sam Whitelock's recent sabbatical deals.
The next step is to somehow include the best of both countries in the same club competition – this time righting the wrongs from the poorly-conceived Sunwolves failure which had no alignment to the Top League corporations.
"From a public interest point of view you take Kobe Steel for example," Collins said. "They have Dan Carter, Brodie Retallick, Aaron Cruden, Ben Smith and Richard Buckman.
"They've got some characters the public would want to watch so there would be appeal in Kobe playing the Chiefs at FMG Stadium. They've got some really good South African players scattered throughout the competition and some Englishman starting to join so they would be challenging games.
"[But] we need to sort out our own backyard before we look further afield."
Japan clearly offers intriguing possibilities – and money.
It has an oversized presence in Super Rugby as it is, and we're not talking about the Sunwolves.
Halo Sports, the agency which has on its books the largest chunk of New Zealand's rugby talent, is owned by Japanese multinational communications giant Dentsu. That company has long eyed a big piece of rugby.
When rugby went professional a generation ago, just weeks after the All Blacks put 145 points on Japan in a World Cup game, it would have been laughable to suggest New Zealand would have one day looked to that country to bolster its national sport.
It's no joke now.