Rugby and professionalism

The professional rugby era has not been kind to New Zealand.

We have tried to box above our weight in the notoriously difficult business of professional sport, under the illusion that because we have the most prolific and successful player nursery in the world, professionalism was a natural progression.

It hasn't been, as is evident by news the Otago Rugby Football Union is the latest in a growing list of provincial unions in dire financial strife.

All provincial unions are weighed down by debt, high player wage costs and a public bored by nine-month saturation coverage of our national game on television.

This has forced Tasman, Manawatu, Bay of Plenty, Southland, Counties and now Otago to go cap in hand to the New Zealand Rugby Union.

The NZRU's response has been reactive - prop them up with loans, install a "change manager" and largely carry on as usual - but the reality is the business model is broken.

The NZRU is looking to offload responsibility for operating four of the five New Zealand Super franchises, and the collective agreement with the New Zealand Rugby Players' Association has been renegotiated, lowering the salary cap from $2 million to $1.35 million, but the crisis among provincial unions remains.

The NZRU capitulated at the first sign of resistance when it tried to cut costs by reducing the number of teams in the top flight inter-provincial competition, and instead we have the costly and disjointed two-tier ITM Cup.

The NZRU is not immune to the financial issues facing its member unions, recording losses of $9.4 million in 2010 and $15.9 million in 2009.

It also faces a $13 million loss from hosting last year's Rugby World Cup, although the Government will underwrite that. It is in no position to keep propping up ailing unions with cash, but as it tries to shore up its own accounts, it is unwittingly adding to the problems facing provincial unions.

The national body is arranging more matches and tours for its money-earning All Black side, but in doing so it robs provincial sides of their crowd-drawing players, further devaluing matches.

In 1998, nearly 40,000 people were at Carisbrook for the National Provincial Championship final between Otago and Waikato, lured in part by the attraction of seeing All Blacks Jeff Wilson, Josh Kronfeld, Anton Oliver and Taine Randell wearing the blue jersey.

Last year's ITM Premiership final between Canterbury and Waikato, a competition depleted of All Blacks because of World Cup commitments, attracted less than a quarter of the 1998 crowd.

Unions have always lured players with attractive offers - some under the table - in a bid to be successful, but the chance to make a living from sport has ended players' provincial allegiances and given them an unrealistic expectation of their worth.

Professional players can earn up to $80,000 a year but even players of average quality can earn up to $60,000 playing in the three-month ITM Cup competition. As the number of professional players has grown, the talent pool has become thinly spread, yet unions are still spending up large to bolster their teams.

Otago has had to face reality, cutting staff numbers from 36 to six (due in part to losing responsibility for management of the Highlanders and selling Carisbrook) and its player wage bill will continue to fall as contracts expire.

In five years, the structure of provincial rugby will be vastly different from today, and an indication of that future may lie in its past: a semi-professional league with players studying or working but employed on short-term contracts.

In 2007, the ORFU paid $300,000 to contract four All Blacks who never played a provincial game.

The NZRU must allow these elite players to reconnect with the public in their home provinces, including making them available for club and provincial matches.

Such changes would be a challenge because the NZRU needs All Black games to generate income and because rugby is reliant on cash from television which wields enormous influence, such as crowd-discouraging early evening kick-offs.

But they are necessary if we are to preserve our rugby nursery - in which resides the strength of our club and provincial structure.


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