Thursday, 1 March 2012

The tip of the iceberg?

Further to the ORFU saga over the past few days, the New Zealand Herald has examined the financial performances of each of the 14 ITM Cup provincial unions, and has pointed fingers at Counties Manukau, Southland and Manawatu as prime examples of unions with debt issues.

This from the article:
Few unions performed better in their last reporting year than the previous, indicating that the cashflow problems are endemic.
Hmm. I'm not completely sold on that claim, and here's why.

These results have to be taken in context, which is complex. With global economic uncertainty causing this country's growth to remain rather flat, people don't have more money to fork out to go along and watch the ITM Cup. Massey sports management expert Associate Professor Andy Martin was on TVNZ's Breakfast yesterday (see the video here) and made a very good point (one of many, in fact) that behind the All Blacks and Super Rugby, the ITM Cup is really a third-tier competition. Couple this with increasing competition for the consumer's entertainment dollar with a wider rugby-playing window that now competes at times with cricket, soccer and basketball, it is little wonder that the ITM Cup unions are suffering. Thats not to mention other areas in which the consumer entertainment dollar can be stretched to, like movies (the introduction of 3D), among others. Lets not forget that the last two years have seen developments around the Rugby World Cup, of which (a proportion, I assume, of) facility upgrades and the like are likely to be reflected in the costs of unions. Locals would have been holding off going to as many ITM Cup games with an eye to the more expensive RWC tickets later in the year. These, added to rising player costs (some eye-popping figures in the Herald article, including Southlands $2.2m player wage bill in 2010 - I'm sure SBW wasn't moonlighting in Invercargill as a Stag) has made their economic environment a tough one.

In saying this, as I said yesterday, teams need to live within their means. This also from the Herald article:
The salary cap for the ITM Cup is now pegged at $1.3m or 36 per cent of commercial revenue, whichever figure is higher. 
Southland must have had a heck of a lot of commercial backers! Maybe the Ranfurly Shield does bring with it extra benefits... I just hope it was worth it. I wonder if Taranaki will experience the same in 2012?

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