Gregor Paul is one of New Zealand’s most respected rugby writers and columnists. He has won multiple awards for journalism and written several books about sport.
OPINION
There was a football code war back in the 1980s and early 1990s, and league would have been the winner had rugby not reacted by turning professional.
Opening the door to money was the only way rugby could save itself – and reassert itself as the undisputed dominant collision sport in New Zealand.
But 28 years on, a war that appeared to have ended, may now be ready to break out again and rugby’s position in New Zealand could, in the next decade, find itself under a renewed threat from league – but one that it cannot repel this time.
The second coming of league has wrongly been predicted many times before, but the preconditions to support a resurgence have never previously been this favourable.
Never in the last 30 years has league looked so strong, rugby so weak, and never has the former led the latter in every key metric, bar one.
The NRL is Australasia’s most powerful football competition, having presence and support not only across Australia, but a growing market of players and fans in New Zealand, Papua New Guinea and the Pacific Islands.
It has locked in strong revenue flow for years to come, has detailed and viable expansion plans, a growing audience, almost half of which is accessing the sport via free-to-air channels and a simple product that has black and white rules that require little interpretation.
It has strong, vibrant, dynamic leaders, is witnessing participation growth at all age-groups – both in Australia and New Zealand – and it has community alignment and connection between the grassroots and professional game.
Rugby, in comparison, has no clear strategic vision for Super Rugby Pacific. It is riddled with debt at all levels on both sides of the Tasman and has an uncertain financial future as so much of its income depends on securing an improved broadcast contract in a non-competitive market.
New Zealand’s financial future is also heavily compromised by its decision to partner with Silver Lake, as it now only owns 92.5% of its revenue.
Rugby has a broken connection between the grassroots and professional levels, and while female participation rates are growing, teenage boys are turning off the game in unprecedented numbers.
The sport’s leaders have spent the last year fighting over how to appoint the next leaders and possibly most damaging for rugby, it has found itself in an ideological crisis around its very essence – divided on whether it wants to empower its officials to deliver an aerobic, fast-moving game or continue to interpret the laws in such a way as to favour power players and anaerobic athletes.
Rugby’s only trump card in its battle to ward off the threat of league is its broader and more meaningful international set-up, which continues to be its most important player retention tool, aspirational force and financial generator.
Rugby is teetering on the brink of terminal decline – of being pushed to a point where it loses its status as the preferred collision sport for New Zealand’s youth.
Having only ever enjoyed life as the country’s national game, and the preferred sport for teenage boys – revered and ingrained in New Zealand’s largest single-sex schools – such a claim seems hyperbolic and unlikely.
But the statistics and anecdotal evidence already suggests that rugby is no longer the preferred sport of teenagers today, and that league is closing the gap as the preferred football code.
Critically, league is winning the hearts and minds of New Zealand’s Pasifika and Maori communities, arguably because it is better at ensuring that the people who invest their time in the grass-roots via volunteering, watching and supporting, are the same people who are also investing in Warriors and Kiwis tickets.
It matters that the people in the stands at Mt Smart Stadium are the same people on the touchlines earlier in the day at club grounds, whereas rugby seems to have distinct and disconnected factions, with the community game consistently saying it has been detached from the professional game, and ultimately not cared for to the same extent as it once was.
It’s not quite game, set and match league – not yet at least. League has one critical blow left to strike.
One of the NRL’s expansion teams is going to be in Christchurch and having two professional teams in New Zealand could potentially change everything.
There will be an increased intensity in the player market – another cashed-up club looking for talent, and inevitably, the number of young rugby players willing to convert or defect to league will significantly increase.
It is neither fanciful nor dramatic to project that league, by the end of the next decade, if not sooner, could have usurped rugby as New Zealand’s dominant and most popular collision-based, football code for males.
Rugby is facing real and present danger – one it can survive, however, but only if it shifts quickly and decisively to address the existential threats.
10 Reasons league is ready to usurp rugby as NZ’s dominant code
1: Financial firepower
The NRL made a surplus of AS$58.2m ($63m) in 2023 – and made a surplus of A$62m in 2022, and A$42m in 2021.
New Zealand Rugby [NZR] lost $9.7m in 2023, $47m in 2022, and $34m in 2021.
