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NZRU announces sale of Hurricanes to private consortium, Crusaders to follow soon

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NZRU announces sale of Hurricanes to private consortium, Crusaders to follow soon Empty NZRU announces sale of Hurricanes to private consortium, Crusaders to follow soon

Post by Pete C (Kiwireddevil) Mon 12 Nov 2012, 12:09 pm

http://www.stuff.co.nz/sport/rugby/super-rugby/7938496/Hurricanes-sale-keeps-the-franchise-in-the-capital



The Hurricanes and Crusaders Super Rugby teams will be managed by investor-appointed boards from next year as the New Zealand Rugby Union takes its first steps toward private ownership of the franchises.

The NZRU said today a license to manage the Hurricanes from 2013 had been awarded to a consortium led by the Wellington Rugby Union and including a number of high-profile business people.

The new entity, Hurricanes’ Investment Ltd Partnership is made up with 50 per cent of shares held by WRFU [Wellington Rugby Football Union], and 50 per cent private shareholders including Cohiba Traders represented by former Hurricanes chairperson, Paul Collins, ForsythMorison represented by former Hurricanes board member, Liz Dawson and Welnix, owners of the Wellington Phoenix [NZ's only professional soccer team, playing in the Australian A-League] represented by Gareth Morgan [Well known NZ economist, made a multi-millionaire thanks to the sale of his stake in his son's on-line auction company TradeMe].

The new board will be led by current chief executive of NZ Post Group and former partner of PricewaterhouseCoopers and chairman of Rugby NZ 2011 Ltd, Brian Roche.

‘‘The announcement today represents a new phase in the development of the Hurricanes,’’ Roche said.

‘‘It’s a privilege for us all to be associated with the opportunities the license arrangement provides.

‘‘This will ensure that the Hurricanes continue to be a key part of the image and brand of the region – in perspective of both our rugby profile and the economic impact the team brings to the region.’’

Agreement in principle has also been reached to allow a consortium to take over the Crusaders which, with seven championship titles, is the most successful team.

The new owners will have the power to select players, market their teams and promote matches, retaining ticketing and sponsorship revenues.

The NZRU will retain ownership of the team ‘‘brands’’ and pay players and coaches from broadcasting revenues.


Since rugby became professional in 1996, New Zealand’s five Super Rugby teams have been owned by the NZRU and managed by boards representing the provincial rugby unions in each team’s region.

The NZRU conducted a review earlier this year into the structure and financial sustainability of its Super Rugby franchises which recommended a move toward limited privatisation to attract new investment.

Monday’s announcement of new operators for the Hurricanes and Crusaders mark the first steps toward a new ownership model.

‘‘Our aim at the start of this process was to ensure franchises could benefit from being run by independent boards with an improved mix of commercial, marketing and management expertise with an injection of outside capital to strengthen their financial performance,’’ NZRU chief executive Steve Tew said.

‘‘We were looking for stronger governance at the board level, fresh thinking and new investors and the Hurricanes consortium certainly delivers in that regard.’’

Tew said rugby operates in a highly competitive market for the attention of sports fans.

‘‘This move gives the game at the professional level a better chance to be run profitably, to build on its appeal to fans and to enhance its ability to feed a winning All Blacks team,’’ he said.

‘‘These new arrangements are a step forward in terms of putting Super Rugby on a stronger financial footing to ensure the game at the professional level is better placed to prosper and deliver for its fans.’’

The final license agreement around the Crusaders is expected to be signed within a month, Tew said.

A mixture of international and domestic interest has been shown in the license for the Auckland Blues but no bidders were secured for current Super 15 champions the Waikato Chiefs.

The NZRU will retain ownership of the Otago Highlanders. ]since they had to bail the team out last year]

‘‘We expect a bid for the Blues will be submitted to allow a license to be issued for 2014,’’ Tew said.

‘‘However, it is disappointing the Chiefs were not able to finalise a bid.

‘‘A new, commercially-focused board has been appointed by the NZRU to build on the great success the Chiefs enjoyed this year both on and off the field.’’

The new owners will have an option after their first three-year terms to extend their licenses for a further five years.

Interesting that no-one wanted to buy a share of the Chiefs - though I guess Tainui (the main Maori tribe in the Waikato, who have plenty of cash) got burnt on their ownership of the Warriors RL team
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Post by Kingshu Mon 12 Nov 2012, 12:59 pm

What to NZ fans think? good move or bad?

