Where to for Super Rugby?

[mst]

To be frank, NZRU have the human capital and money to create a competition which will boost the long term health of Rugby in Oceania, RA don’t. It’s really up to NZRU to make this work.

Um, sure.

With population of less than 5mil and about 600k pay tv subscribers where is the revenue coming from? The same magic fantasy money tree that RA were picking from for many year? Generally you don't go looking for investor cash if things are rosy. I am pretty sure I read that the Kiwi are doing so whacky account type suggested they don't produce enough revenue so they are worried about going under financially without help. Just saying.

We cant keep pointing the finger. Its the RA and Aussie mentality is the issue. We have a huge market, but stupidly will stick to a halfwit 5 team comp? Why? The Super Rugby that we have in reality is a dated product.

Super Rugby is sadly akin to crickets decline when they had test cricket only. The dying game had to faced up to a harsh reality they had to go to 50 overs then 20-20.

On just an rating only basis, TT rates 20% less than SRAU. Why would you invest in something that yields 20% less and for what?

 

[Dan54]

Um, sure.

With population of less than 5mil and about 600k pay tv subscribers where is the revenue coming from? The same magic fantasy money tree that RA were picking from for many year? Generally you don't go looking for investor cash if things are rosy. I am pretty sure I read that the Kiwi are doing so whacky account type suggested they don't produce enough revenue so they are worried about going under financially without help. Just saying.

yep but with that 600k pay tv customers NZR gets approx $80 mill a year? maybe because it basically 926,000 subscribers with Vodaphone streaming. And Stan sports get 150000 subscritions.
And no I have no idea how it works, with streaming and sky subscriptions

 

[hoggy]

yep but with that 600k pay tv customers NZR gets approx $80 mill a year? maybe because it basically 926,000 subscribers with Vodaphone streaming. And Stan sports get 150000 subscritions.
And no I have no idea how it works, with streaming and sky subscriptions

The issue is you can't compare different markets, NZR is selling the whole All Black brand and on top of that it dominates the local domestic sporting market in NZ as well.

As they have done over the last 20 years with Super rugby and the proposed TT competition is essentially just shore up that market, and good on them but Aus is in a totally different market place what has and will work for NZ just leaves Aus forever wandering around in no mans land.

We need to compete with the other codes, we somehow need to start clawing back some of that market share, so until the game here starts to specifically target greater domestic growth then nothing changes, and what is basically a Wallaby trial competition in Super rugby may deliver some sugar hits, but as we have seen now for 20years thats all you'll ever get, Sugar hits which will never make up for the ever growing lows.

 

[Dan54]

No arguments at all mate , only reason I posted that was in answer that NZR couldn't survive with a population of 5 mill and 600,000 sky subscription. Kind of explaining why NZR gets $80 mill a year to RA's $35 mill or whatever. NZR also competes with other codes ie soccer, NRL (not afl) etc etc, but is fortunate that they a; have a history of promoting the game and b; being in a country where people are bright enought to relise which is the best bloody sport in the world

 

[mst]

yep but with that 600k pay tv customers NZR gets approx $80 mill a year? maybe because it basically 926,000 subscribers with Vodaphone streaming. And Stan sports get 150000 subscritions.
And no I have no idea how it works, with streaming and sky subscriptions

The NZ numbers revenue and ratings are hard to actually get you head around ($80mill a year yet their is panic?) but something's are pretty clear and give you some clues:

https://www.tvnz.co.nz/one-news/spo...r-rugby-waning-quickly-despite-kiwi-dominance

Only 750K watched: https://www.stuff.co.nz/sport/rugby...-kiwis-watched-super-rugby-and-warriors-games

But the TV revenue can be boom and bust as we all know and NZRU has a 5% stake which means it has to ride the waves : https://www.nzherald.co.nz/business...-table-after-june/D2YD3SWJPJCC3SR6WOJALMU2UE/

And that investments now costs: https://eminetra.co.nz/nz-rugby-imp...s-clawback-range-for-broadcast-rights/259950/

In reality THAT $80Mil is when the TV stars align and the NZRU can pimp out the AB's for every dollar they can. When they can't, SRAO makes enough to keep the lights on. The hungry NZRU machine needs $200mil annually to feed it, yes, its a cash cow, but the NZ broadcast market is not where the money is to be made.

