The New Zealand Rugby Union's plans to revamp its domestic competitions hit a heavy tackle yesterday when it gained only partial approval from the Commerce Commission.
The commission said it would give conditional approval only to the NZRU's application to introduce a $2 million salary cap for the 14 provinces
contesting the inaugural Air New Zealand Cup competition this year, but would not authorise player arrangements in division one, where players are to be unpaid and the union wants to ban provinces using loaned players.
The commission said it would conditionally authorise the salary cap and seek submissions up to April 3.
It hoped to release a final determination on June 26, a month before the new competition starts.
It said the NZRU argued its rules for the division one competition addressed cost issues facing smaller provincial unions, and ensured funds were spent on development and promoting an amateur, community-based competition.
But the commission said it considered the arrangements would be costly to administer and enforce, deter some players who could not afford to play for free without compensation for lost income, cause unions to lose the benefit of using loan players and remove an avenue for players to progress to higher levels.
Commerce Commission chairwoman Paula Rebstock said the commission was aware that arrangements governing rugby were of great concern to many New Zealanders.
"That underscores the importance of ensuring that the public benefits promised would be realised, and would be substantial enough to warrant the authorisation of an anti-competitive arrangement."
NZRU deputy chief executive Steve Tew was still in the process of taking in the commission's 207-page findings.
He acknowledged a clock was ticking with the Air New Zealand Cup to start in late July and division one the following month.
"The timeframe is tight and we have been very aware of that throughout this process."
- NZPA