The NRL’s total surplus for the last three years is A$162m; NZR has lost $90m.
2: Financial viability
The NRL has three years left to run on its broadcast deal, which is worth $2 billion – or $400m a year.
It has also diversified its revenue by buying several hotels and has made provision to ensure income is not diluted by expanding to 20 teams.
NRL chair Peter V’Landys also told the Australian Financial Review that the deal has ongoing negotiable elements to it, suggesting that any expansion could trigger a higher payment from broadcast partners.
“Rights are pretty well dynamic. Even though you’re in a five-year term, there’s variations that can happen,” he said.
“We introduced a 17th team, for example, which increased our media rights from some of the broadcasters.”
NZR currently makes around $270m a year, but consistently spends more than it earns.
It struck a deal with US fund manager Silver Lake to fund new opportunities streams and maximise returns from existing streams.
It is not clear if it has developed any new proposals, and while the NRL has trusted in the reliability of bricks and mortar to keep the money flowing, NZR chief executive Mark Robinson has talked mostly about exploring digital opportunities, without ever being clear what they may be.
He told the Herald that while he was in the US recently, he visited Stanford University, where: “We spent two days on campus and then also in some working-dinner situations with a whole lot of people who are venture capitalists working in AI [artificial intelligence], private equity, and design thinking.
“The meetings were to get a sense of what more broadly we could do around the game and how we could work more with New Zealand Inc, rather than just it solely being about the focus of the game inside the rectangle.”
There’s also mounting concern about NZR’s ability to improve or even retain its current broadcast income when it renews the deal for the 2026-2030 cycle.
The last deal, worth $100m a year, was negotiated when Spark Sport was in operation, but now that it has collapsed, there is no competition.
NZR needs to secure $108.5m just to retain its current value as private equity shareholder Silver Lake will be taking a 7.5 share of revenue by 2026.
There is one other significant challenge NZR faces, which is that it must negotiate a revenue sharing agreement with Rugby Australia, which currently has a deal worth A$29m a year – with few media rights experts forecasting that it will improve in the next cycle.
3: Access to content and ability to grow audience
NRL’s broadcast deal includes a mix of free-to-air [FTA] and subscription content, with the former attracting an audience of 93.2 million viewers last year, with the total audience for NRL games coming in at 171.8 million.
Rugby’s deal is mostly behind a pay-wall with Sky, although it does offer Super Rugby FTA content through its non-subscription channel, Sky Open.
After 10 rounds of Super Rugby this year, Sky revealed there had been an 11% lift in audience, with 1.67 million people having watched Super Rugby.
League promotes itself to the masses, rugby restricts itself to the rich.
4: Strategic vision
The NRL has a clear, considered and viable long-term plan to expand to 20 teams by the end of this decade.
A team from Perth, a team from Papua New Guinea and one from the South Island of New Zealand are the likely entrants.
Super Rugby will be played with 11 teams next year, with no articulated vision for what format it will take post 2025 when a new broadcast cycle begins.
5: Brand power
NRL’s annual report states that $362m was distributed to clubs, average attendances were 20,000, and all 17 clubs in the NRL made a surplus, with the average commercial revenue generated standing at $15.7m.
The Rabbitohs generated a total of A$23.5m ($25.6m) according to the Sydney Morning Herald, and just how strong a hold the NRL has in the Australian market was illustrated by the $23.5m of revenue the Dolphins collected in their first year in the competition.
The fact that a new club jointly topped the table of commercial income – taking $10.1m of sponsorship income alone – suggests there is an insatiable corporate appetite for the NRL in Australia.
It’s hard to make direct comparisons as Super Rugby clubs in New Zealand don’t receive or negotiate their own broadcast deal – but clubs can generate commercial revenue from sponsorships, gate revenues and any other streams.
But they all say it is hard to break even without hosting playoff games.
The Hurricanes, who didn’t host a playoff game, lost $1.4m in 2023, while the Melbourne Rebels went into administration.
6: Player payments
NRL teams have a salary cap of $11.25m. It is estimated that the highest-paid players receive around $1.3m a season, with the average $400,000 and the minimum $130,000.
