Rugby: Expanding horizons point to US, Asia

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From having close to $80 million safely banked in 2005, the New Zealand Rugby Union's reserves are now down to $35m and there is no more pressing issue than boosting income.

Invading foreign markets remains the preferred route - from 2014, expect to hear talk of Super Rugby expansion into the United States and Asia that will form part of an integrated strategy to help these nations build a sustainable presence on the world stage.

Altruism is not the driver - the NZRU wants to access the corporate machinery of these massive economies but has finally realised that, to do that, it will need to do more than just drop the All Blacks in for occasional tests.

If the US, Japan and wider parts of Asia are to become serious rugby nations, then the NZRU is going to have to provide them with players, coaches and intellectual capital.

The NZRU accepts that it needs a new big idea, a more integrated commercial strategy that brings a massive boost in revenue - money needed to keep players here.

The NZRU's last big idea was to play Bledisloe Cup tests offshore at neutral venues.

It didn't really work - a moderate success in 2008, the income returned from Tokyo in 2009 was less and last year the Hong Kong test was lucky to break even.

Last week's announcement about the revamped Bledisloe where a third test will be played in Australia in 2012 and in New Zealand in 2013 confirmed that the neutral venue option has been canned for now.

It will come again from 2014 but, when it does, it will be part of an integrated package that will see more than just a one-off test being played offshore.

If Asia and the US are ever to become genuine commercial markets for the NZRU, then they need to have a Super Rugby presence.

Sending the All Blacks in for one-off tests hasn't proven a successful means of engaging a new audience; of growing fan, broadcast or sponsor interest in Asia.

NZRU chief executive Steve Tew says Super Rugby expansion into these territories remains on the agenda and will climb higher if and when the South Africans get the go-ahead to enter the Southern Kings.

The Kings could come on board as early as 2013 and it will create issues for the balance of the competition.

The conference system will be further compromised if the South Africans have six teams and the Australian and New Zealand formats, five.

Neither New Zealand nor Australia has the player resources to cater for a sixth team and the former would certainly be challenged trying to find corporate sponsors.

If there is to be expansion, it has to be offshore - a team based in Asia and or the US.

The US, in particular, has made giant strides in the past five years. A recent survey showed it is the fastest growing rugby nation in the world and is likely to have more than 100,000 registered players by the end of the year.

US Rugby chairman Kevin Roberts, a former NZRU board member, is convinced that the NZRU and other major nations have to start forging closer and structured relationships with his organisation.

"Commercially, rugby's future is in the US," says Roberts. "All of the IRB major sponsors have business interests in the US. USA Rugby is developing professionally and sensibly but obviously is restrained in terms of its pace of growth by economic realities.

"What we need is access to a superior competition and until we can start playing in either Super Rugby, (via a West Coast franchise), the Magners League (East Coast), or the Six Nations (funded partially by the IRB), then it will be difficult for us to progress at the pace the game needs."

Much of the next two years will be spent trying to establish the detail of any expansion and determining how flexible the national body can be. Ideas such as allowing young New Zealanders to play for a US or Japanese franchise but remaining eligible for the All Blacks have already been floated.

The Rebels have shown it's possible to build a team with an almost equal mix of local and imported talent. It has worked in Melbourne, so why not Los Angeles, Boston, or Tokyo?

Rather than have promising talent head to Europe and kill their All Black dreams, why not allow them to be well-paid marquee players in the US in a competition the All Black selectors watch and remain eligible for their country?

The NZRU could also insist on having coaching and medical control of any US or Japanese franchise.

NZRU total revenue has been largely static since 2006, yet the All Blacks have played more tests. The existing model is running to a standstill.

Without an improved commercial strategy, the national game here will be in danger of being swamped by Europe and Japan, where the game is now underpinned by an indestructible financial base.