What can New Zealand learn from Japanese rugby?

Recently Otago Rugby Football union managed to stave off liquidation as well as potentially an end to 131 years as one of New Zealand’s most well supported rugby institutions.  Despite this miracle, it is still facing $2.35 million in debt, with that figure apparently potentially rising above $3 million soon. It is obvious that New Zealand provincial rugby is in dire straits. Otago are not the only ones suffering financially. The plight of many of the smaller unions has been well publicised over recent years. New Zealand may be the reigning champions on the field, but they are falling behind off it. So, what exactly is the problem?

The problem does not lie so much with the Super Rugby Franchises. By and large these are well run with the top players in New Zealand contracted to the National Rugby Union and then leased out to the Franchises (this why the top players are well distributed throughout the 5 franchises). The problem is with the domestic provincial unions such as Otago, Manawatu, Tasman, Bay of Plenty, Southland and Hawkes Bay.

New Zealand provincial unions have had a problem with putting bums on seats in recent years. Attendances in general have been low, and despite optimism that attendances will rise following recent World Cup glory, a nation with little over three and a half million (spread over a vast landscape) is going to find it difficult/ near impossible to achieve the attendances being seen in the Home Nations let alone some staggering numbers seen in France. Therefore, they will never come close to earning a similar match day revenue.

This increase in revenue has led to a huge increase in wages being seen in Europe and Japan over the last decade.  How can New Zealand unions compete? This is a huge problem for NZ rugby administrators. The reality is that they can’t under their current guise. While the lure of the Black jersey has been enough to keep a number of the top players signed on the books, the main problem area has been how the unions have dealt with those on the fringes of national selection (or even Super Rugby). Provincial unions have been lured into paying inflated wages for average players to keep their squads looking healthy from the European onslaught.

Otago in particular, who have been pining to return to their glory days were one of the unions who were a tad over-zealous and naive in this regard. Now they may suffer the consequences. However sad it may be to see one of NZ’s proudest unions go under (if it eventually does), maybe this is the moment rugby administrators in New Zealand need to have a cold hard look at how business is being conducted. There is no clear solution, but this has been a reality check and the options need to be looked at. While it is difficult to compete with European based clubs based on the current business model being used, there is one other strategy that may provide a brighter future financially, or at least keep these unions safer from disappearing completely, something we would all like to see. That would be private ownership of domestic sides as seen in Japan.

It may seem counter-intuitive, but Japanese rugby is perhaps a model which could succeed. Although they remain a tier two nation internationally, their domestic competition is flourishing both on the field and off it. Key to their success in the domestic market is that they have been able to lure house hold names from around the world to compete with their local talent.  Recently, one can count English International James Haskell and World Cup Winner Ma’a Nonu as world renowned players who have plied their trade in Japan. They have been able to do this because the league is made up of mostly company teams. They include the Sanyo Wild Knights, Richo Black Rams, Suntory Sungoliath, Sanyo Wild Knights, Toyota Verblitz, Coca-Cola Red Sparks, NEC Green Rockets, Fukuoka Sanix Blues and Toshiba Fuchu Brave Lupus.  While these names may seem rather uninspiring and it may seem even more hideous from some fans to ponder the existence of a Hitachi Highlanders at the Forsyth Barr Stadium, this may be the future. A look at most professional sports around the world shows that the team which prosper the most are the ones who are privately owned (most premier league football teams, basketball and NFL sides) or at least have ownership shared amongst their fans (for example FC Barcelona). This is not a guaranteed solution, but a glance at the balance sheets of most provincial unions in New Zealand proves that alternatives need to be looked at.