Thus the investment deal. It could make lots of money, and not just for the NZRU: https://www.stuff.co.nz/sport/rugby...d-silver-lake-deal-what-the-fuss-is-all-about

In reality, the Super Rugby stuff is a all a side gig as I suspect the reason there is no deal done yet between NZ and AU is for the NZRU, all about the AB cash cow and O/S revenue. Local rugby is very secondary.

 

[Dan54]

The NZ numbers revenue and ratings are hard to actually get you head around ($80mill a year yet their is panic?) but something's are pretty clear nad give you some clues:

Everyone's ratings are bloody hard to get head around. I never work it out, I have no idea how many of 600000 sky subscribers watch rugby, or how many of the 325000 steaming service do , never claimed I did.
As for sky deal, all I know that it was for $500mill over 5 years, and I was assuming that meant that some was coming out for share of sky (hence $16 mill a year costs) all I know is it meant to be worth $80 milll a year that they get!! They also get about $70 mill a year in sponsorship etc apart from that.
But I know they want/need more because NZR hands out $33 mill a year for provincial unions a year for grassroots, and also too Maori rugby board, Womens rugby etec etc. AB, MAB etc etc are about $54 mill a year etc etc, so you know (like RA and all other boards) they need ever $ they can get. They got $90 mill in a back up account,or did have .maybe only $50 mill now, but obviouly don't want to touch that. So yeah they want to keep getting money to help keep the game high profile in NZ.
But anyway I was only saying this is wrong
"To be frank, NZRU have the human capital and money to create a competition which will boost the long term health of Rugby in Oceania, RA don’t. It’s really up to NZRU to make this work"
And perhaps the other way was go completely seperate, seperate comp, seperate tv deals etc etc, and was told NZ didn't have the population to do it.

 

[Adam84]

. NZR's $80 mill agreement apparently doesn't involve seperate comps,

What do you mean it doesn’t involve seperate comps?

 

[Adam84]

Everyone's ratings are bloody hard to get head around. I never work it out, I have no idea how many of 600000 sky subscribers watch rugby, or how many of the 325000 steaming service do , never claimed I did.
As for sky deal, all I know that it was for $500mill over 5 years, and I was assuming that meant that some was coming out for share of sky (hence $16 mill a year costs) all I know is it meant to be worth $80 milll a year that they get!! They also get about $70 mill a year in sponsorship etc apart from that.
But I know they want/need more because NZR hands out $33 mill a year for provincial unions a year for grassroots, and also too Maori rugby board, Womens rugby etec etc. AB, MAB etc etc are about $54 mill a year etc etc, so you know (like RA and all other boards) they need ever $ they can get. They got $90 mill in a back up account,or did have .maybe only $50 mill now, but obviouly don't want to touch that. So yeah they want to keep getting money to help keep the game high profile in NZ.
But anyway I was only saying this is wrong
"To be frank, NZRU have the human capital and money to create a competition which will boost the long term health of Rugby in Oceania, RA don’t. It’s really up to NZRU to make this work"
And perhaps the other way was go completely seperate, seperate comp, seperate tv deals etc etc, and was told NZ didn't have the population to do it.

Hence why they need to be supporting growth in the markets which can encourage revenue growth, markets like Australia!

NRL has its eyes firmly on Nz as a growth market to provide revenue and that money will be distributed amongst all clubs, NZRU should be doing the same for Australia and achieving that by partnering with RA on a deal which will promote growth. Through a revenue sharing agreement both unions benefit by growth in the Australian market.

 

[Adam84]

Um, sure.

With population of less than 5mil and about 600k pay tv subscribers where is the revenue coming from? The same magic fantasy money tree that RA were picking from for many year? Generally you don't go looking for investor cash if things are rosy. I am pretty sure I read that the Kiwi are doing so whacky account type suggested they don't produce enough revenue so they are worried about going under financially without help. Just saying.

NZRU revenue is double what RA earn and current assets of around $50million, and that’s before the $380 million PE injection comes through, compared to RA who are technically negative right now running on loan to loan.

