Moller cool on windfall

The New Zealand Rugby Union has not factored into its future budgets the possibility of receiving a cash payment from the IRB for participating in the 2007 World Cup.

The IRB secretly agreed two years ago that the major unions - England, France, New Zealand, Australia, South Africa, Ireland, Wales and Scotland - would be paid up to 3 million ($7.8 million) in recognition of the revenue they generate by playing in the World Cup.

But NZRU chief executive Chris Moller says the payment is dependent on the financial success of the tournament.

Moller says: "We've not even bothered to include it in our financial forecast. It will be icing on the cake if it was received. In our minds we would say it has contributed significantly to the costs we have incurred round the World Cup and possibly a bit more. But we won't think too much about that until the outcome of the tournament."

The fact the NZRU isn't budgeting for any cash windfall suggests there is limited confidence there will be surplus profit from the 2007 tournament once the IRB and the host union, France, take their cut.

Where there is no doubt, however, is on the principle of the payment. Moller firmly believes the right decision was made by the IRB to sanction the potential pay out.

The major unions have lobbied for a payment for several years, arguing that their presence at the World Cup is a major draw for sponsors and broadcasters. They also argue that they incur preparation costs and that the Northern Hemisphere unions suffer a double whammy by missing out on hosting tests against Southern Hemisphere opponents.

Scotland, Ireland and Wales all suffered significant financial losses in 2003 as a result of missing out on around 6 million of gate receipts they normally would have taken from their November test programme.

Moller says: "Ireland, Scotland and Wales made huge losses in World Cup year. Why should they? They incurred big losses by not hosting Northern Hemisphere tours.

"This has to be seen in the context of the totality of global rugby. Up until now all of the proceeds have gone to tier two, three, four, five and tier six nations. It cost us, from memory, about $2 million preparing for the 2003 World Cup."

Moller said the NZRU hasn't had any board level discussions about what it would do with the World Cup payment should it receive one. All 20 countries received 250,000 ($650,000) for participating in the 2003 World Cup. That payment will be made again in 2007.

But by then, the NZRU may have more pressing financial concerns. In 2006 it will begin a new broadcast deal with News Corp for the Super 12 and Tri-Nations. That new deal will see it receive roughly US$21million ($28.5m) a year.

The current deal, though, was fixed at a conversion rate of 42 US cents. The Kiwi dollar reached an unprecedented high of 74 cents last week, meaning that, if it stays at that level, the NZRU would only receive $28 million annually from broadcast rights.