Are the All Blacks about to be spear-tackled by the Northern Hemisphere? (image: Getty)
Are the All Blacks about to be spear-tackled by the Northern Hemisphere? (image: Getty)

BusinessNovember 8, 2019

The All Blacks’ success masks long-term decline for NZ rugby. Is it terminal?

Are the All Blacks about to be spear-tackled by the Northern Hemisphere? (image: Getty)
Are the All Blacks about to be spear-tackled by the Northern Hemisphere? (image: Getty)

A combination of bad demographics, financial pressure and a decade’s old bill coming due make the new NZ Rugby CEO’s job infinitely harder than that of the next All Blacks coach, writes Duncan Greive.

Thirty years ago, the CEO of what was then known as the NZRFU had perhaps the greatest sports administration role in the world. Rugby was easily the biggest sport in New Zealand for every demographic it cared about. Club rugby was part of the fabric of life in big cities and small towns alike. The provincial game was incredibly strong on field, with Auckland in the midst of the greatest Shield run of all time, with the rest of the country’s desire to end that drawing big crowds to NPC games around the country. The All Blacks were the inaugural RWC champions, and the biggest draw in the sport anywhere in the world. 

Best of all, players were amateur, spilling blood and sweat for the glory of club and country. So long as the provincial unions were happy (and why wouldn’t they be, with those factors in play), the CEO’s job was to gaze at a system he owned as of right, one which had worked for a century and sure looked like it would work for a century more.

When he starts in earnest in 2020, Mark Robinson, the incoming CEO of NZ Rugby, will inherit an organisation beset by problems on almost every one of the fronts which once protected it. Rugby clubs are shutting or sparsely populated, particularly in the big cities. Auckland, once a rugby powerhouse, is a long-running embarrassment and thus growing somewhat indifferent to rugby as a code. The only bright spot is that the All Blacks are unquestionably in better shape than they were thirty years ago, a global powerhouse brand which generates huge amounts of cash for its parent. And yet even that success is not able to mask the rot beneath, and, in truth, the emphasis on the All Blacks over every other part of the rugby ecosystem is part of the reason rugby is in such a state. 

All this began with professionalism. As described in Peter FitzSimons’ riveting The Rugby War, the extraordinary billionaire power plays which impacted sport in the 80s and 90s, such as world series cricket and Super League, arrived at rugby’s door in 1995. The sport came within hours of being stolen away from the unions and privatised. But having committed to paying players, the NZRFU made a fateful decision to take the money on offer from the startup Sky TV, one which would have far-reaching consequences which echo to this day.

By putting its core product behind a paywall, rugby became a kind of luxury brand (albeit with mass reach), its premium product only available to those with the financial means to afford it. Worse, so that Sky could recoup its own investment, the best games were scheduled for an hour which advertisers found desirable – after the bedtime of many children. Thus the pipe of talent and interest which had sustained it for generations sprung a leak. No one really worried at the time, because the cost of this loss wouldn’t become due for decades, while the challenge it confronted was immediate and visceral.

For the next 15 years, the troubles weren’t evident. A new product was launched in Super Rugby, and crowds were big and boisterous. We overlooked the fact teams all had the same uniforms and sponsors, simply with the colours and names swapped out. It was only when All Blacks started to be held out of large chunks of the season, or play indifferently for the Super sides and superbly for the national side, that the message began to be received by fans that this wasn’t the main priority.

This commenced a period in which the All Black brand became a global powerhouse. Deals with Adidas and then AIG (successfully reputation-laundering after a key role in the genesis the GFC) brought tens of millions, but also made the whole of NZ Rugby effectively a support and marketing arm of the All Blacks.

Crowds and ratings began to dwindle, but Sky subscriptions remained strong, and thus revenues continued to grow healthily. When in 2011 the All Blacks won a tense home RWC final, it felt like rugby was at its zenith – a generation of coaches and players, vindicated after a string of failures, with New Zealand hosting an acclaimed tournament which gripped the ‘stadium of four million’. 

Yet by the end of the same decade the cost of those decisions made in the 90s and reaffirmed ever since is manifestly obvious. A combination of the decline of mass media and the growth of minority sports’ ability to reach and generate fans means that the core rugby audience is now significantly older and more provincial than it was when the paywall was first erected. Inner-city Auckland pubs still overflow for sporting events – but they’re much more likely to be UFC fights (a sport which barely existed in the 90s) than Super Rugby games.

Extraordinary international leagues like the NBA and EPL now have all their games accessible on superb digital platforms, while rugby remains tied to Sky, which has only very recently started serious work on its digital infrastructure. The decision to renew its relationship with the broadcaster – and take a stake in it – means that its fortunes are more reliant on a turnaround (and generational change) at Sky than they ever were before. There’s a lot of upside, particularly in selling internationally through its recently-acquired RugbyPass subsidiary, but that potential remains speculative for now.

The All Blacks brand remains enormously impressive, yet it faces headwinds the likes of which it has never before known. The second generation of professionals like Dan Carter, Mils Muliaina and Richie McCaw are long gone, and the third generation, exemplified by Kieran Read and Aaron Smith, are on their way out too. With them go the emotional attachment to the team of successive generations of All Black fans, who grew up watching them play, often on their parents’ Sky subscriptions. It becomes easier to lapse away as those giants of the game retire.

At the same time, rugby’s gravity is drifting north. The private owners, huge population bases and relatively affluent fans of England and France are increasingly throwing larger cheques at our players. Rugby can feel squeezed in a pincer movement between its ageing rural audience in New Zealand, and the monied city game of the Northern Hemisphere. It will be increasingly difficult for All Blacks to resist the temptation to move north, watching the way fringe All Blacks like Nick Evans and Charles Piutau have built strong club careers and made huge sums by leaving early and performing well.

There are other factors less related to finances which also bedevil the game. The spectre of brain injury haunts rugby too, as Dylan Cleaver’s excellent reporting has revealed, thinning an already troubled player pipeline. Similarly, league and basketball have as strong a call on young athletic talent in Auckland in particular, a population which rugby once owned as of right. And alternative revenue streams haven’t been pursued with any passion. Women’s rugby has been largely neglected, despite an explosion in interest in women’s codes worldwide. Meanwhile provincial rugby and super rugby still get major TV and financial support, despite the business case for both being increasingly hard to make.

It adds up to a code at a turning point. A new coach, a new captain, a new CEO walking into a situation radically different from any their predecessors would have recognised. Word within rugby and business suggests Mark Robinson is a different kind of leader, and has the ability to deal to rugby’s challenges, with NZ Rugby chair Brent Impey praising his commercial instincts, innovation and mana.

To survive and thrive at the head of this organisation today, he’ll need all three, and more besides.

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