Regardless at no point did say NZRU should bankroll RA.
What I’m saying is if a trans tasman tournament is to be stood up which supports growth in the region then the heavy lifting is going to be on NZRU. RA doesn’t have the finances or human capital to make it happen.

RA can’t give the Drua money from the Stan broadcast deal or Harvey Norman sponsorship, RA also doesn’t have the players to share around. The teams are already lacking in competitiveness and facing a revenue shortage for 2021 with the salary cap slashed.

 

[half]

I am going to assume I have won and we are headed to a NDC. Its becoming more obvious by the day we should head in this direction. Further those in power finally agree. In addition its equally obvious five teams is not enough.

My belief is we need ten teams and we only have five.

This post is to recommend my expansion teams along with stadiums.

My first 3 expansion teams.

Western Sydney, play out of Lilys Stadium [Seven Hills] a compact 7 to 8 K soccer stadium but near rugby training fields and near Seven Hills Sports High School. I am sure they would hire it out on game days. This stadium is arguably the best located stadium pertaining to transport and parking in Sydney.

New England NSW, playing out of Tamworth at Sully Park holds 11K, and rugby is bigger than league, in the New England region.

Newcastle / Central Coast team, and play at Merewether Carlton stadium, its small but temp seating cold be introduced on match days. Both Newcastle's and Gosford main stadiums are way to large and expensive for a start up team in this region.

The next two teams would be in QLD, but I don't know enough to say where they should be so some QLDers may be able to advise.

 

[Dan54]

What do you mean it doesn’t involve seperate comps?

Sorry mate, I wrote that wrong, I meant whole thing is bundled, not paid X amount for Super,X amount for tests etc etc. It includes NPC cup college rugby etc etc from what I understand. Though I would be pretty sure the biggest value is AB tests as Sky gets to sell them around world (I think)

 

[Dan54]

NZRU revenue is double what RA earn and current assets of around $50million, and that’s before the $380 million PE injection comes through, compared to RA who are technically negative right now running on loan to loan.

Regardless at no point did say NZRU should bankroll RA.
What I’m saying is if a trans tasman tournament is to be stood up which supports growth in the region then the heavy lifting is going to be on NZRU. RA doesn’t have the finances or human capital to make it happen.

RA can’t give the Drua money from the Stan broadcast deal or Harvey Norman sponsorship, RA also doesn’t have the players to share around. The teams are already lacking in competitiveness and facing a revenue shortage for 2021 with the salary cap slashed.

Yep fair enough mate, once again, I understand what you saying, but isn't that then just making it a NZR run comp that everyone was getting their nickers in a twist about? For ot to work , so everyone needs to feel comfortable that it's not someone else's comp I think.

 

[hoggy]

I am going to assume I have won and we are headed to a NDC. Its becoming more obvious by the day we should head in this direction. Further those in power finally agree. In addition its equally obvious five teams is not enough.

My belief is we need ten teams and we only have five.

This post is to recommend my expansion teams along with stadiums.

My first 3 expansion teams.

Western Sydney, play out of Lilys Stadium [Seven Hills] a compact 7 to 8 K soccer stadium but near rugby training fields and near Seven Hills Sports High School. I am sure they would hire it out on game days. This stadium is arguably the best located stadium pertaining to transport and parking in Sydney.

New England NSW, playing out of Tamworth at Sully Park holds 11K, and rugby is bigger than league, in the New England region.

Newcastle / Central Coast team, and play at Merewether Carlton stadium, its small but temp seating cold be introduced on match days. Both Newcastle's and Gosford main stadiums are way to large and expensive for a start up team in this region.

The next two teams would be in QLD, but I don't know enough to say where they should be so some QLDers may be able to advise.

Well looking at QLD, first would be to decide how many teams 2 or 3. But also learning from other codes regards expansion.

The most important thing is to have a game in Brisbane every weekend or as close to that as possible.
(i could never believe the stupidity of NSW the heartland of Union here letting the other codes dominate the schedule while they just have one entity the Waratahs, with what 6 or maybe 7 home games, and then wonder why Union is losing support)

But you also need the ability to take the game around the state, the Gold Coast, Mackay, Sunshine Coast, Townsville, even Redcliffe now has a purpsoe built stadium, Toowwoomba is Union stronghold.

