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| Mid Canterbury union watching the pennies carefully |
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By Jonathan Leask February 3, 2012
"We are reasonably comfortable," Mid Canterbury chief executive Ian Patterson said. "The books are away at the auditors but it is looking like we will post a surplus for the year." Mid Canterbury's position mirrors that of the other Heartland unions, Patterson said. "Over the last few years we have been operating at a break-even level. "The Heartland unions are all operating like that. "If they record a financial loss one year, they can generally recuperate the losses and make a profit the next. "We had recorded minor losses the two previous seasons but that will be offset after last season." Patterson suggested that the Heartland unions are not the ones in trouble. "We are in a sound position but it is challenging times. "It is getting harder to find the revenue you need in this tightening economy, with everyone being more conservative. "It's at the ITM Cup level that the finances are getting chaotic." It is not the small unions at the bottom of the food chain struggling; it is the top echelon that is in trouble, the professionals, not the amateurs, with cries of poverty amidst overspending. The New Zealand Rugby Union (NZRU) has said that the majority of its 26 unions have posted losses and half a dozen have been given loans in recent years. Earlier this week it was announced that the Otago Rugby Union will be the latest to receive a bail-out by the New Zealand Rugby Union, in the form of a loan, after losses totalling $4 million in five years and the Otago union is signalling it will post another significant loss next month. Southland overpaid their talent despite being under the salary cap in 2010, owing creditors $700,000 and faced insolvency after it was revealed it could not pay its debt. Waikato followed suit in 2011, while Canterbury was also bailed out, but they had external influences causing their major losses last season. Bay of Plenty and Tasman have also been the benefactors of a handout in recent seasons. Patterson said it is a simple solution, unions need to learn to live within their means. "At that level it is a business and in New Zealand rugby they haven't found a successful business model yet. "That is the reality in professionalism. "They have to try to balance success with affordability and that is where some have gone wrong. "You can't spend what you don't have." As Super rugby expands, the tri-nations becomes a four-nations and the downward economic spiral continues in the provinces, Patterson offered a possible solution. "The likes of Auckland, Waikato, Wellington, Canterbury and Otago are all trying to promote super rugby in the same market as their ITM Cup teams. "I've heard suggested that super rugby should become the level where rugby becomes professional and the ITM Cup step back toward amateurism." Mid Canterbury almost had the opportunity to enter the professional realm in 2010, when it was proposed to return to a three tier provincial competition. A decision to stick with the status quo of the provincial structure may have saved Mid Canterbury from a similar fate, if not financial ruin. "At ITM Cup level they have player salaries ranging from $15,000 to $50,000, some less and some could be paid more. Under the player collective, a revenue sharing system whereby all professional players are guaranteed payment, Mid Canterbury would have had to have a base-wage for each member of its 24-man squad, a figure that would have surely put a heavy strain on the purse strings. However, that is where the problem arises as some players are deemed to be or demand to be, worth more than the "base-rate" and so go to the market for a better price. The competition for a player's signature puts the price up and that is when the unions have to decide whether it is worth forking out more to keep a player to remain successful, or offload the player to remain financially sound, Patterson said. Under the current format, Mid Canterbury does not have that problem. Currently Mid Canterbury follows the Heartland protocol whereby players are amateurs and not paid, but they do receive refunds for their expenses. "They aren't being paid to play. They receive remuneration of expenses which is set at $100 a week." Its a small figure that proves manageable on top of all the other cost of running a union. Without the pressures of professionalism, Mid Canterbury has been able to sustain its finances and their focus remains on the on-field success, not what is in the coffers.
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