There are examples of when Edinburgh went private, and there was a fall out with the SRU, and then the SRU bought them back.

Could same happen again, Private investors unhappy with All back call ups, NZRU not giving them the funds they though etc etc,

Personally I'd hate it if the IRFU did this to the Provinces. Set up is slightly different than NZ, but still. I am surprised by this move to be honest, but we'll see how it turns out.

Melbourne Rebels are private any falling outs over it yet?

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Post by Pete C (Kiwireddevil) Mon 12 Nov 2012, 4:47 pm

Just found an interview with Gareth Morgan on the purchase
http://www.stuff.co.nz/sport/rugby/super-rugby/7940282/Buy-now-Gareth-Morgans-sports-vision

He's talking about running the behind-the-scenes stuff on a slightly better than break-even basis, with a budget of just over £1m a year for behind the scenes stuff like training facilities.

On field not much will change http://www.stuff.co.nz/sport/rugby/super-rugby/7940180/Hurricanes-deal-means-little-change-for-fans

I'd be cheesed off if I was one of the other provinces in the 'canes region, as they've basically lost their connection to the franchise (unless they take up and pay for the 12.5% minority share set aside - not a lot when the WRFU has a 50% share) - previously they used to get a cut of any profits

According to http://www.stuff.co.nz/sport/rugby/super-rugby/7940120/Chiefs-not-ready-to-take-private-bids-NZRU, non of the provincial unions in the Chiefs region can afford to buy up shares, and the finances aren't ready for a sale yet




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Post by profitius Tue 13 Nov 2012, 12:42 am

Risky move by the NZRU. Short term gain, long term pain?? Are they struggling for cash?
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Post by nganboy Tue 13 Nov 2012, 11:45 pm

I think its a bad idea that will be reversed in 8 -12 years time. it will be a result of spiralling costs, need to generate a return on investment, conflicting priorities and loss of provincial support.
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Post by Morgannwg Wed 14 Nov 2012, 12:30 am

Never a good idea to have clueless businessmen come in and select players.
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Post by Brendan Fri 16 Nov 2012, 2:19 pm

I think Its interesting that the wages will be paided from the Broadcasting. Is this likely to be realistic to run as wages are going to go one way.

Also think it will be to much conflict as players will be rushed back by the Franshise.

As the NZRU is paying the wages I assume they pick who goes where.

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Post by Pete C (Kiwireddevil) Fri 16 Nov 2012, 3:48 pm

Brendan wrote:I think Its interesting that the wages will be paided from the Broadcasting. Is this likely to be realistic to run as wages are going to go one way.

Also think it will be to much conflict as players will be rushed back by the Franshise.

As the NZRU is paying the wages I assume they pick who goes where.

The wages are paid from Broadcasting now - NZRU contracts the SXV players, and their salary includes SXV and (if they're good enough) international components. NZRU basically need to make enough money out of Super Rugby and the ABs to support 5 teams. They make enough off the Adidas and AIG deals to pay their other expenses.

And the players and franchises negotiate on where they play.

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Post by Intotouch Fri 23 Nov 2012, 6:03 pm

What's the motivation for this? Excuse my ignorance please. I would have thought that the NZRU would make as much money from their national side as they need to support their franchises. The IRFU still spends far more on the pro game than it gets but the national side makes up the loss. Lose control of the franchises and you're into club v country arguments pretty damn fast.

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Post by HammerofThunor Fri 23 Nov 2012, 7:56 pm

Intotouch wrote:What's the motivation for this? Excuse my ignorance please. I would have thought that the NZRU would make as much money from their national side as they need to support their franchises. The IRFU still spends far more on the pro game than it gets but the national side makes up the loss. Lose control of the franchises and you're into club v country arguments pretty damn fast.

The IRFU get more than their fair share from their involvement with English and France markets ( Whistle )

More seriously, the All Blacks have to find wages to keep some of the best players in the world at home. They have a small population at home. They're in a competition with Australians who also don't have a massive market. They heavily rely on Sky TV money and a share of away games in Europe. Money is tight and they're looking at options to make more. It'll be interesting how it turns out.

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Post by Peter Seabiscuit Wheeler Sat 24 Nov 2012, 11:59 am

Simple fact is the NZRU is in a financial hole. They lost tons of money form the world cup (as did England and France and they werent even hosting the thing)

Its quite sad that the AIs are actually what keep the global game afloat, even though no-one takes them that seriously as a sporting contest.

