NZRU announces sale of Hurricanes to private consortium, Crusaders to follow soon

The Hurricanes and Crusaders Super Rugby teams will be managed by investor-appointed boards from next year as the New Zealand Rugby Union takes its first steps toward private ownership of the franchises.

The NZRU said today a license to manage the Hurricanes from 2013 had been awarded to a consortium led by the Wellington Rugby Union and including a number of high-profile business people.

The new entity, Hurricanes’ Investment Ltd Partnership is made up with 50 per cent of shares held by WRFU [Wellington Rugby Football Union], and 50 per cent private shareholders including Cohiba Traders represented by former Hurricanes chairperson, Paul Collins, ForsythMorison represented by former Hurricanes board member, Liz Dawson and Welnix, owners of the Wellington Phoenix [NZ's only professional soccer team, playing in the Australian A-League] represented by Gareth Morgan [Well known NZ economist, made a multi-millionaire thanks to the sale of his stake in his son's on-line auction company TradeMe].

The new board will be led by current chief executive of NZ Post Group and former partner of PricewaterhouseCoopers and chairman of Rugby NZ 2011 Ltd, Brian Roche.

‘‘The announcement today represents a new phase in the development of the Hurricanes,’’ Roche said.

‘‘It’s a privilege for us all to be associated with the opportunities the license arrangement provides.

‘‘This will ensure that the Hurricanes continue to be a key part of the image and brand of the region – in perspective of both our rugby profile and the economic impact the team brings to the region.’’

Agreement in principle has also been reached to allow a consortium to take over the Crusaders which, with seven championship titles, is the most successful team.

The new owners will have the power to select players, market their teams and promote matches, retaining ticketing and sponsorship revenues.

The NZRU will retain ownership of the team ‘‘brands’’ and pay players and coaches from broadcasting revenues.

Since rugby became professional in 1996, New Zealand’s five Super Rugby teams have been owned by the NZRU and managed by boards representing the provincial rugby unions in each team’s region.

The NZRU conducted a review earlier this year into the structure and financial sustainability of its Super Rugby franchises which recommended a move toward limited privatisation to attract new investment.

Monday’s announcement of new operators for the Hurricanes and Crusaders mark the first steps toward a new ownership model.

‘‘Our aim at the start of this process was to ensure franchises could benefit from being run by independent boards with an improved mix of commercial, marketing and management expertise with an injection of outside capital to strengthen their financial performance,’’ NZRU chief executive Steve Tew said.

‘‘We were looking for stronger governance at the board level, fresh thinking and new investors and the Hurricanes consortium certainly delivers in that regard.’’

Tew said rugby operates in a highly competitive market for the attention of sports fans.

‘‘This move gives the game at the professional level a better chance to be run profitably, to build on its appeal to fans and to enhance its ability to feed a winning All Blacks team,’’ he said.

‘‘These new arrangements are a step forward in terms of putting Super Rugby on a stronger financial footing to ensure the game at the professional level is better placed to prosper and deliver for its fans.’’

The final license agreement around the Crusaders is expected to be signed within a month, Tew said.

A mixture of international and domestic interest has been shown in the license for the Auckland Blues but no bidders were secured for current Super 15 champions the Waikato Chiefs.

The NZRU will retain ownership of the Otago Highlanders. ]since they had to bail the team out last year]

‘‘We expect a bid for the Blues will be submitted to allow a license to be issued for 2014,’’ Tew said.

‘‘However, it is disappointing the Chiefs were not able to finalise a bid.

‘‘A new, commercially-focused board has been appointed by the NZRU to build on the great success the Chiefs enjoyed this year both on and off the field.’’

The new owners will have an option after their first three-year terms to extend their licenses for a further five years.

Brendan wrote:I think Its interesting that the wages will be paided from the Broadcasting. Is this likely to be realistic to run as wages are going to go one way.

Also think it will be to much conflict as players will be rushed back by the Franshise.

As the NZRU is paying the wages I assume they pick who goes where.

Intotouch wrote:What's the motivation for this? Excuse my ignorance please. I would have thought that the NZRU would make as much money from their national side as they need to support their franchises. The IRFU still spends far more on the pro game than it gets but the national side makes up the loss. Lose control of the franchises and you're into club v country arguments pretty damn fast.

A new "investor" and the spectre of a new boss were key features of a number of sweeping changes announced today to Christchurch-based Super Rugby franchise the Crusaders.

As already foreshadowed, the franchise confirmed West Coast coal mine owner Brent Francis will underwrite the team which has adopted a new commercially driven focus.

The provincial unions and foundation members of the team - Canterbury, West Coast, Tasman, Mid Canterbury, Buller and South Canterbury - have formed a new limited liability company, which will run the franchise.

The New Zealand Rugby Union will still own it.

However, the national rugby body has decided to grant the new provincial union consortium a licence to run it until 2020, much in the same way it granted the Wellington Rugby Union and a group of private investors power over the Hurricanes. While on the face of it little will change for fans of the team, the same can't be said for its backroom.

The new board will appoint a new chief executive, according to today's press release, although there were rumours long serving chief executive Hamish Riach had already nabbed the job.

Francis will join a new look board made up of two Canterbury Rugby Union representatives, two independents and one appointed by the consortium. The licensee's responsibilities will include management of the team both on-field and off-field, including the professional development of members of the squad and marketing and promotion of matches.

The licensee will retain most of match gate takings and some sponsorship income and also pay administration staff and additional coaching and management staff, fund training facilities, match operations and marketing costs.
The NZRU will continue to retain ownership of the brands associated with each team, continue to pay player and coach contracts from centralised broadcasting and sponsorship revenue and continue to pay all travel and accommodation costs associated with the regular season.

CRFU chairman Stewart Mitchell said this licence agreement is the best possible outcome for all of the provincial unions involved.

"This will give the provincial unions involved real input in the future of the Crusaders. Each of the provincial unions that make up the Crusaders region has committed to the new structure, so we are all in this together.

"The provincial unions, as the custodians of rugby in this area, were keen to see that we all remained involved in the management of the Crusaders.

Ad Feedback "We are obviously all huge supporters of the Crusaders and we believe that it is in the best interests of this great rugby organisation that decisions around its future continue to be made by the rugby unions that have always been at the heart of it."

Francis declined to comment but in a written statement said: "I am thrilled to be involved in the new Crusaders limited partnership. As a Crusaders fan, I am happy to be able to help ensure the future viability of this great rugby organisation."

- © Fairfax NZ News

profitius wrote:So whats in it for the businessmen?

Peter Seabiscuit Wheeler wrote:

profitius wrote:So whats in it for the businessmen?

Most of the match takings and sponsorship at low risk