|NZRU Announce RWC Profit Boost|
Friday, 13 April 2012 09:37
Financial gains from staging the World Cup in 2011 has driven a NZ$9.6 million ($7.9 million) profit for the New Zealand Rugby Union in 2011, helping erase an almost identical loss from the previous year, it has been revealed.
The NZRU made profits of NZ$13.4 million derived from hedging arrangements to cover the NZ$108 million World Cup hosting fee, with revenues derived from ticket sales booked in local currency.
The NZRU’s figures have been announced after the International Rugby Board (IRB) last month insisted that New Zealand’s staging of the World Cup exceeded expectations, after revealing encouraging initial financial results for the competition. Tournament owners Rugby World Cup Limited (RWCL) said New Zealand 2011 was on track to achieve a net surplus of more than £90 million, £10 million more than previous estimates, making it the second highest revenue-earning event in the history of the tournament.
Gross commercial revenues of £142 million were within 3% of the total achieved for the record-breaking France 2007 event. The IRB said the figures were a major achievement for the tournament, which took place amidst the global economic downturn in a smaller domestic marketplace and in a non-European timezone. “The bottom line actually is that we think at the end of 2011, we've delivered a very successful rugby World Cup in this country,” NZRU chief executive Steve Tew told Reuters.
“Obviously the team has done the job for us and the investment that we said we would make in it has come out exactly where we thought it would be, so from that point of view, we're pleased,” Tew added, referring to the All Blacks’ victory on home soil. However, the NZRU is expecting a challenging 2012 with its unions experiencing financial difficulties. The Otago Rugby Union has been the most high-profile victim and the NZRU last month moved to erase part of its debt, reported at NZ$2.35 million, and lend it an additional NZ$500,000 to survive.
With 10 of the 14 teams in the provincial competition reportedly surviving on cash grants from charitable trusts and the NZRU, Tew is aware that New Zealand rugby faces hard times ahead. “A number of unions have turned around quite significant deficits and posted modest profits for 2011,” he added. “The environment continues to be incredibly challenging and we're going to have work very hard to survive. That's the reality for all small businesses right at the moment and right through the Western world.”