Rugby league: Tiny surplus forces NZRL to think again

Phil Holden says the league has to be able to financially support the seven zones that service the game's grassroots needs. Photo / NZME.

Key goals considered unrealistic in current financial position.

Harsh realities have forced the New Zealand Rugby League to rethink its strategic plan through to 2017, with several key objectives considered unrealistic from its current financial position.

The NZRL's annual financial report released this week revealed a modest surplus of $16,000 for 2014-2015, leaving goals set within the 2014-17 strategic plan - of building $10 million in revenue and a $2 million surplus by 2017 - in tatters.

The NZRL accepts those objectives are now unachievable, together with the aim of making the seven zones that service the grassroots needs of the game nationally financially independent by 2017.

"The board have recognised the reality of our position and we acknowledge that building those surpluses is probably unachievable," said NZRL chief executive Phil Holden. "Certainly $2 million, but we are confident we'll get to a position that will be sustainable for the organisation moving forward with a focus on 2017.

"We recognise that the zones will never be financially independent of the New Zealand Rugby League. The NZRL will always need to be in a position, and has to be in a position, to support them financially.

"We reviewed that [strategic plan] independently towards the end of last year so we've got a clearer understanding of what's achievable and that's what we're focusing on."

Compounding its financial woes is the need for the NZRL to amass $1 million to support the co-hosting of the 2017 World Cup, and it also hopes to finish repaying a $250,000 bank loan against its Beasley Ave Rugby League House headquarters.

Holden downplayed questions raised by independent auditors in their last two annual reports over the sustainability of the NZRL, concerning "material uncertainties that may cast doubt about the society and group's ability to continue as a growing concern".

"They are potentially being really cautious rather than reflecting the reality of sport in New Zealand," Holden said. "We've got a long-term approach - 2017 is a few years away yet so we've got some runway but it is not without challenge.

"In terms of the auditors' comments, we're no different to any other sporting organisation across the country. The advantage we have over most is that we've got an asset in terms of the building and, secondly, we have a property in the Kiwis team which is commercially attractive. So the auditors' comments need to be seen in that light."

Creating new and enhancing existing revenue streams is the obvious remedy to the financial burden of supporting the seven zones, and to improving the NZRL's bank balance, but Holden was unable to comment on any commercial opportunities it might be exploring.

Sport NZ is aware of the NZRL's position but chief executive Peter Miskimmin said it had no immediate concerns and remained confident in its ability to improve finances.

"We've got confidence in them and they obviously keep us informed of what's going on and we leave it to them now to run their organisation," said Miskimmin.

"They wouldn't be alone [in their struggles]. Football is another one, even the Olympic cycle, when every four years you have a large cost [and] your finances have to be managed across that four-year [period].

"They will need to build up around $1 million or the $900,000 for the World Cup campaign. It's only a couple of years away now so we'll be watching that with interest."