Would three teams be a stretch maybe long term, and a home base is important for any new entity. But rugby needs to take the game to the people, its perceived as a snooty private school game who's connection to the people is trotting out annual Wallaby tickets at $200 a pop.
So to start with 2 teams in a NDC you have 20 games to do that with.

 

[Adam84]

Yep fair enough mate, once again, I understand what you saying, but isn't that then just making it a NZR run comp that everyone was getting their nickers in a twist about? For ot to work , so everyone needs to feel comfortable that it's not someone else's comp I think.

No, because what was been proposed by NZR was a competition which simply promoted short-term self interest, not long-term regional growth. It completely missed the mark by culling Australian teams without any dialogue with Australia’s. Which is why everyone had their nickers in a twist, rightly so.

 

[mst]

No, because what was been proposed by NZR was a competition which simply promoted short-term self interest, not long-term regional growth. It completely missed the mark by culling Australian teams without any dialogue with Australia’s. Which is why everyone had their nickers in a twist, rightly so.

Correct but, if you think NZRU will offer anything I would be shocked. Yes, they have more revenue and cash in the bank, but they are also ruining at a loss with far bigger bills than RA. Right now RA is actually better positioned than NZRU to do anything as they have their bill covered. NZRU does not.

The key issue here is why we keep thinking that we need a TT beyond what we have? It just a stupid idea. The ratings say no, the revenue yield says no, Super Rugby history says no. WFT more evidence do we need? This is exactly the same stupidly that prevailed before the Super Rugby expansion.

RA has 5 Super Rugby teams worth of players swinging in the wind doing sweet FA most of the year. NZRU kick in funds to run the Mitre 10 which has stabilised after years of running a at a loss. The how have the NPC in a happy place, the overall rugby ratings are pretty much maxed out, so the only thing they need to fix is to make sure their 5 Super Rugby teams are at least cost neutral.

The scenario is simple; TVs got switched off after the first round of TT. So they either change it up or run at a loss. To change it AU teams need to go or start being competitive. As a business you need to have some controls to make sure you get the right outcomes. They cant do that with AU teams, and as the population really don't identify with AU teams. Aussie viewers don't really bolster the ratings so why take the risk and lose $$$.

Super Rugby TT will only ever be a quickfire side show going forwards, very much like the Cup Competitions O/S. It where domestic comps come to make a bit of extra cash if its done right.

We, as in Aussie rugby supporters, are really struggling with a reality that the Reds, RA Rebels, Tah's and Brumbies need to be changed or cut. (Force have different options), We cant keep running 5 team domestic comp - all the metrics are suggesting it should be the way to go and it will yield a good revenue but we need more teams. But we are waiting on the Kiwi to do it for us?

TT is not it, again ratings, revenue, history all tell us why we should not.

The Elephant is in the room, we cant ignore it.

 

[Adam84]

Correct but, if you think NZRU will offer anything I would be shocked. Yes, they have more revenue and cash in the bank, but they are also ruining at a loss with far bigger bills than RA. Right now RA is actually better positioned than NZRU to do anything as they have their bill covered. NZRU does not.

RA are definitely not in a better position then NZRU.

NZRU ran an operating loss of $18million on an annual revenue of $138million with $50 million in assets at hand.
RA ran an operating loss of $23million on an annual revenue of $65million with negative assets of $7.5million.

Both RA and NZRU received around $5million in government grants, and NZRU also had an asset impairment of $15million due to their ownership stake SkyTV and the declining share price. .

 

[mst]

RA are definitely not in a better position then NZRU.

NZRU ran an operating loss of $18 34million on an annual revenue of $138 $55million with $68 million in assets cash at hand.
RA ran an operating loss of $23million on an annual revenue of $65million with negative assets of $7.5million.

Both RA and NZRU received around $5million in government grants, and NZRU also had an asset impairment write-down of investment shares valuing $16million due to their ownership stake SkyTV and the declining share price. .

