KEY POINTS:
Christmas came early for New Zealand's 26 provincial rugby unions today although the message from the New Zealand Rugby Union (NZRU) wasn't a jolly one.
In the face of the world economic downturn, the NZRU board today forecast a $7.5 million surplus for 2008.
Almost all of it is to be distributed to the provinces in a three - pronged aid package:
* The NZRU will immediately inject every union with a one-off payment of at least $150,000, the equivalent of their quarterly core grant distribution.
* It will cover about 75 per cent of the unions' costs of paying All Blacks players, recognising the limited role they play in the Air NZ Cup.
* A $1 million support fund will be set up to assist unions with long-term structural changes.
He was neither bearded nor clad in red but NZRU chief executive Steve Tew could have been excused for issuing a hearty "ho ho ho" today.
After two years of losses, the calendar year turnaround was based largely around the cashing up of successful foreign exchange transactions.
There were also gains made from "extra" revenue sharing All Blacks matches, against Australia in Hong Kong and against Munster.
Also, the recent multi-million dollar deal with All Blacks' sponsor adidas had sent confidence through the halls of the NZRU's Wellington headquarters, where are reserves of about $80 million.
"Given we will be adding $7.5 million to our already strong position, we feel it is appropriate to make some contribution to the unions," Tew said today.
"We realise it doesn't solve everybody's problems. The world is still tough out there.
" The reality is that they (provinces) are going to have to work extremely hard within their communities, their fans, their sponsors to ensure they have a sustainable business."
Tew said several unions had approached the NZRU in recent weeks voicing financial concerns while "three or four" that Tew wouldn't identify had "serious cash flow challenges".
The Air NZ Cup was in danger of going down the same path as several other financially strained sporting competitions unless provinces addressed their cost base, Tew said.
With crowd numbers and sponsorship figures falling, few were immune from money difficulties.
"Given two of the biggest unions (Auckland and Canterbury) have the additional challenge of operating this year and next with only half a stadium, there probably isn't a union in the country that isn't challenged to some degree," he said.
"What is not sustainable is 14 teams in the current cost structure. How many teams we have in the future is yet to be determined.
"If the economic conditions get tighter, that decision may be brought forward."
Other smaller measures have been introduced to ease financial pressure on unions include relaxing some Air NZ Cup criteria.
Examples include not having to take a team doctor for away matches, not having to employ a full time manager and relaxing the requirement for certain stadium facilities.
- NZPA
