Former Wellington rugby chair Rhys Barlow says union 'technically insolvent' and must sell Hurricanes shares
Saturday, 5 April 2025
The WRFU has reported back-to-back $1m-plus annual losses.
Fears that staff will have to be cut on top of Hurricanes share sale.
$1m Silver Lake injection was spent covering a previous deficit.
A former chair of the Wellington Rugby Football Union (WRFU) has warned that the troubled union is “technically insolvent” after years of overspending and needs to sell its Hurricanes shareholding and slash overheads simply to keep going.
Rhys Barlow, who chaired the WRFU between 1999-2003, attended the union’s AGM last week when the $1.18 million loss for 2024 was presented and offered a dire assessment of the WRFU’s predicament.
“They've got an overhead structure of $6 million which has remained constant for the last three years,” Barlow told The Post on Thursday.
“It was $6.3m in 2022, it was $5.85m in 2023 and it was just over $6m in 2024.
“So there's been no real direction to trim overheads and that is the issue, knowing that they've had a falling revenue base.
“The reason I said they were technically insolvent was because current liabilities exceed current assets by nearly $650,000.
“If all liabilities were called in tomorrow they just simply wouldn't have the cash or debtors to cover their liabilities.
“The only way that Wellington's going to get out of this mess is by selling off their [50%] share of the Hurricanes investment.”
Barlow said it was difficult to put a value on that Hurricanes share, given the fickle nature of the market, but said the WRFU needed to raise $1.2m-$1.5m to simply get back into the black.
The crisis had been brewing for years, Barlow said, and Wellington had only avoided another $1m loss in 2022 because it used the $1m investment from Silver Lake to cover that deficit.
“It hasn't been managed well at all over the last four years,” Barlow said.
Barlow, a chartered accountant by profession, had some sympathy for the WRFU in the sense that during Super Rugby’s heyday the Hurricanes could return a profit of anywhere between $6m-$8m, which was then distributed among the contributing provincial unions.
But he said the WRFU needed to accept those days “were over” and cut their cloth accordingly, and their failure to do in recent years could now lead to job losses.
Even after the sale of the Hurricanes shares, Barlow said they still needed to cut more than $1m from their overheads to get back into financial shape.
“It’s very hard in today's climate,” he said.
“And to be honest, if they're going to achieve that they're going have to cut people - that's the reality of it.
'Some of these overhead costs are fixed, particularly when you're running a high-performance organisation.
“Some of the [player] contracts are hard and fast. They’ve got to honour those.
“So as I see it [the budget reduction] is cutting of people, which is sad.”
Wellington took out an overdraft of almost $300,000 last year to keep the organisation going, and has a new chair - Phil Holden - in place as it tries to repair the books.
It is likely that New Zealand Rugby would step in with a loan if Wellington’s participation in the NPC was in jeopardy, although the fact that the WRFU had to go for an overdraft suggests that NZ Rugby first and foremost wants the provincial unions to stand on their own two feet.
While NZ Rugby funding for the provincial unions dipped in 2024, there was a significant increase negotiated by the unions in 2022 in exchange for support of the Silver Lake proposal.
In 2023, NZ Rugby funding for the 26 provincial unions leapt to $43.5m, an $11.5m increase from 2021 - on top of the one-off $1m Silver Lake injection for the 14 NPC unions and $500,000 each for the Heartland unions.
Barlow also believed the WRFU should return to Rugby League Park from the expensive NZCIS facility in Upper Hutt, while it could also save money by playing out of Jerry Collins Stadium at Porirua Park, instead of holding games at Sky Stadium.