Kiwi Super Rugby side in financial strife
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NEWS: The Hurricanes are seeking a NZ$1 million cash injection boost from shareholders with sign-off expected by the end of the week, according to Radio New Zealand.
With a decline in bums on seats and years of not hosting a Super Rugby Final, the New Zealand capital city side is searching for new ways to balance the books.
The Hurricanes have been in discussions with their four various stakeholders - Wellington Rugby Union, Y11 Media and Sports Group, private owner Richard Mansell and the Horowhenua Rugby Football Union since December 2024 in order to find a solution to years of revenue decline.
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The Hurricanes lost NZ$700,000 in 2024 and had a NZ$1.4 million deficit in 2023.
Hurricanes chairman Iain Potter said financial issues had not always been as grim as it is now.
"[Since 2012, the franchise] produced a surplus for sort of six or seven years, got close to even for a couple of years.
"The last two or three years have seen several deficits that have put our cash reserves under a bit of pressure.
"So, consequently, we have gone to the shareholders asking them for an injection of capital to give us a comfortable cash reserve so that we can trade and plan our way forward over the next two or three years.
"Everyone's been on board with the need for it, see the benefit of it and everyone, all shareholders except for Wellington Rugby Union, have confirmed their intention to participate."
The Wellington Rugby Union are the majority shareholder with a 50 percent stake.
Potter said the union's financial problems might prevent them from taking part in the capital rise.
The Hurricanes' financial situation isn't unique to the Wellington-based Super Rugby outfit Potter said.
"We're all suffering similarly if you are good enough and lucky enough in what is a very competitive competition nowadays to host a Final, you would probably generate a surplus.
"If you make a quarterfinal and host that at home, it would help you lessen your deficit, but you'd probably still be in deficit that's the reality.
"It's very difficult for any of the Super franchises to break even through the round-robin part of the season, so you're left hoping that you're going to host a Final basically.
"That's pretty much what your financial success, or otherwise, is dependent on in the current environment."
Poor attendance during the round-robin phase could not be offset by the commercial partnerships that Potter said has been growing.
"People aren't as in love with Super Rugby as they used to be and so the gate takings are significantly lower than they were five years ago.
"In the ideal world, we'd be having crowds of 15,000 to 25,000 people come and watch our games.
"But the reality is we're getting crowds of more like 9000 to 15,000 come watch our games and that's the principal reason for the trading difficulties that we've experienced over the last few years."
On-field results have a knock-on effect on the balance sheets, and the Hurricanes had not been in a Final since they won the competition in 2016.
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"You can't rely on being in the Final because only one team is hosting a Final, so we need to diversify.
"We've traditionally been reliant on two sources of revenue, commercial - which includes sponsorship and commercial partnerships - and gate revenue.
"What we need are other sources of revenue which could include things like pre-season games offshore, which some of the other franchises have experimented with, and somehow exploiting the intellectual property which we have in terms of high performance overseas."
New Zealand Rugby picked up the players' wages, but Potter said that the franchises were still responsible for coaching, medical and training staff, as well as the physios, analysts and facilities.
They're also responsible for paying the finance, marketing and commercial staff.
With squad sizes expanding through the years and the Hurricanes Poua joining Super Rugby Aupiki, the franchises' expenses increased.
Potter foresees that if the initiatives they had identified work, they will "start bearing fruit" over the next three years.
"We should be in a more comfortable position in 2026, but in a better position looking at surpluses from 2027 onwards."
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With additional reporting by Radio New Zealand
