KEY POINTS:
The New Zealand Rugby Union (NZRU) is tightening its belt to minimise the negative impacts of the worldwide economic downturn.
The union's board decided here today to reduce its spending for this year in the hope of saving $2.6 million.
NZRU chief executive Steve Tew today said about $1m of those savings would be made at NZRU headquarters and included a wage freeze on all employees.
He said the remainder of the savings would largely be made on the "professional and administrative sides of the business'.
There would be reduced spending on professional rugby activities such as development camps, some assembly costs for national training squads and development programmes.
"For the time being we have been able to protect provincial union grants and community rugby," Tew said.
He said the union signalled last year that it had significant amount of revenue at risk and it was now apparent that some of that revenue would not be delivered this year.
This included lower interest income, sponsorship and offshore match revenues, due to the deteriorating financial situation in the northern hemisphere.
Tew said the measures would mean hardship for some sections of rugby at national level.
"That is regrettable and comes at a professional and, in some cases, personal cost to those involved. But these decisions have not been taken lightly.
"The situation we face is the same as any other organisation in this country, and, in fact, globally.
"We have to cut our cloth to fit and that means having to make hard decisions about some activity and prioritising some areas of our current activity over others."
Tew suggested that overall the organisation's financial position was not too bad considering the prevailing economic climate.
He said the NZRU's balance sheet remained healthy and a "modest" profit would be announced at its annual meeting in April.
"That is a turnaround of the last couple of years when we budgeted for then delivered losses, albeit smaller than we originally thought."
He said the NZRU's cash reserves stood at $55m.
"A lot of our revenue is locked up for at least the next two years and in some instances a lot longer than that.
"Compared to some organisations we are actually in pretty good shape, but we are not at all blind to the continual pressure coming on ourselves and the wider rugby community, particularly the provincial unions and our (Super 14) franchises."
Meanwhile, the NZRU and New Zealand Rugby Players' Association today also announced an extension of the terms of their current collective agreement for one year until the end of 2009.
- NZPA
