Counties Manukau Rugby will announce a significant operating surplus for 2011, a sign the union has piloted its way out of financial trouble.
Chief executive Andrew Maddock was reacting to a report in yesterday's Herald, which revealed that 10 of the 14 ITM unions were operating at a deficit and the accumulated losses were just shy of $3 million.
That result was based on the last set of financial statements to be registered with the Companies Office. For the year ended December 31, 2010, Counties posted a deficit of $98,020, following on from a $443,249 loss the previous year.
Maddock said he was on the verge of signing off the union's 2011 financial statements and they painted a far rosier picture.
"Even the 2010 accounts didn't really show the true picture because we had a significant operating surplus, but we ended up writing off some old assets," he said.
"We were still tidying up some old issues but we were starting to trade profitably even then."
Far from being in danger of insolvency, Maddock said Counties were moving towards long-term sustainability, something many other unions are struggling to do as revenues fail to keep pace with player costs.
"We will have the audit signed off on Monday, but we will be declaring a $120,000 surplus for 2011. The actual operating surplus is substantially more than that but we've again used the opportunity to write down some old assets."
Counties are expected to post a surplus again in 2012, having secured a lucrative stadium naming rights sponsor for the former Bayer Growers Stadium in Pukekohe. That three-year deal, plus other sponsorship packages, is expected to see the union "significantly over-achieve" on commercial revenues for 2012.
Manawatu yesterday announced they will post a surplus in excess of $130,000 after posting negative equity levels since 2008. Chairman of the MRFU, Steve Morris, said they had fought back in large part because they had pulled $1 million in costs off the books in the past year, most of that coming from reducing player wages.
Counties have also made big cuts on the player wage bill. Although there is a salary cap of $1.3 million, Maddock said that figure was meaningless to them as it was significantly more than the 36 per cent of revenue allowed by the collective agreement that governs the ITM Cup.
"I wouldn't say we've slashed costs because we were never that high, but last year was lower than the year before and this year will be another $100,000 lower.
"It's likely we'll get to our target of a $700,000 team by 2013. This year, we'll be slightly higher than that, but not too far away."
The impending liquidation of the Otago Rugby Union has cast a pall over provincial rugby this week and the microscope has been trained on unions that have been living beyond their means.
While revenue from grants and charitable trusts has been reducing, Maddock concedes the unions are still reliant on them.