New Zealand Rugby faces financial hole despite Gallagher’s sponsorship – Gregor Paul

THE FACTS

• New Zealand Rugby faced a potential $50 million deficit in 2026 because of sponsorship and broadcast issues.
• It secured compensation from Ineos and new deals with Toyota and Gallagher, improving its financial position by $20m-$25m.
• However, uncertainty remains over future media rights, with Sky refusing to increase its $85m offer.

Earlier this year, New Zealand Rugby was facing the prospect of a $50 million hole appearing in its accounts in 2026 because of a loss of sponsorship, reduction in broadcast income and an increased payment liable to equity partner Silver Lake.

The national body had learned in early January that British petrochemical firm Ineos was terminating its $20m-a-year sponsorship – it had naming rights to the All Blacks’ training tops and shorts.

It had also received, in early December, a vastly reduced offer of about $85m a year from its broadcast partner Sky to renew its five-year media rights, an offer that was about $25m less than the existing deal that runs until the end of 2025.

And it knew that Silver Lake would be able this June to convert its $262m investment (it currently operates as a loan) in New Zealand Rugby Commercial – the company set up to house the game’s revenue-generating assets – to a 7.5% equity share.

That shift will likely mean the annual payment made to Silver Lake climbs from around $12m a year to about $15m.

An air of positivity was projected publicly by New Zealand Rugby (NZR) that the predicted black hole would never eventuate, but behind the scenes there was a level of angst about the situation and whether it could be fixed.

But it has taken NZR just five months to strike three major victories, all of which have gone some way towards staving off financial catastrophe in 2026.

In quick succession, it struck a compensation deal with Ineos – the terms of which have been kept confidential but are believed to have resulted in the British firm paying the $20m it would have spent on sponsorship this year, plus a small additional payment to cover the inconvenience of unilaterally breaking a contractual agreement without solid grounds to do so.

Then NZR signed Toyota as a replacement sponsor, it has bought naming rights to the All Blacks’ training tops, with US insurance brokerage Gallagher coming on board this week as the new naming rights holder on the back of the All Blacks’ shorts.

Between the two, NZR has banked the same value it had when Ineos owned both properties, and having also banked the compensation payment from the petrochemical giant, the national body has likely ended up between $20m and $25m better off than it was anticipating back in January.

The speed at which it replaced Ineos combined with the ability to extract a meaningful compensation payment has gone some way to ensuring there is a smaller hole in next year’s accounts.

But the situation with future media rights is no clearer now than it was in January, and as the clock ticks down, the prospect of NZR striking a surprise deal with British streaming platform DAZN, as was being speculated in March, becomes increasingly unlikely.

If DAZN ever was a real prospect of usurping Sky and taking over the rights to screen All Blacks tests in New Zealand next year, it probably isn’t now because the timeframe to set up the logistics is unrealistically short.

And without a competitive threat to use as leverage, it’s difficult to see what levers, if any, NZR has to pull in its quest to induce an uplift in the $85m offer.

Sky has refused to budge on price, partly because it is on an austerity drive to rein in production and content acquisition costs, and partly because it feels it needs to strike what could be considered a revenge deal after the way the previous contract negotiation with NZR played out.

There is still some sense within Sky that it needs to redress the events of 2019, when NZR used the threat of Spark Sport to leverage the price.

Sky had initially offered $80m a year but after Spark Sport unexpectedly won the rights to live cricket, NZR spotted an opportunity to pounce on its long-term partner’s vulnerability and ramp up the price it wanted to sell the rugby rights for.

The price agreed was $111m a year, a figure that meant Sky was going to spend more on buying content rights than its market capitalisation at the time.

Having refused to budge on price for the past seven months, it seems unlikely that Sky is going to cave in – especially now the threat of DAZN has seemingly all but disappeared – and that leaves the question of whether NZR can find a way to retain its existing broadcast income into 2026.

There is, therefore, a danger that the gains NZR has made by adding to its sponsorship income could be offset by losses in broadcast revenue.

It may be the projected $50m hole is only partially plugged as it seems almost certain that NZR is going to have to accept a significantly lower fee for selling its content rights domestically.

Sky doesn’t have any incentive or rationale to budge on price, and NZR’s only hope of bolstering its broadcast income is to strike significantly improved deals in offshore markets and to hope the new Nations Cup competition, which launches in 2026, carries the appeal the organisers say it will.

But even then, NZR needs to find about $25m a year in offshore and Nations Cup rights – a tall order given that it is believed the British, European and Asian rights to the Rugby Championship were sold collectively in the current deal for about $5m annually.

NZR’s financial prospects look considerably better than they did five months ago but the danger of a shortfall in 2026 remains.

Gregor Paul is one of New Zealand’s most respected rugby writers and columnists. He has won multiple awards for journalism and written several books about sport.