Planet Rugby

Letter of the Week

15th March 2012 13:00

Share:

Planet Rugby mail

Got an opinion? Send us a letter!

Planet Rugby readers are never short of an opinion and our mail box is seldom empty. This week, one of our readers offers the NZRU some financial advice.

Got an opinion? We'd like to hear it, so why not send us an email here.

What can New Zealand learn from Japanese rugby?
By Philip Bailey

The bailout of the Otago Rugby Union approved earlier this week means that the ORU has managed to stave off liquidation as well as potentially an end to 131 years as one of New Zealand's most well supported rugby institutions. It had been announced 3 weeks ago that it was facing $2.35 million in debt, which could have potentially risen above $3 million if it was not dealt with quickly and effectively.

Thankfully the situation has been resolved ( thanks to the Dunedin City Council agreed to effectively forget the repayment of $400,000 it was owed and a $500,000 from the NZRU) and the Otago faithful can rest easy once more, knowing they too will have a team to support in this year's ITM Cup.

Despite this apparent rugby miracle, it is obvious that New Zealand provincial rugby is still in dire straits. Otago are not (and have not been) the only ones suffering financially recently. The plight of many of the smaller unions has been well publicised.

New Zealand may be the reigning champions on the field, but they are falling behind off it. So, what exactly is the problem?

The problem does not lie so much with the Super Rugby Franchises. By and large these are well run with the top players in New Zealand contracted to the National Rugby Union and then leased out to the Franchises (this is partly why the top players are so well distributed throughout the 5 franchises). The problem is with the domestic provincial unions such as Otago, Manawatu, Tasman, Bay of Plenty, Southland and Hawkes Bay.

New Zealand provincial unions have had a problem with putting bums on seats in recent years. Attendances in general have been low, and despite optimism that attendances will rise following recent World Cup glory, a nation with little over three and a half million (spread over a vast landscape) is going to find it difficult/ near impossible to achieve the attendances being seen in the Home Nations, let alone some staggering numbers seen in France. Therefore, they will never come close to earning a similar match day revenue.

This increase in revenue has led to a huge increase in wages being seen in Europe and Japan over the last decade. How can New Zealand unions compete? This is a huge problem for NZ rugby administrators. The reality is that they can't under their current guise. While the lure of the Black jersey has been enough to keep a number of the top players signed on the books of the NZRU, the main problem area has been how the unions have dealt with those on the fringes of Super Rugby selection. Provincial unions have been lured into paying inflated wages for average players to keep their squads looking healthy from the European onslaught.

Otago in particular, who have been pining to return to their glory days, were one of the unions who were a tad over-zealous and naive in this regard. One of the key agreements of the rescue package says as much. It reads that the NZRPA, NZRU and ORFU are to work to reduce the 2012 player contracting spend by $290,000 from the original budget while the NZRU are to also approve all player contracts.

So while it seems Otago have managed to escape what had seemed an inevitably sad conclusion by the skin of their teeth on this occasion, next time the outcome may be less forgiving. Perhaps this is the moment rugby administrators in New Zealand need to have a cold hard look at how business is being conducted.

There is no clear solution (that is for sure). This has been a reality check however and the options need to be looked at. The fact that this situation has appeared at one of NZ's proudest and most historical unions proves that it is a dangerous time for all domestic unions in NZ. While it is difficult to compete financially with European based clubs based using the current business model, there is one other strategy that may provide a brighter future financially, or at least keep these unions safer from disappearing completely, something we would all like to see. That would be private ownership of domestic sides as seen in Japan.

It may seem counter-intuitive, but Japanese rugby is perhaps a model which could succeed. Although they remain a tier two nation internationally, their domestic competition is flourishing both on the field and off it. Key to their success in the domestic market is that they have been able to lure house hold names from around the world to compete with their local talent.

Recently, one can count English International James Haskell and World Cup Winner Ma'a Nonu as world renowned players who have plied their trade in Japan. They have been able to do this because the league is made up of mostly company teams.

They include the Sanyo Wild Knights, Richo Black Rams, Suntory Sungoliath, Sanyo Wild Knights, Toyota Verblitz, Coca-Cola Red Sparks, NEC Green Rockets, Fukuoka Sanix Blues and Toshiba Fuchu Brave Lupus.

