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Super 15 franchises on sale

LICENCES to run New Zealand's five Super rugby franchises could be on the market as early as the end of the year.

New Zealand Rugby Union chief executive Steve Tew said the board had given approval to continue working on ways to "sharpen up the governance" of the Blues, Chiefs, Hurricanes, Crusaders and Highlanders.

However two things remained sacrosanct: the franchises would still be owned by the NZRU and the players would still be centrally contracted.

The union believes central contracting has provided the All Blacks with a significant competitive advantage over their rivals.

It raises questions as to who would be interested in buying a licence with those sorts of restrictions but the NZRU will soon find out when they test the marketplace.

"We are short of fresh capital or equity in these businesses and we have to find some way of injecting that into it," Tew said.

"We've got an issue around the long-term financial survival of the franchises if the current economic environment continues and we've got to find a way of improving that."

The board, which met in Auckland on Friday, agreed the NZRU should work towards inviting parties at the end of the year to express interest in holding a licence.

It would be a similar set-up to the A-League, Australia's professional soccer league that includes the Wellington Phoenix. The licence-holders would be able to try to recoup money through merchandising and commercial deals, though those would no doubt be vetted by the NZRU so as not to conflict with deals they already have in place.

"In effect what we are looking for is to determine ... the best structure and capital base for our five franchises moving forward given the challenges they have in front of them," Tew said. "We are looking to sharpen up the governance structures to make sure we've best possible administration and the most cost-effective way of running these franchises."

The feedback from the provincial unions was tabled with the board and while there was a varied response to the idea of private licence-holders, Tew said they all acknowledged franchises could not continue to run at a loss.

Tew said budgets were the focus of the board meeting, with the NZRU continuing to act cautiously as the global economy continues to struggle.

Significant cuts would not be made in 2012, but nor would there be significant growth.

Tew said that despite the country basking in the glow of a well-run tournament and, to date, a successful All Blacks campaign, there was no immediate opportunity to leverage the positive feelings for financial gain.

"There's a medium-term opportunity for provincial unions to benefit from this. If we can go on and finish the job on Sunday, the game will be in a really good space to be stronger commercially than it is," Tew said.

"Obviously if we are successful on Sunday, the All Black brand is certainly enhanced but we need to also be able to sustain not winning, because that's the experience we've had previously."

A high-performance strategy for 2012-2016 has also been signed off. It includes an emphasis on sevens as the NZRU looks for Olympic gold in Rio de Janeiro in 2016.

Franchise rugby

  • Kicked off as Super 12 in Palmerston North in 1996 when the Blues beat the Hurricanes.
  • Last year running the competition contributed $1 million to $9.4 million NZRU operating costs.
  • Money from five-year US$437 million broadcasting deal helps fund the competition.

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