The near $200mil revenue is when the AB's are playing 15 games annually. The $55mil is current NZRU COVID revenue pa.



"NZR’s cash reserve is currently at $68m, which is “sufficient”, Nicol said, but not enough to “fund all parts of the game”." The players currently receive 36.5 per cent of NZ Rugby’s revenue. She said without the Silver Lake deal, the cash reserves would be able to cover the professional game, but not the community game.

Chairman Brent Impey said end figure was an “outstanding result”. Impey said while steps had been taken to "stabilise" matters, rugby still remains in a “critical” financial position.

In the past 11 years, NZR has either broken even, or “a small loss”, Impey said, with only one profitable year, when the Lions visited in 2017. “That’s unsustainable.”



A non-AB test playing $55mil revenue does not go far when you have a player wage bill that is 36.5 per cent of NZ Rugby’s revenue (and that figure is the pre-COVID $183mil revenue base).

Simply put, one has a available market, reasonably small overheads and little to lose.

The other has a huge house of cards, huge overheads and has tapped out local revenue options. Shopping for revenue has opened up a real risk of being exploited due having to essentially sell access the the AB's money printing machine; that is when it can operate.


I beg to differ. Happy to agree we disagree.

 

[Adam84]

The near $200mil revenue is when the AB's are playing 15 games annually. The $55mil is current NZRU COVID revenue pa.



"NZR’s cash reserve is currently at $68m, which is “sufficient”, Nicol said, but not enough to “fund all parts of the game”." The players currently receive 36.5 per cent of NZ Rugby’s revenue. She said without the Silver Lake deal, the cash reserves would be able to cover the professional game, but not the community game.

Chairman Brent Impey said end figure was an “outstanding result”. Impey said while steps had been taken to "stabilise" matters, rugby still remains in a “critical” financial position.

In the past 11 years, NZR has either broken even, or “a small loss”, Impey said, with only one profitable year, when the Lions visited in 2017. “That’s unsustainable.”



A non-AB test playing $55mil revenue does not go far when you have a player wage bill that is 36.5 per cent of NZ Rugby’s revenue (and that figure is the pre-COVID $183mil revenue base).

Simply put, one has a available market, reasonably small overheads and little to lose.

The other has a huge house of cards, huge overheads and has tapped out local revenue options. Shopping for revenue has opened up a real risk of being exploited due having to essentially sell access the the AB's money printing machine; that is when it can operate.


I beg to differ. Happy to agree we disagree.

Im happy to disagree but just want to address the changes you made to my post above.

NZRU had an $18million operating loss in 2020, the $34 million you mentioned was total loss including a $15million impairment for SkyTV. 'Impairment' describes a reduction in the value of an asset and is the correct term there.

In terms of sustainability, operating loss is the key figure to examine as impairments don't directly impact the recurring revenue of the business. Point to note is RA's operating loss was larger then NZRU's from a smaller revenue base.

The $55million you refer was not their annual revenue for 2020, it was the reported decline in revenue between 2019 and 2020, NZRU annual revenue in 2020 was $138million.

Underlying assets is a better gauge then cash on hand for the solvency of the business. A company can have $17million cash on hand but still be owing $23million in loans, ala Rugby Australia, doesn't mean they're healthy. However NZRU had $50million in assets once all liabilities were removed.

 

[half]

I am going to assume I have won and we are headed to a NDC. Its becoming more obvious by the day we should head in this direction. Further those in power finally agree. In addition its equally obvious five teams is not enough.

My belief is we need ten teams and we only have five.

This post is to recommend my expansion teams along with stadiums.

My first 3 expansion teams.

Western Sydney, play out of Lilys Stadium [Seven Hills] a compact 7 to 8 K soccer stadium but near rugby training fields and near Seven Hills Sports High School. I am sure they would hire it out on game days. This stadium is arguably the best located stadium pertaining to transport and parking in Sydney.

New England NSW, playing out of Tamworth at Sully Park holds 11K, and rugby is bigger than league, in the New England region.

Newcastle / Central Coast team, and play at Merewether Carlton stadium, its small but temp seating cold be introduced on match days. Both Newcastle's and Gosford main stadiums are way to large and expensive for a start up team in this region.

