Rugby receives the biggest amount of pokie funding of any sport in New Zealand and despite a fresh cash injection from the Silver Lake deal, clubs are committed to protecting that lucrative revenue stream
New Zealand Rugby’s general manager for community rugby Steve Lancaster doesn’t oversell the fresh funding boost.
“Clubs will definitely benefit, but it’s not going to be transformational,” he said.
“We don't want to see that funding just deployed to operational expenditure, because once it's spent, it’s spent… and typically a lot of things that clubs are applying to gaming trusts for are more operational in nature so we don't really see a lot of overlap there.”
He’s talking about the $200 million deal with US private equity firm Silver Lake signed last week, of which provincial and community clubs will see a slice in the coming months.
Sixty million dollars will go into a legacy fund to protect the future of the game, and $37m will act as a short-term investment to try and halt declining player numbers.
Fourteen million will go to National Provincial Championship unions, $6m for Heartland unions, $2m for the Māori Rugby Board, while community clubs get $7.5m.
Last year, provincial, heartland and community clubs collected almost $17.2m from pokie grant funding alone. In 2019, rugby received $25.7m, almost double that of the next biggest sports beneficiary – football.
Netball and cricket paled in comparison, with $5.9m and $9.6m allocated in 2021 respectively.
Auckland Rugby’s 2021 financial statements show of its $8.8m in revenue, $2.16m of this was from class 4 gaming grants.
Waikato Rugby chief executive Carl Moon said there was no expectation Silver Lake would change anything.
"Community funders are critical supporters of grassroots sport and in our case, rugby, across the entire province.
“They have strict rules and protocols to follow in terms of what they can and can’t, or will or won’t, support. They also have very robust application, decision-making, accountability, and reporting processes in place.
“We don’t expect that any of this will change as a result of the impending Silver Lake transaction.”
Auckland Rugby’s report highlighted just how critical that revenue stream is when it was cut off abruptly during the 2020 lockdowns.
“Grants came to a halt, having a two-month impact on our revenue for 2021, which in turn affected the clubs. These revenue streams are vital for the community game, and it is hoped that once bars open again these funds will start to flow back into the community space,” the 2021 annual report said.
Totally reliant
Gordon Noble-Campbell, who chairs the Amateur Sport Association, said on average, an amateur club relied on grant funding for about a quarter of its income.
“Obviously, some will be more financially sound than others in terms of their operations, given their size, and reach into a community, the number of fee paying members, the sponsorships they can gain or the facilities they own, but for all clubs the question of where does the money come from is always a fundamental one.”
He said applying for grant funding tended to serve better-resourced clubs who had staff or volunteers who knew the system, and this was partly why rugby was so well-served by the funding.
“Most of these people will not necessarily have the knowledge, competence and skills to be able to undertake all of the financial obligations that might be required not only in terms of the operation of the entity, but also when it comes to preparing and being able to meet the requirements for grant funding application.”
Noble-Campbell said a step-change was needed when it came to funding community sport.
“There’s a scheme that's applied in Australia, whereby school-aged children are given vouchers with 100 bucks or more, which can be used for a child to pay their subscription to a sport club in their community.
“And that serves two benefits. One, it gets rid of the financial obstacle for families and secondly, it helps the club by knowing they will have the opportunity to be able to deliver sport through the funding that becomes available to them.”
Rugby’s reach
The link between rugby clubs, trusts and the pubs that host the gaming machines runs deep.
The North and South trust was set up primarily to support amateur rugby and sport in the Auckland region.
Mainland has strong links to Canterbury Rugby, as does Grassroots to Waikato Rugby.
David Hay chairs the lobby group Feed Families Not Pokies. He previously worked for Auckland Council leading its work on its class 4 gaming policy.
“It’s not what you know, it’s who,” he said.
"What really interests me is what are the behind-the-scenes relationships between the people that apply for grants and the people who dish them out? There's a whole lack of transparency there."
He said while it was perfectly legal for gaming trusts to support rugby, there needed to be greater transparency over how subsiding the community game was keeping the higher levels of the sport afloat.
"When I was working for Auckland Council we found that one rugby club, who shall not be named, was quite obviously cross subsidising its professional performance with the pokie funding, because they actually had it in the books.
"You can see their financial statements, and they showed quite clearly that the money they were getting for amateur sports was more than sufficient and actually they were using the pokie funding to subsidise professional rugby, which was a legal problem."
Ideally for Hay, the issue over who gets how much and from where would not be a problem as community groups and sports clubs would not have the option of pokie funding at all.
But unless a viable alternative is created, it's a much-needed cash injection year-on-year for sports groups of all stripes.
Steve Lancaster stressed while it was still early days, the money amateur clubs would get via the deal could be used to make themselves more sustainable.
“Some of our provincial unions are talking to the trusts that they have relationships with to see if there's a way to actually leverage the investment that will pass through to the clubs.
“But it won't take away the need for our sport or other sports to still be dependent on various sources of community and corporate funding.”
