New Zealand Rugby (NZR) has announced its first operating profit since 2008, with the governing body citing its controversial new shirt sponsorship deal with AIG as having played a key role in the turnaround.
Following 2011?s operating loss of NZ$3.1 million (US$2.6 million), NZR has budgeted for a break-even mark in 2012. However, this has been exceeded as the organisation reported a NZ$3.2 million (US$2.7 million) profit.
Tuesday?s announcement comes with the iconic All Blacks jersey now carrying a sponsor?s branding for only the second time in its history after the New Zealand Rugby Union (NZRU) confirmed a five-and-a-half-year deal with insurance company AIG in October. NZRU chief executive Steve Tew had said that the deal represents world rugby?s second most lucrative commercial partnership behind the body?s own agreement with Adidas, but it was the inclusion of the AIG logo on the front of the All Blacks shirt that proved contentious.
While the logo of beer brand Steinlager was emblazoned on the right side of the jersey during the mid-1990s, the famous All Black kit had remained clean of a sponsor?s brand on the front of the jersey since the team began playing in the late 1880s. However, Tew highlighted the importance of the deal when commenting on the current financial position of New Zealand rugby.
?This is an extremely satisfying result and underlines our success in driving greater commercial revenue and containing our costs,? said Tew. ?We are now in a much stronger financial position. The new partnership with insurance company AIG has made a difference. Significantly, we have secured a major portion of our commercial revenues over the medium term through the relationships with principal partner Adidas, broadcast partner Sky and now AIG.?
Tew continued: ?It?s important to remember that in recent years we maintained an annual investment of around $19 million in funding to Provincial Unions and Investec Super Rugby franchises in order to safeguard the game during challenging times. The consequence of that was a reduction in reserves and successive operating losses. That was clearly not sustainable. Our improved position gives New Zealand Rugby a sound base to make decisions on future investment in the game. We will now take the time to review an appropriate level of reserves for an organisation of our size and risk profile.?
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AIG deal aids return to profit for New Zealand Rugby
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