The next two teams would be in QLD, but I don't know enough to say where they should be so some QLDers may be able to advise.

Longer term yes. Short term ie next season we start with 6 teams with Fiji with them playing games out of Western Sydney. I delete a lot of my posts discussing nzru as they should not be relevant as we need to control our own destiny with a domestic competition. With nzru we will only ever get a flawed TT product that in a misguided nzru view meets theirs and all blacks interests but regardless of the latter results in a crap product fans won’t engage with. We need to complement our domestic competition with a champions league with Japan and nz, but work closely with Japan to ensure Nzru don’t hijack the champions league for their own agenda so we end up with a crap champions league product fans won’t engage with.

With private equity investment aim to expand to 8 teams and of course allow private investors opportunities to invest in teams. Maybe instead of additional oz sides we add say HK and MP (Moana Pasifika) (assuming the latter get pissed and decide to base themselves out of western Sydney). Then over time maybe add extra nsw and qld team and you have 10 teams.

But short term at least for couple of seasons aim for 6 teams with drua and supplement with champions league with Japan and nz as baby steps needed here.

Its not about next season.

Harking back to my post of over a decade ago until about 4 years ago I always said the move to a NDC will take 4 to 5 years.

Phase 1 is to establish the framework for the system to operate and new structures to be developed, and as I have countless times said we should copy US franchise models, were the governing body establishes a competition structure and invites private owners to invest and run the competition.

Phase 2, and done in lock step with phase 1 is the selling of the idea to the broader rugby family, and be inclusive and be flexible and by that I mean take on board the views of all stakeholders.

Phase 3, is selling the concept to private investors.

Phase 4 is the implementation of the above.

HOWEVER the issue today is we no longer have 4 to 5 years. Maybe two and a bit, so we need to work quicker and smarter.

The media deal with the Nine group provides time and enough cash to undertake the first three phases above. WE should not waste the limited time we have.

BUT we will go to a NDC the taro cards and tea leafs say so. If not the taro cards and tea leafs then the TV ratings do.

Its coming its obvious its coming, so lets do it well and unite behind it.

 

[mst]

Im happy to disagree but just want to address the changes you made to my post above.

NZRU had an $18million operating loss in 2020, the $34 million you mentioned was total loss including a $15million impairment for SkyTV. 'Impairment' describes a reduction in the value of an asset and is the correct term there.

In terms of sustainability, operating loss is the key figure to examine as impairments don't directly impact the recurring revenue of the business. Point to note is RA's operating loss was larger then NZRU's from a smaller revenue base.

The $55million you refer was not their annual revenue for 2020, it was the reported decline in revenue between 2019 and 2020, NZRU annual revenue in 2020 was $138million.

Underlying assets is a better gauge then cash on hand for the solvency of the business. A company can have $17million cash on hand but still be owing $23million in loans, ala Rugby Australia, doesn't mean they're healthy. However NZRU had $50million in assets once all liabilities were removed.

Corrections are fair. Its all fairly mute when you consider its most of above is 2020 figures that included AB games which is where they yield most of the revenue.

The $55mil I was referring to is more recent (April / May 2021) and inline with the revenue prediction that NZRU have been publicly stating since April last year. (nil AB revenue) EG: https://www.rugby.com.au/news/2020/04/29/new-zealand-rugby-annual-report

As Dan54 has indicated, the TV deal only yields about $80mil in a full AB playing year, so for SRAO it would be much less. NZRU will still have to pay the fees to Sky for the 5% share as per the 5yr deal. Its akin to owning (and still paying off) part of an oil refinery while owning a dry oil well, and there is a crude oil shortage.

Majority of media reporting and NZRU in April 2021 reported it as (specifically using these words) writedown of Sky Television shares which was interesting and may be due to the odd arrangements of the deal and to make a point as its still fairly convoluted (Rights owner being part owner of broadcaster who was the sole bidder for the rights). What NZRU have not mentioned is that Sky is / was in talks (with NZRU) to claw back rights (and $$) earlier this year. To what value is unknown but Sky revenue is already sliding.

Agree to disagree. The terminology and figures are from media reporting.