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Provincial Rugby’s Finances Pronounced Match Fit

Provincial Rugby’s Finances Pronounced Match Fit

Mitre 10 Cup rugby unions achieve largest collective surplus of the past decade

After stumbling last year, the Mitre 10 Cup rugby unions have combined to post the largest surplus in a decade for the 2016 financial year (FY16). This is according to the sixth 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 Mitre 10 Cup. It shows a combined collective surplus of $3.5 million for FY16. The result is a material turnaround from the $1.4 million combined loss in FY15, and is the largest collective surplus recorded in the last decade.

All of the 14 unions individually posted surpluses and 12 of them managed to better their financial results from FY15.

Deloitte partner Grant Jarrold says this outstanding financial performance shines the light on improvements made by the country’s leading rugby unions.

“The unions are now in a position to take advantage of their hard work to develop and implement refreshed game plans to secure a viable future for the nation’s favourite game,” says Mr Jarrold.

“As not-for-profit entities, the unions are not expected to record large surpluses, however given a significant increase in revenue in FY16, retaining the surpluses in this initial year makes them significantly more financially stable.”

The combined revenue earned by the 14 Mitre 10 Cup playing unions was $78.2 million for FY16, up $11.8 million (17.8%) from FY15.

Of the three components making up total revenue – grants and sponsorships, match related income, and other revenue – grants and sponsorships revenue saw the largest increase in dollar terms, growing to $56.1 million in FY16 from $48.8 million in FY15, an uplift of 15.1 percent. Match related income, while the smallest source of revenue, had the largest percentage growth, increasing 40.2% from $5.8 million in FY15 to $8.1 million last year.

Consistent with previous years, revenue from the five provincial unions with Super Rugby franchises based in their home cities accounted for almost half (48.0%) of the total revenue for the combined unions.

Total operating expenditure for FY16 increased to $73.4 million in FY16, up 9.4% from $67.1 million in FY15. Fortunately, this increase in expenditure was more than matched by the 17.8% increase in revenue during the year.

Mr Jarrold notes that expenditure has increased across all three categories Deloitte analysed; team and match related costs, growing the game and administration.

“The positive takeaway is that the largest increase in expenditure, in both percentage and dollar terms, was in the growing the game category,” says Mr Jarrold.

“This reflects that increases in revenue was reinvested back into grassroots rugby. Spending on this catgeory increased by $2.9 million, the largest year-on-year increase since we began doing this annual review,” he adds.

FY16 saw a substantial increase in grants to the unions from New Zealand Rugby, made possible by a significant increase in broadcasting revenue.

“We expect this increase in grant money, to be used to invest in the development of the game at the grassroots level, will continue in the foreseeable future,” says Mr Jarrold.

“However, the unions still need to remain vigilant with their spending. After all, they are the current caretakers of the game and with that comes the responsibility to ensure that funds are spent purposefully, and are aligned to the strategy of growing the game in the community,” he concludes.

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

• For the third year the State of the Unions report looks at the financial performance of the twelve Heartland Championship unions. This year, for the first time, all Heartland unions have posted a surplus. Overall, the surplus has increased by an outstanding 291.5% in FY16 to a combined $622,000 from $159,000 in FY15.

• Player registration numbers for the Mitre 10 Cup unions have been gradually trending upwards since 2010. In FY16 player registrations increased by 3.6% and across all age groups. The number of female player registrations increased by more than 2,100 registrations (up 13.7%).

• Social media continues to develop as a key channel for unions to engage with their supporters. Overall, Facebook likes increased 12.1% and Twitter followers grew by 5.0%. Instagram saw the greatest increase in percentage terms as the unions’ followers grew by 45.8% over the year. Over the past two years, Instagram followers of the unions have grown from 16,500 to over 85,000.

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


ENDS

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