New NZ Rugby board favours NPC salary cap cut as focus turns to costs
Sunday, 18 May 2025
Salary cap could be cut from $1.1m to around $850,000.
NZ Rugby could centralise all player payments.
NZ Rugby spent $126.5m on running its competitions last year.
The new New Zealand Rugby board has told the provincial unions it is in favour of a salary cap cut of more than 20% for the NPC as it runs an eye over the game’s significant costs.
The Sunday Star-Times understands the new board, chaired by Rugby World Cup-winning All Blacks captain David Kirk, supports a reduction in the salary cap from $1.1 million to around $850,000.
The cut would need the support of the provincial unions and the New Zealand Rugby Players’ Association (NZRPA), and a model in which NZ Rugby centralises all NPC player payments and contracts is also under consideration.
If adopted it would save millions of dollars in NPC player payments over the long term and create a more even playing field, as some provincial unions haven’t been able, or willing, to spend up to the current cap for years.
It could also free up the provincial unions to spend a greater proportion of their funding at the community level, where the returns are far greater in terms of participation and supporter engagement.
The salary cap cut recommendation is a result of the Men’s Pathways and Competitions project commissioned by NZ Rugby, although it is unlikely to have unanimous support among the 14 NPC provincial unions.
While the unions who currently don’t spend up to the cap are likely to support it, those with strong sponsorship portfolios and high-performance ambitions might need some persuading.
A move to a regional-based NPC competition might also be on the table at some stage, although that will be linked to the next broadcast agreement and how much Sky or another broadcaster is prepared to pay for the NPC and FPC.
The cost of running the NPC was highlighted by the NZ Rugby Governance Review in 2023, which estimated that the overheads for each game were about $400,000.
NZ Rugby’s position on the salary cap follows the release of its accounts for 2024, which revealed a $19.5 million loss amid record income levels - highlighting the huge overheads required to run the sport at all levels.
NZ Rugby spent $126.5m on competitions in 2024, as well as $83.7m on “teams in black”.
While it has been well documented provincial unions and the NZRPA receive a fixed percentage of NZ Rugby, the national body also spends many extra millions on the travel and operating costs needed to facilitate the Heartland competition, the NPC and FPC, Super Rugby Pacific, Super Rugby Aupiki, its Sevens programs, the Rugby Championship and the Black Ferns’ commitments.
NZ Rugby chair Kirk indicated after the recent AGM in Wellington that the organisation would put equal weighting on revenue growth and cutting costs.
“Whether you're a corner dairy or a big corporation…you have to drive growth in your income lines and you have to manage your costs to deliver a profit at the end of each year, and over time build some resilience by building up some reserves,” Kirk said.
“It's a formula that is very clear, and so the next level of inquiry is what will it take to drive revenue growth and what sort of cost management needs to be put in place.”
The “teams in black” spending of $83.7m includes not only the NZ Rugby retainers for All Blacks players, but assembly fees and associated costs for the All Blacks XV side.
Spending on women’s rugby at Super Rugby Aupiki and Black Ferns level has also increased, while NZ Rugby supports Rugby Australia, Moana Pasifika and the Fijian Drua to the tune of millions of dollars each year in Super Rugby Pacific.
Administration costs have also risen to be about $27m a year.
While all of these costs can be justified individually they come with a price tag, and suggest that is “cost management” is needed throughout the whole game, not just at NPC level.