NZ Rugby puts out feelers for Japanese corporate sponsor   23 Apr 2015

Suze Metherell

NZ Rugby puts out feelers for Japanese corporate sponsor ahead of 2019 Cup

April 23 (BusinessDesk) - New Zealand Rugby, the national sports administrator, is putting out feelers for a Japanese corporate sponsor, betting that the debut of rugby at the Rio Olympics next year and Japan's hosting of the Rugby World Cup in 2019 will stoke interest in the game.

At the union's annual meeting in Wellington today, chairman Brent Impey said the board was working to maximise revenue to invest in the national sport. Chief executive Steve Tew said sponsorship opportunities in Asia were on the union's mind, particularly given as Japan's Cup hosting rights.

"We still hold an ambition to have a significant commercial sponsorship relationship with a Japanese company," Tew told the meeting. "We've made a number of offers to help around 2019 but that is led by World Rugby and we've got to be very respectful of that relationship. We certainly hope that the opportunity both the World Cup and the Olympics present rugby in Japan will give the game a huge boost and we'd like to be partnering with whoever we can to ensure that is the case."

Last year NZ Rugby renewed its sponsorship deal with Lion, the maker of Steinlager, which is ultimately owned by Japan's Kirin Holdings.

Earlier this month, the organisation posted a 86 percent drop in annual profit to $373,000. Income rose 3.2 percent to $120.8 million, while costs increased 5.3 percent to $120.2 million. Cash reserves were little changed at $62.6 million, from $63.7 million a year earlier.

Impey told the meeting it was a "modest result" but "underlines the fundamental fact that we're making substantial investments for the good of the game."

NZ Rugby returned to profitability in 2013, after posting annual losses since 2008. The organisation has focused on ways to make the game more profitable, including the sale of Super franchises, as provincial unions face the squeeze from dwindling attendance and, in some cases, poorly managed finances.

The national sporting administrator wants the sport to be financially self-sustaining across all levels by 2016. To help achieve that, it plans to build a shared service model for back-office functions and create real-time reporting and forecasting tools for all provincial member unions to use. The national union is also reviewing funding of the provincial unions.

"We know the challenges to grow commercial revenue, we know to get more fans through the gate and contain costs are ever present for all of us," Impey said. "This organisation is acutely conscious of the tough environment you provincial unions face and the role we must play to support your good work to safe guard our game."

Last year, Sky Network Television, New Zealand's dominant pay-TV company, signed a conditional contract to renew its five-year deal from 2016 with the NZ Rugby and the SANZAR unions for an undisclosed amount, and the final sign off was expected soon, the union said today. The rugby union gets almost three quarters of its income from commercial contracts, including broadcast and sponsorship deals.

"Broadcasting income is obviously a significant proportion of our revenue, and a key component to our long term financial security," chief executive Tew said. "The increase in income will certainly help in terms of supporting the game our success in recent years has allowed increase in funding to provincial unions."

Jannine Mountford, chief financial officer told the meeting that the union's bottom line was hurt by a one-off loss of $202,000 after hosting the junior world championships in Auckland last year. There was also a $1.2 million payment from the Australian Rugby Union, after the SANZAR partners agreed on compensation for the South African and New Zealand unions after not hosting the British and Irish Lions during 2014.

The union also booked a $8.2 million in foreign exchange gains, as New Zealand dollar appreciated against other currencies, and in particular the euro, which Mountford said they'd hedged at 42 cents, while the New Zealand dollar recently traded at around 71 euro cents. She expected the benefit of the union's hedging to flow through into 2015.

(BusinessDesk)

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