A regular payout from the Blues Super Rugby franchise could go a long way toward helping Northland Rugby Union balance their books in the future if a deal under negotiation can be completed.
NRU chairman Andrew Golightly met his counterparts in the Auckland and North Harbour Rugby Unions on Saturday to
further discuss a deal they hope to sign off later this year, if all parties continue to agree.
The deal would give the Auckland Rugby Union greater control of the day-to-day running of the franchise, while guaranteeing Northland an annual payment. At the moment the payout amount is decided annually and depends on the franchise's financial performance.
"The plan is that Northland would receive an annual payment that we could budget for accordingly," Golightly said.
Payments from the Blues to their stakeholders have varied wildly over the years.
"The challenge for Super Rugby franchises has been whether to try and make a distribution to the stakeholders or to re-invest surplus money back into the business," he said.
After recording a $63,000 cash loss for the 2010 season, the deal could be in time to help provide extra income for the NRU's 2011 season.
"It forms another part of helping us address what was a negative balance sheet for the union last year," the chairman said.
Any deal is subject to NZRU approval and only can happen if the national body devolves its shares to the three provincial unions but the move fits with their plan for the Super Rugby to become more financially responsible.
If the deal goes ahead, Northland would become a feeder union to the franchise. The union would sign away its equity in the franchise but it would still participate fully in the rugby programme and providing players for the Blues and Blues' development squads.
Importantly for Golightly, who has said that the NRU must be back in the black this season, the NRU would also be signing away any potential liability if the franchise recorded a loss.
"If there was a significant loss, then that would put pressure on the unions within the franchise," he said.
If the deal went through, Northland would also give up their seat on the franchise board and would have to rely on other ways of maintaining their involvement in the franchise.
