Lions tour helps deliver 2017 profit for New Zealand Rugby

New Zealand Rugby returned to profit in 2017 following a financially successful 10-match tour by the British and Irish Lions, which added $40 million to its bottom line.

With income rising 59% to $257 million last year, NZ Rugby this week reported a profit of $33 million in 2017, turning from a loss of $7 million in 2016.

NZ Rugby Chief Executive Steve Tew said the profit beat the body's forecast by almost 18% and income was 5% above its expectation.

Tew (pictured below) advised "2017 had an unusual number of top quality international rugby matches played on New Zealand soil and as a result, NZR benefitted from a significant spike in income, mainly from increased gate takings and broadcasting revenue.

"This spike was in our financial projections and provided us with the confidence to invest heavily back into the game."

Lions tours take place only every 12 years and the latest was almost twice as profitable as the 2005 tour, which boosted NZ Rugby net profit by $24 million.

NZ Rugby Chief Financial Officer Nicki Nicol said ‘match day’ income (money associated with people attending games) was up more than 250% last year to $65 million. Sponsorships and licensing income grew by 14% to $62 million, with some attributable to the Lions tour, but other growth coming from existing and new sponsors.

NZR added several international sponsors to its pool in 2017, including watchmaker Tudor (part of the Rolex group), US venture capital firm Vista Equity Partners, and Vodafone.

However, the the biggest tranche of income last year came from broadcast rights, which brought in $105 million - 41% of the total.

While NZ Rugby’s existing broadcast arrangements with Sky Network Television run until 2020, Tew said the organisation is already beginning to think about how the media and internet environment would look further out - and how NZ Rugby can maximise its profits from broadcast rights.

Tew added “preparations are underway. We are continuing to work really closely with our long-term partners, including Sky. But we are open to all offers. At the end of the day, we need competition (to get the best deal). During the last negotiations, there was intense competition and it would be great in the future if there were two or three players having a crack.

“There are lots of opportunities, but sports content sales is a complicated business.”

Nicol said at the moment NZ Rugby has no plans to go it alone, in terms of broadcasting its own games, as some overseas sports codes have done.

Some commentators have suggested that NZ Rugby’s tie-up with internet giant Amazon to make a documentary about the All Blacks, likely to be shown on Amazon Prime Video in the second half of this year, is a precursor to other deals with Amazon.

They suggest Amazon is in the market to bid for rugby broadcasting rights for 2021 and beyond.

Nicol advised that, as an incorporated society, NZ Rugby can provide funding assistance to the provincial unions and the organisation has been able to lift the money in the Player Payment Pool, including holding $20 million in trust to be spent in future years.

Nicol stated “Provincial Union funding has increased by approximately $11 million a year.

"This is over a 50% increase in funding (for the 2016-2020 period) when compared to the previous five-year period, and an additional $55 million going directly to Provincial Unions.

“This is an important aspect of our strategy as our PU partners invest these funds to grow and develop community rugby - to ensure the base of our game is also strong and healthy.”

Images: The All Blacks take on the British and Irish Lions at Auckland's Eden Park last year (top) and Steve Tew (below).

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