New Zealand looking for a handout from IRB

theKramer

New Zealand's projected loss for the World Cup will rise substantially, perhaps to as high as €30m, a leading sports entrepreneur has warned.

Even at this stage, 16 months before the tournament begins, NZRWC 2011 officials have publicly admitted to a loss of €22m. But the reality could be much worse, leaving New Zealand with a huge financial deficit which will take the government years to pay off.

NZ government officials accepted long ago they would be making up the losses, then estimated to be €17m. But if the words of Michael Watt, who has considerable experience of sports business and entertainment, prove correct, the loss figure is set to soar.

"The New Zealanders admit already the loss will be about €22m. But in my experience, everyone should expect that figure to rise substantially," Watt said. "It always does for these big events. This is nothing to do with individual culpability.

"In Martin Snedden, the CEO of the Rugby World Cup, they have a very efficient business figure but he has to err on the side of caution.

"The loss has the potential to rise by another €8m to €30m. No event of this magnitude has ever held to its figures: they always go up. In addition, the world of major events in entertainment and sport is going through tremendous metamorphosis."

This point has been borne out by the news this week that FIFA have approved an extra €79m hand-out to South Africa to meet their financial shortfalls and ensure the hosts were ready and able to stage next month's soccer World Cup.

And Watt has called for the IRB to adopt financial assistance to New Zealand, ahead of next year's tournament.

"If FIFA are prepared to help out South Africa for the soccer World Cup, I can't see any reason why the IRB and RWC Ltd should not assist New Zealand in a similar way," he claimed. "In my view, any shortfalls should be shored up. New Zealand should be requesting the IRB to help out because this is a serious financial shortfall with profound consequences for this small country if they are not assisted.

"This would be a sensible solution to a difficulty that could otherwise seriously embarrass New Zealand's economy in the years to come."

Watt is a New Zealander and was awarded the Order of New Zealand (ONZ), the highest of the country's civic honours, for services to Kiwi sport and international philanthropy.

For many years, his company, CSI, handled the TV rights for most rugby unions around the world, packaging them for international TV companies in a series of deals which made millions.

More recently, he has been involved in backing for a series of West End and Broadway stage hits, including 'Jersey Boys' and 'Sweet Charity'. He remains involved in the organising of several arena events.

Watt warned that the long-term cost to New Zealanders for staging next year's World Cup could be huge.

"The country will pay for this for a considerable number of years to come," he said. "They will struggle to meet these commitments, just as Montreal spent around a quarter of a century trying to pay off the debts it incurred for hosting the Olympic Games. London will probably be the same.

"One questions overall the national advantages of these events in the 21st century.

"It was only national ego that propelled New Zealand to go for this event. In my view, they should never have gone for it. It won't do that much for the country in the short-term because of the major world recession."

Another danger to New Zealand's World Cup is that if, as could well be the case, the world recession deepens in the next 12 months, the number of overseas visitors financially able to make the long journey across the world could shrink alarmingly.

That is a scenario which has already become obvious for the soccer World Cup and it would represent a further erosion of potential profits for RWC 2011, hoisting still further the overall loss figure.

- Peter Bills

I think its a bit rich them looking for a handout, considering they wheeled and dealed their way to getting a World Cup :rolleyes:

danthefan

What a misleading topic title. Nobody from the NZRU has asked for a handout. It's all very clear from the article.

JustinDee

Its also old news.
They have mentioned this 'subtly' in the press three times now. None of these projections have included neither TV rights nor non-tournament endorsements, by the way.

PhatPiggins

theKramer wrote: »

I think its a bit rich them looking for a handout, considering they wheeled and dealed their way to getting a World Cup :rolleyes:

I believe they have cash reserves of NZ$59.5 million so they should manage ok.

peterako

NZ$59 million is approx €33 million.....

There goes the reserve....

(should have been Japan in the first place anyway....)

sock puppet

peterako wrote: »

NZ$59 million is approx €33 million.....

There goes the reserve....

(should have been Japan in the first place anyway....)

The article isn't about the NZRU as danthefan pointed out.