Explainer: NZ Rugby’s Financial Loss And What It Means

Thursday, 8 May 2025, 6:00 pm
Article: RNZ

Jamie Wall, Digital Sports Journalist

Analysis: New Zealand Rugby (NZR) has posted its financial results and instead of an appropriate all black, it's in the red. A $19.5 million loss has been announced and while it's obviously not ideal, there's a bit more to it than presuming it's been spent on magic beans and that the last one out of NZR headquarters in Wellington shouldn't forget to shut off the lights.

How many financial losses in a row is this?

NZR posted a loss of $47m for 2022, then an $8.9m loss for 2023. So it's not uncharted territory but not the course they want to be heading in either.

So where's it gone?

The $19.5m is a lot of money but it drops significantly when the strategic commercial spend is taken out. It's estimated that accounts for around $11m, with the rest being 'non-operational losses' due to the downturn in the US dollar affecting the value of NZR's hedge instrument holdings. Because of the early contract termination and non-payment by INEOS, the hedges have been deemed to be ineffective.

What is the commercial strategy?

That $11m has more or less gone on NZR+ and content creation, as part of a $38m investment over a four-year period. NZR+ is the direct to consumer content service, which offers access to both original content and match highlights. It has been seen as being a bit of a bust so far with a less than anticipated sign-up rate (despite being free) and subsequent pivot to distributing on YouTube and other social platforms, as well as New Zealand Rugby Commercial Limited (NZRC) boss Craig Fenton leaving after just over a year in the role.

That's all fair criticism but NZR basically has to get into this space if it wants to be relevant in new markets as a global sports brand - it just needs to figure out the best way to make it work. Whether detractors like it or not, major US teams, Premier League clubs and others have been running the same model for almost three decades and even local grassroots teams are producing their own content now. It's fair to say that the feeling that NZR is a part-production company is only going to grow, rather than diminish.

What about total income

This is where NZR can claim a good kind of record, because income is at $285m. That's its highest ever and is reflective of last season being a full domestic schedule for the All Blacks, including a very successful 'home' test match staged in San Diego against Fiji. Positive revenue-sharing agreements with the JRFU and RFU meant decent money was made on tests against Japan and England, with the San Diego financial model set to be repeated for this year's test against Ireland at Soldier Field in Chicago.

How does this compare to other national unions?

Despite the $19.5m loss, NZR's reserves have only taken a $500,000 dent down to $174.5m. For what it's worth, it can boast the highest reserves of any major union*, with over $55m more than England.

The RFU infamously announced an $88m loss on last season, despite being the largest revenue generator by far (due to its ownership if the 82,000 capacity Twickenham Stadium). So this is where it gets difficult to compare unions' financial performance to one another. Another example is Rugby South Africa turning a modest profit, however in its post-Covid existence it virtually runs only the world champion Springboks, with a large percentage of them employed offshore to play their club rugby.

The closest to home comparison is Rugby Australia, which has just reported a $39.6m loss last year. Of that, $10m was integrating the Brumbies and Waratahs under its management and more than $5m on the voluntary administration and exit of the Melbourne Rebels - again, a series of events that would never impact NZR.

Sponsorship

This is where things are going quite nicely for NZR. Even though INEOS walked out, the swift resolution has seen it carry on as if nothing really happened.

NZR announced this week that Toyota have come on board a brand partner. That's not only well ahead of schedule - some forecasts were that an announcement on a replacement for INEOS wouldn't be till next year - but further legitimises the All Blacks as a blue chip given that Toyota is a global brand with exceptional market share and history in New Zealand. It is widely expected NZR will go back to the table when Altrad's front of jersey sponsorship deal ends in 2028 with the ability to demand an even higher amount than the $120m they signed on for in 2022.

So should we expect this to continue?

You'd hope not, but it's not like this is some sort of death knell to the national game. Player numbers still remain high at 157,000, also rugby's broadcast deal and viewership is by far the highest of any sport in the country. There are legitimate concerns about crowd sizes for everything below test level, despite the overall Super Rugby Pacific attendance being up on last season. However, All Black test matches remain an extremely bankable drawcard. Fixtures in Dunedin and Hamilton against a supposed weakened French team have already sold out, while September's clashes against the Springboks and Wallabies at Eden Park will fill the country's largest stadium twice in a matter of weeks.

Those won't bring in anywhere near the sort of gate receipts that somewhere like Twickenham can command, so expect more American and Japanese 'home' tests regularly. The big question is around the commercial strategy and when it can start to recoup the investment that's being ploughed into it.

*This data set excludes France, whose exact financial details are very difficult to pin down. However, given that the FFR just announced it had lost almost $60 million due to "major failures" in its hosting of the last World Cup, it is safe to presume that NZR would still be on top of this column anyway.

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