NZRU advises further cost savings

The New Zealand Rugby Union has announced it will make further reductions to its 2009 spending in an effort to reduce the impact of the current economic downturn. The decision, taken at the NZRU Board meeting in Wellington yesterday, follows a projected fall in revenues for 2009. NZRU CEO Steve Tew said the projected savings announced today totalled $2.6 million but added it was important to put them in context. “While all rugby organisations, just like other New Zealand businesses, are facing challenging times, New Zealand rugby as a whole is in good shape. “The NZRU has healthy cash reserves of $55 million and we have also announced today an extension of the Collective Employment Agreement (see separate media release), which is great news. “Having said that, as we said in December, we are taking a deliberately cautious approach to our budgeting and taking the appropriate short and medium-term measures to see us through the current economic downturn. The budget changes announced today will largely be confined to professional rugby activity and administrative costs. Mr Tew said the steps were necessary to ensure that the NZRU took appropriate steps to mitigate the effect of projected revenue falls. “We also said we had a significant amount of revenue at risk and it is now apparent that some of that revenue will not be delivered this year including lower interest income, sponsorship and offshore match revenues given the deteriorating financial situation in the northern hemisphere.” These cost savings were concentrated in administrative savings of nearly $1 million and in professional rugby, including :
Reduced spending on professional rugby activities including development camps, some assembly costs for national training squads and development programmes; A reduction in All Blacks programme costs; A salary freeze on all NZRU staff salaries; and A reduction in television match officials (TMOs) and some other spending in the Air New Zealand Cup.
Mr Tew said that as with the decisions taken in December, these measures would mean hardship for some sections of rugby at the national level. “That is regrettable and comes at a professional and, in some cases, personal cost to those involved. But these decisions have not been taken lightly.” “The situation we face is the same as any other organisation in this country, and, in fact, globally. We have to cut our cloth to fit and that means having to make hard decisions about some activity and prioritising some areas of our current activity over others. The aim is that we can emerge from this in a strong enough position to be able to benefit when conditions improve.” Mr Tew said that the NZRU had tried to avoid making significant cuts to community rugby spending or Provincial Union funding, recognising that these are vital to the future of the game, and that many Provincial Unions were facing a similar situation to the NZRU in terms of falling revenue. “If we had to make any further changes, it is likely that we would have to look at these areas. Clearly, we can’t make any firm commitments given the deteriorating economic environment but we have a very strong desire to avoid making changes which will impact these areas.”