Rugby Southland: The lengthy and tough financial recovery

"We operated on a shoestring the first year I was here, just to save some money and gain some financial capability."

Rugby Southland’s decade-plus financial recovery has reached the point where the organisation feels it’s now back to “square-one”.

Rugby Southland’s historic financial troubles have been well documented.

In 2011 the organisation was provided a $1.5 million rescue package which was made up of a $500,000 loan from New Zealand Rugby, with the Invercargill Licensing Trust and Community Trust both contributing $500,000.

Ever since respective Rugby Southland officials have worked towards putting the organisation in a much safer financial position and ensuring there is no repeat of the past.

At its most recent AGM, it was confirmed Rugby Soutland had made another surplus and was able to bank $70,000.

With the $1 million added in from the Silverlake deal, Rugby Southland now has $1.4m in cash reserves.

“It’s a massive turnaround,” Rugby Southland general manager Steve Mitchell says.

Mitchell says that $1.4m reserves mark is where they needed to be to ensure they were not vulnerable to any unexpected costs that might occur in the future.

$1.46m equates to about 40% of Rugby Southland’s annual operational costs.

Mitchell joined the organisation in 2020 and discovered Southland was still battling financially at that point.

“We are gaining quite a solid footing [now], which is what needed to happen. We had to shake the whole thing up. We operated on a shoestring the first year I was here, just to save some money and gain some financial capability.

“Then of course we had two years of Covid which made it challenging.”

The latest $70k surplus - with the Silverlake money not factored in - came despite Rugby Southland increasing its community staffing resource last year.

When Mitchell started, Rugby Southland employed 1.5 rugby development officers but that had now increased to five.

Through cost savings in some areas, as well as an increase in commercial revenue, the organisation has been able to string together surpluses, Mitchell says.

Rugby Southland’s sponsorship income and crowd revenue have both increased.

It comes at a time when some other provincial unions have been posting significant losses.

Included is Wellington - who holds the Ranfurly Shield and won the NPC in 2022 - recording a reported $691,255 loss.

Mitchell believes the increased crowd numbers and sponsorship revenue stemmed from Rugby Southland’s quest to adopt an approach of developing local talent.

“Our crowd support and the passion of our fans is the envy of a lot of [provincial unions].”

Mitchell says a few years back they were only getting about 1500 to a game but last season the average crowd numbers was up around the 4000 mark.

“People are coming back to watch the local players play.”

Part of the fiscal responsibility has meant Southland remains one of the lower-spending unions in terms of its NPC player contracting. That provides some challenges, in terms of getting results on the field.

Mitchell believes the disparity amongst teams around player spending was one of the big problems.

“The primary role of a provincial union is community rugby, to keep your community rugby alive and have a clear and achievable development pathway.

“So, with that ‘buy a team philosophy’, sure you are chasing titles, but you are also incurring huge debt and distancing your own community.”

On top of the financial stability, Rugby Southland has been able to increase participation numbers by nine percent in 2020-2021 and a further two percent in 2021-2022.

That has bucked the national trend where numbers had declined, Mitchell says.

The biggest growth area for Southland had been in the female game.

Mitchell believes the key aspect to it all was having the right people in the right roles.

He paid tribute to the work the Rugby Southland staff had done, as well as the work of the likes of board chair Murray Brown and the union’s president Leicester Rutledge.