NZ Rugby plans structural overhaul as five-year losses set to reach $66m
New Zealand Rugby (NZR) has issued a stark warning about its financial future, predicting losses of $66 million in the next five years, despite record revenues expected from hosting the British and Irish Lions tour in 2029.
The bleak forecast – despite the commercial power of the All Blacks, the most valuable brand in rugby – is to prompt a complete overhaul of the professional game in New Zealand for the first time in 30 years.
This will bring concerns about the world game’s finances into further focus. The Rugby Football Union, the sport’s most financially powerful union, is expected to lose £10m ($23m) this year.
NZR stakeholders will hold a summit next week to review the entire structure of the game, starting with men’s competitions, including the country’s five Super Rugby franchises and the 14 provincial unions that participate in the National Provincial Championship.
NZR currently remains in a strong financial position – with $150m in cash reserves, plus a $62.5m legacy fund remaining from the sale of an 8.5% stake in its commercial operations to private equity firm Silver Lake in 2022.
The Lions’ 2029 visit is also expected to exceed the $40m boost to NZR revenues that was generated by the last tour in 2017. Traditionally, Lions tours underpin the business model of test rugby in New Zealand, Australia and South Africa, providing the Southern Hemisphere “big three” a major payday every 12 years.
Last year Rugby Australia (RA) cleared a $74.7m debt after generating a record profit of $182m from hosting Andy Farrell’s Lions. The tour helped RA generate total revenue of $324m, with a $86m surplus and cash reserves of $38.2m.
But the scale of NZR’s deficit forecast – despite the Lions payday in 2029 – has left the governing body with no option but to implement what has been described as “structural change to the NZ rugby system” to reduce costs.
The alarming figures, laid out in a document called “Rugby System Programme”, reveal that the All Blacks are the only side in New Zealand making a profit for the governing body, with a return of $38m for the 2026 financial year. This week The Herald reported that the weekend’s fourth test against South Africa, held in Baltimore, generated about $9m for the union.
“In the past three years, NZR is thought to have made about $16m playing three games in the US and there are now fledgling plans to play in Miami next year against Argentina in the Rugby Championship,” Gregor Paul reported.
The document also reveals the extent of the increasing competition from National Rugby League (NRL).
Payments to players in the national and provincial set-ups cost $95m while $46m was paid separately to the five Super Rugby clubs and provincial unions.
An assessment by Deloitte in April revealed that no Super Rugby franchise in New Zealand would have been profitable since 2019 without NZR funding. Malcolm Gillies, the Hurricanes co-owner, is a strong advocate for full privatisation of the franchises. In April he told the Herald that Super Rugby could die unless serious changes are made.
Despite generating more than $350m this year, NZR’s overall deficit is forecast to be $27m.
David Kirk, who captained the All Blacks to World Cup victory in 1987, is heading up the strategic overhaul, having appointed six executives this year.
It is understood that after a review of men’s and women’s competitions, the next stage of the overhaul will look at the level of investment in professional players and how rugby is delivered to communities, which is currently done through 26 provincial unions.
Stakeholders will be consulted and options drawn up before a final board decision in early December.
“Current five-year projections have NZR continuing to lose a combined $66m across 2027–31,” the document states, according to The Post in New Zealand. “That includes the 1-in-12-year profit from the 2029 Men’s Lions tour. NZR is incurring significant losses on women’s elite competitions – $8.5m a year.”
The document also reveals that NRL is the most-watched competition in New Zealand.
“NRL now draws 28m NZ viewing hours against Super Rugby’s 19m and NPC’s 14m,” the document reveals.
NZR was approached for a comment.