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Post by Intotouch Sun 25 Nov 2012, 3:06 am

That's really shocking. The no 1 team in the world can't make enough to keep it's clubs. I really hope that this works out for them.

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Post by Pete C (Kiwireddevil) Tue 18 Dec 2012, 11:11 am

The new arrangements for managing the Crusaders have been announced http://www.stuff.co.nz/sport/rugby/super-rugby/8094627/Canterbury-provincial-unions-to-run-Crusaders

A new "investor" and the spectre of a new boss were key features of a number of sweeping changes announced today to Christchurch-based Super Rugby franchise the Crusaders.

As already foreshadowed, the franchise confirmed West Coast coal mine owner Brent Francis will underwrite the team which has adopted a new commercially driven focus.

The provincial unions and foundation members of the team - Canterbury, West Coast, Tasman, Mid Canterbury, Buller and South Canterbury - have formed a new limited liability company, which will run the franchise.

The New Zealand Rugby Union will still own it.

However, the national rugby body has decided to grant the new provincial union consortium a licence to run it until 2020, much in the same way it granted the Wellington Rugby Union and a group of private investors power over the Hurricanes. While on the face of it little will change for fans of the team, the same can't be said for its backroom.

The new board will appoint a new chief executive, according to today's press release, although there were rumours long serving chief executive Hamish Riach had already nabbed the job.

Francis will join a new look board made up of two Canterbury Rugby Union representatives, two independents and one appointed by the consortium. The licensee's responsibilities will include management of the team both on-field and off-field, including the professional development of members of the squad and marketing and promotion of matches.

The licensee will retain most of match gate takings and some sponsorship income and also pay administration staff and additional coaching and management staff, fund training facilities, match operations and marketing costs.
The NZRU will continue to retain ownership of the brands associated with each team, continue to pay player and coach contracts from centralised broadcasting and sponsorship revenue and continue to pay all travel and accommodation costs associated with the regular season.

CRFU chairman Stewart Mitchell said this licence agreement is the best possible outcome for all of the provincial unions involved.

"This will give the provincial unions involved real input in the future of the Crusaders. Each of the provincial unions that make up the Crusaders region has committed to the new structure, so we are all in this together.

"The provincial unions, as the custodians of rugby in this area, were keen to see that we all remained involved in the management of the Crusaders.

Ad Feedback "We are obviously all huge supporters of the Crusaders and we believe that it is in the best interests of this great rugby organisation that decisions around its future continue to be made by the rugby unions that have always been at the heart of it."

Francis declined to comment but in a written statement said: "I am thrilled to be involved in the new Crusaders limited partnership. As a Crusaders fan, I am happy to be able to help ensure the future viability of this great rugby organisation."

- © Fairfax NZ News
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Post by Brendan Tue 18 Dec 2012, 12:57 pm

so if the NZRU are going to be paying all the players and travel costs it seems like the private people will just be all about getting their money back out for the 7 years

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Post by Pete C (Kiwireddevil) Wed 19 Dec 2012, 6:38 am

The Crusaders at least returned to profit this year http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=10855065, a good recovery post- quake. And once their business interruption insurance comes through most of the debt to the NZRU will be cleared.
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Post by Kingshu Wed 19 Dec 2012, 9:34 am

I was against this idea at first, but reading on it, it appears to be a very good idea.


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Post by profitius Wed 19 Dec 2012, 9:13 pm

So whats in it for the businessmen?
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Post by Peter Seabiscuit Wheeler Wed 19 Dec 2012, 9:18 pm

profitius wrote:So whats in it for the businessmen?

Most of the match takings and sponsorship at low risk

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Post by Pete C (Kiwireddevil) Thu 20 Dec 2012, 9:11 am

Peter Seabiscuit Wheeler wrote:
profitius wrote:So whats in it for the businessmen?

Most of the match takings and sponsorship at low risk

In this case it would appear not a lot, he's "underwriting" the consortium of provincial unions, so basically chipping in cash if needed, and getting a bit of PR (the guy is a coal miner, and the coal is mostly exported). He probably gets really good seats at games though.
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Post by Morgannwg Thu 20 Dec 2012, 2:28 pm

Can any of you Kiwi's let me know if the world has ended yet?
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Post by nganboy Thu 20 Dec 2012, 11:38 pm

Yes it has!
But because we are ahead of you (time wise) your world hasn't ended yet.
But it will soon.
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