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Rugby unions continue to make gains

8 August 2014

Rugby unions continue to make gains

Deloitte State of the Unions report shows largest combined surplus recorded

The ITM Cup rugby unions have achieved a combined annual surplus of around $3.2 million, up from $0.5 million the previous year and the largest collective surplus recorded, according to the third edition of the Deloitte Sports Review “State of the Unions” report released today.

The report examines the annual financial accounts of the 14 semi-professional and amateur rugby unions competing in the ITM Cup. It shows that there has been an overall improvement in financial performance in 2013, delivering a second straight collective surplus on the back of positive results for each of the 14 unions.

The combined revenue earned by the 14 ITM Cup playing unions was $69.1 million for the 2013 financial year (FY13). This was a $2.1 million (3.2%) increase over the FY12 results, but still down $7.5 million (9.8%) from FY09 revenue.

Deloitte partner Grant Jarrold says that the collective surplus is due to an ideal combination of increased revenue and decreased costs, putting the ITM Cup rugby unions in a solid financial position for the future.

“These results represent a solid turnaround for the unions over the past few years. They have collectively sidestepped their way out of some of their past financial challenges and can now focus on continuing to enhance the match day experience for the fans and increasing the support base from local communities. It would appear that fiscal prudence and governance have improved and this can only bode well for the future of our national game at all levels,” says Mr Jarrold.

Operating expenditure has decreased marginally by approximately $84,000 over the past year to $65.7 million. This is down $15.7 million since FY09, a 19.3% decrease over the past 5 years. The breakdown of expenses for FY13 was 47.2% for team and match related costs, 31.9% for growing the game and 20.9% for administration.

According to Mr Jarrold, despite the decrease in costs there are assuring signs that the grass roots rugby community continues to be a focus.

“The unions collectively invested more than $20 million in growing the game in FY13, an increase of $1.2 million from the previous year, supporting the future of New Zealand’s favourite game,” he says.

“While the FY13 results are exceptional, the unions need to continue their financial focus and look ahead towards taking advantage of their current positions. In order to maintain their newly found financial confidence and viability, unions must continue to explore new opportunities in order to ensure the long-term future success of the game,” concludes Mr Jarrold.

Other highlights from the Deloitte Sports Review State of the Unions report include:

• 15.8% of total FY13 revenue is from match related income, 66.7% is from grants & sponsorship, and 17.5% is from other revenues such as administration fees.
• Match related income has increased for the second straight year, growing by $1.3 million (13.9%) from FY12 to FY13, while revenue from grants & sponsorship has increased by $0.5 million to $46.1 million over the year.
• Income from grants & sponsorship continues to be heavily reliant on contributions from New Zealand Rugby and grants from gaming trusts.
• The five provincial unions with professional Investec Super Rugby teams based in their main cities generated 49.8% of total revenues of all unions in FY13.
• Administration costs have decreased by 4.5% from FY12 to FY13.

The full State of the Unions Deloitte Sports Review can be found at www.deloitte.com/nz/stateoftheunions.

About Deloitte in New Zealand
Deloitte New Zealand brings together more than 1000 specialist professionals providing audit, tax, technology and systems, strategy and performance improvement, risk management, corporate finance, business recovery, forensic and accounting services. Our people are based in Auckland, Hamilton, Rotorua, Wellington, Christchurch and Dunedin, serving clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with ambition to grow.

Deloitte provides audit, tax, consulting and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

For more information about Deloitte in New Zealand, go to our website www.deloitte.co.nz.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/nz/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

ENDS

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