Rugby: Gregor Paul - New Zealand Rugby's $12m king-hit, and the mad idea which could save them

New Zealand Rugby chief executive Mark Robinson. Photo / Photosport

OPINION:

Among all the unknowns that are clouding the rugby landscape, the possible impact on finances is the one that will slowly become of greater concern.

New Zealand Rugby's balance sheet, having suffered an almost $19 million operational loss in 2020, was forecast to partly recover this year by posting income of $206m, but is now facing a few heavy blows that will dent and bruise it.

How much damage is ultimately inflicted depends on what resolution is reached with the Rugby Championship and if it is cancelled entirely – a possibility that can't be ruled out given the logistic barriers and the prospect they move again – NZR's balance sheet will have to try to absorb what could be a king-hit with considerable destructive power.

The national body has resigned itself to the fact it has lost millions of dollars already on lost ticket sales.

A schedule that had nine home tests was cut to just five and from NZR having an initial forecast earlier this year that they would likely sell about 300,000 test tickets in 2021, the actual number finished at about 117,000.

Exactly what sort of impact this will have on profitability is hard to guesstimate, but the lost income is likely to be in excess of $12 million, if not higher.

Shifting those games offshore has damaged the balance sheet, but the impact of those games not being played at all will dramatically increase the financial pain as that would come with a massive loss in broadcast income.

A $12m hit could easily become $25m, if not more, and the $206m of revenue forecast, could drop to around $175m.

Which is why the best-case scenario now, hard as it may be to grasp given the Covid-19 chaos that reigned last year, is that the Rugby Championship is played in the UK.

The All Blacks and Springboks were set to face off in two home tests this year. Photo / Photosport

It might sound mad for four Southern Hemisphere nations to pack up and head north to play their showpiece tournament, but that has to be less mad than going to South Africa which is also on the shortlist to host.

The UK and France are open for business – heavily vaccinated and operating without crowd restrictions or quarantine requirements, although an exemption will be needed to get the Boks and Pumas in because South Africa, where both teams are, is deemed high-risk.

Going to the UK - which has made it clear that it is going to live with Covid and won't suddenly lock down even if infection rates climb - is a better idea than trying to make the Rugby Championship work in Australia – competing for stadia with both the NRL and AFL and with so little certainty about state border policies, crowd restrictions, and possible lockdowns.

Queensland is making good noises about being a viable host, but however flexible its officials are willing to be to accommodate the Rugby Championship, the prospect of a Covid outbreak and a subsequent inability to play tests is high.

The players from all four nations are resigned to being on the road for the remainder of the year and whether they are in Australia or the UK hardly matters as wherever they are in the world, they know they won't have access to their families - and in the case of the All Blacks, they also know once they leave these shores, they can't come back to their long-booked MIQ spots until late November.

The UK provides a level of certainty and stability that Australia and South Africa don't and that's critical not just from a health and safety perspective, but from a financial point, too.

NZR needs the Rugby Championship to be played to avoid taking a second successive major financial loss – one that would force them to dig harder yet into their cash reserves and weaken their long-term security.

Some income is likely to be clawed back by playing the USA in Washington DC and Wales in Cardiff – games that are expected to go ahead regardless of what happens with the Rugby Championship.

Both these tests have been agreed on financial terms where NZR is expected to net anything between $2m-$3m per test, irrespective of ticket sales.

But the financial cost of a cancelled or severely disrupted Rugby Championship wouldn't be confined to the balance sheet.

New Zealand Rugby chief executive Mark Robinson. Photo / Photosport

There would be a non-tangible impact of the international game, for the second successive year, having no real sense of drama, occasion or conclusion.

Specifically, the world needs to see the All Blacks play the Springboks this year and see where supremacy really lies. That's the contest that excites and one that will give the best indication of how the All Blacks are really tracking.

Rugby needs an epic encounter – something that showcases the sport at its best after the big-ticket item, which was the British and Irish Lions tour, spectacularly failed on the field and descended into a nasty, farcical circus off it.

Shifting the Rugby Championship to the UK and France is the best means by which NZR can be protected against the financial risks it faces.