After the revelations in my previous two articles – part 1 here and part 2 here, today I’m going to examine the ARU’s overall financial and strategic performance including benchmarking performance against the NZRU – and there’s not as much detail to wade through today – just some more concerning facts.
There are stark differences between the two organisations – not just in performances on the rugby field – which is a topic for another discussion.
- The ARU spend 10% more of total expenditure on overheads than the NZRU who use that extra money to invest in rugby;
- The NZRU are in a very strong financial position compared to the ARU – the NZRU had $41 million (Australian dollars) in the bank at 31 December 2012 compared to $3 million for the ARU;
- The net assets of the NZRU were $77 million (Australian dollars) at 31 December 2012 compared to $3 million for the ARU;
- The strength of the NZRU position is not because of the RWC with a profit in 2011 of only just over $8 million (Australian dollars);
- The ARU’s bank balance was only $3 million at the end of 2012 despite having already banked $12 million of future revenue;
- At the end of 2003 the ARU had $82 million in the bank and net assets of $36 million on the back of the 2001 Lions tour and the 2003 RWC.
From a strategic point of view the NZRU have clearly defined strategic priorities which are published every year together with ratings on how the organisation performed against those priorities so that all stakeholders know the direction New Zealand rugby is heading in.
BENCHMARKING AGAINST THE NZRU
To understand how the ARU’s financial performance compares to the NZRU I’ve analysed both organisation’s 2012 annual reports.
In order to make a direct comparison I’ve converted the NZRU numbers to AUD at the exchange of 1.25408 that existed at 31 December 2012.
Revenue (all figures in AUD)
Without detailed information on the new AIG sponsorship of the All Blacks we don’t know how much they received from that sponsorship deal in 2012 or what they’ll earn in future years but overall the NZRU’s revenue was only 81% of the ARU in 2012.
In 2011 the NZRU reported slightly higher revenue than the ARU but that included the revenue from the RWC so is not a valid number to compare.
The ARU’s revenue performance is quite good.
A summary comparison is shown below and the detailed comparison can be found here.
Expenditure (all figures in AUD)
The NZRU only spends 78% of what the ARU spend – $82 million compared to $105 million.
There are differences between the two organisations in the categories of expenditure they report but the most notable difference is the percentage of expenditure consumed by corporate expenditure – 17% for the ARU and only 7% for the NZRU.
That’s an extra 10% of all expenditure consumed by overheads in Australia rather than being invested in rugby!
Another quick comparison can be made with South Africa where corporate expenditure is 10% of all expenditure.
The NZRU spend 14% of its budget on developing the game at grass roots level compared to only 5% by the ARU.
A summary of the comparison in expenditure is shown below an the detailed comparison can be found here.