While these names may seem rather uninspiring and it may seem even more hideous from some fans to ponder the existence of a Hitachi Highlanders at the Forsyth Barr Stadium, this may be the future.

A look at most professional sports around the world shows that the teams which prosper the most are the ones who are privately owned (most premier league football teams, basketball and NFL sides) or at least have ownership shared amongst their fans (for example FC Barcelona).

This is not a guaranteed solution, but a glance at the balance sheets of most provincial unions in New Zealand proves that alternatives need to be looked at.

For more on what Philip Bailey has to say, check out his blog: www.dumptackle@blogspot.com

Forthcoming Fixtures
FixtureDetails
All times are local
Aviva Premiership
Friday , November 21
Harlequins vs Sale SharksHarlequins vs Sale Sharks Preview
Newcastle Falcons vs GloucesterNewcastle Falcons vs Gloucester Preview
Saturday , November 22
Exeter vs Wasps15:00
London Irish vs Bath15:00
Sunday , November 23
Saracens vs Northampton13:00
London Welsh vs Leicester Tigers15:15
More Aviva Premiership fixtures
International Match
Saturday , November 22
Italy vs South AfricaItaly vs South Africa Preview
Scotland vs TongaScotland vs Tonga Preview
Ireland vs AustraliaIreland vs Australia Preview
Wales vs New ZealandWales vs New Zealand Preview
England vs SamoaEngland vs Samoa Preview
France vs ArgentinaFrance vs Argentina Preview
More International Match fixtures
Guinness PRO12
Friday , November 21
Dragons vs MunsterDragons vs Munster Preview
Scarlets vs Glasgow WarriorsScarlets vs Glasgow Warriors Preview
Connacht vs ZebreConnacht vs Zebre Preview
Ulster vs OspreysUlster vs Ospreys Preview
Sunday , November 23
Treviso vs Leinster14:30
Edinburgh vs Cardiff Blues16:00
More Guinness PRO12 fixtures
Recent Results
FixtureDetails
All times are local
Aviva Premiership
Sunday , November 16
Leicester Tigers 21 - 21 SaracensLeicester Tigers vs Saracens Report
Wasps 71 - 7 London WelshWasps vs London Welsh Report
More Aviva Premiership results
International Match
Ireland 49 - 7 GeorgiaIreland vs Georgia Report
More International Match results
Aviva Premiership
Saturday , November 15
Sale Sharks 36 - 8 London IrishSale Sharks vs London Irish Report
Bath 23 - 14 Newcastle FalconsBath vs Newcastle Falcons Report
More Aviva Premiership results
International Match
Romania 13 - 18 JapanRomania vs Japan Report
France 29 - 26 AustraliaFrance vs Australia Report
Scotland 16 - 24 New ZealandScotland vs New Zealand Report
England 28 - 31 South AfricaEngland vs South Africa Report
Tonga 40 - 12 USATonga vs USA Report
Wales 17 - 13 FijiWales vs Fiji Report
More International Match results
Aviva Premiership
Friday , November 14
Gloucester 15 - 22 HarlequinsGloucester vs Harlequins Report
Northampton 18 - 24 ExeterNorthampton vs Exeter Report
More Aviva Premiership results
International Match
Italy 18 - 20 ArgentinaItaly vs Argentina Report
Canada 13 - 23 SamoaCanada vs Samoa Report
More International Match results
LV= Cup
Cardiff Blues 19 - 13 Scarlets
Ospreys 35 - 51 DragonsOspreys vs Dragons Report
Sunday , November 9
Wasps 43 - 22 London Irish
London Welsh 9 - 18 Gloucester
Leicester 29 - 13 Sale SharksLeicester vs Sale Sharks Report
More LV= Cup results
International Match
Saturday , November 8
Italy 24 - 13 SamoaItaly vs Samoa Report
Wales 28 - 33 AustraliaWales vs Australia Report
England 21 - 24 New ZealandEngland vs New Zealand Report
Georgia 9 - 23 TongaGeorgia vs Tonga Report
Ireland 29 - 15 South AfricaIreland vs South Africa Report
More International Match results
Aviva Premiership Table
PosTeamPPts
1Northampton726
2Exeter724
3Bath724
4Saracens724
5Wasps720