The market is competitive and because club owners are able to make decisions about who to buy and what to pay, emerging talent can be offered big pay packets at a relatively young age.
Super Rugby clubs can pay players a maximum of $195,000 and a minimum of $75,000.
But these figures can be topped up by third parties, and those players who make the All Blacks will be topped by NZR.
The highest-paid players are therefore believed to have retainers of around $1m – comparable with the highest-paid players in the NRL – with mid-tier All Blacks likely to be on around $400,000 to $600,000 and younger players with limited test experience on about $300,000 to $500,000.
Rugby’s issue is that it operates on a hierarchical, pay-your-dues scale where players must make the All Blacks to open the door to big money.
7: Market forces
The NRL has afforded clubs leeway in the salary cap to recruit players from other codes, and most recently that has led to former Wallabies Carter Gordon and Mark Nawaqanitawase switching respectively to the Titans and Roosters.
But the narrative has been powerful and consistent, that many of New Zealand’s top rugby players are big fans of the NRL and attracted to it as a career option.
All Blacks vice-captain Jordie Barrett trained with the Melbourne Storm this year. Current All Black TJ Perenara was close to signing with the Roosters in 2021, and his teammate Caleb Clarke trained with the Rabbitohs in the summer of 2022.
“That’s definitely one thing that I’d love to do,” he said when he was asked about playing in the NRL.
“I’m a big Rabbitohs supporter and I talk to the Rabbitohs boys every now and then. So yeah, I’d love to and I don’t know when but it’ll definitely be something that I want to tick off as a life goal.”
The NRL derives huge kudos and reputational gains from All Blacks promoting the competition and it sends strong signals about which code is the dominant partner, as rarely do any NRL players tout their desire to be All Blacks.
Rugby’s one big NRL acquisition in recent times has been the signing of Joseph Sua’ali’i, while Kayln Ponga once said he was interested in being an All Black, before signing an A$5m ($5.45m), five-year deal with Newcastle Knights.
8: Participation rates
Rugby has lost its place as the preferred sport for New Zealand’s teenagers.
Basketball and football would be competing for that honour now, with the former having 26,000 registered secondary school players, whereas rugby, according to NZR figures provided to the Herald, had 23,403 males secondary school players in 2021 – a figure that is believed to have dropped in the last three years.
The latest figures show there were 164,454 registered football players in New Zealand, and 147,434 registered rugby players.
But rugby’s place as the preferred collision sport is also being challenged by league – which has seen its total participation numbers climb from 24,000 in 2018 to 40,000.
The popularity of the game among teenagers can be seen in the growth of the secondary schools’ tournament – recently won again by St Thomas of Canterbury – with the number of participant schools having climbed from 24 in 2018 to 60.
9: Connecting with the young
League is connecting with teenagers in a way rugby isn’t. And unlike rugby, it is managing to avoid fostering the same fears among parents about head injuries.
The NRL’s story is well told, and the sport is supremely well marketed through concepts that are authentic and appropriate for its fan base.
It was the NRL that came up with the super round, the indigenous round and all the other themed weekends.
Super Rugby is trying to take what works in league and unsuccessfully transpose it in union, and without having carved out its own identity, or built the same suite of media programmes to engage audiences and flood social media channels, it’s no wonder that New Zealand’s most promising schoolboy rugby players are just as likely to end up playing in the NRL as they are the All Blacks.
Leading rugby agent, Craig Innes, who himself played for the All Blacks before defecting to league, says that many elite teenagers playing First XV rugby are code-agnostic – that they are ambivalent about whether it is league or union, they just want to be professional athletes playing a collision sport.
“I don’t think that is anything new,” he says. “It’s the razzmatazz of the NRL, the way it is marketed. The colour, the vibrancy – so it is appealing to a lot of people and the NRL is across almost every sports channel.”
10: Embracing and empowering Pasifika
League changed its eligibility laws to enable players of dual heritage to represent another nation and instantly made Tonga and Samoa credible, international contenders.
Rugby‘s established heavyweights – New Zealand, Australia and France – on the other hand, continue to want to take the pick of Samoa, Tonga and Fiji’s best players for themselves and do little to help these nations grow as international entities on the world stage.
