Crusaders keep it 'in-house'

The Crusaders have effectively retained ownership of their Super Rugby franchise. This follows the announcement that the franchise will be run by a South Island provincial union-based group from next year.

The New Zealand Rugby Union announced Monday that the licence has been awarded to the Crusaders Limited Partnership, which is owned by all six Crusaders unions – Canterbury, Tasman, South Canterbury, Mid Canterbury, Buller and West Coast.

Each of the provincial unions will make a capital contribution to the Crusaders Limited Partnership (totalling NZ$200,000) as well as a loan contribution (totalling NZ$300,000), meaning CLP begins its operation with NZ$500,000 in funds.

Christchurch based-businessman and keen Crusaders supporter Brent Francis is providing a guarantee to satisfy the NZRU that CLP should be able to meet its financial commitments during the term of the licence.

He will be one of six directors on the new Crusaders (GP) Ltd board, which will be a partner of CLP along with the six unions.

The other directors will be two nominated by the Canterbury Rugby Football Union, one nominated by the other five unions and two independents.

"I am thrilled to be involved in the new Crusaders limited partnership," said Francis.

"As a Crusaders fan, I am happy to be able to help ensure the future viability of this great rugby organisation.

The licence applies from January 1 next year and will expire on August 31 2020, New Zealand Rugby Union chief executive Steve Tew said.

"We are pleased to confirm details around the Crusaders licence, which will ensure that the Crusaders begin next year better equipped to face the challenges of the highly competitive market that rugby operates in," said NZRU Chief Executive Steve Tew.

"We set out on this process to deliver a more sustainable commercial model for Super Rugby franchises so they can better look after the interests of teams, fans, sponsors and rugby and we are thrilled the Crusaders now join the Hurricanes in that regard."

A licence to manage the Hurricanes was earlier awarded to a Wellington group comprising the Wellington Rugby Football Union and local investors.

"We believe that the new Crusaders Limited Partnership is a really positive step forward for the Crusaders," said current Crusaders Chairman Murray Ellis.

"It puts us on a sound financial footing and provides certainty and stability for the future.

"We are particularly proud that the licence agreement for the Crusaders will see rugby continuing to 'own' rugby.  We believe that  in our case, the future of the Crusaders is best served by the involvement of all the regional provincial unions, and that is what we've managed to achieve.

"We are confident the injection of new capital, stronger governance and fresh thinking will improve the performance of both the Crusaders and the Hurricanes and that will be good for rugby," said Tew.

"We remain confident of a bid being submitted for the Blues to allow a licence to be issued in 2014 and are also hopeful of a bid for the Chiefs."

Crusaders chairman Murray Ellis says the new partnership is a positive step forward.

"It puts us on a sound financial footing and provides certainty and stability for the future. We are particularly proud that the licence agreement for the Crusaders will see rugby continuing to 'own' rugby," he said.

The Canterbury Rugby Football Union expressed its excitement excited about the announcement.

CRFU Chairman Stewart Mitchell said this licence agreement is the best possible outcome for all of the provincial unions involved and for the future of the Crusaders.

"This will give the provincial unions involved real input in the future of the Crusaders," Mitchell said.

"Each of the provincial unions that make up the Crusaders region has committed to the new structure, so we are all in this together.

"The provincial unions, as the custodians of rugby in this area, were keen to see that we all remained involved in the management of the Crusaders.  We are obviously all huge supporters of the Crusaders and we believe that it is in the best interests of this great rugby organisation that decisions around its future continue to be made by the rugby unions that have always been at the heart of it.  

"This licence means that fans from throughout the Crusaders catchment area can be satisfied that all of the unions will continue to have a genuine stake in the Crusaders,” Mitchell added.

Key elements of agreement with Crusaders Limited Partnership (CLP):

The licence applies from 1 January 2013 and will expire on 31 August 2020.

The CLP will have one general partner – an incorporated company called Crusaders (GP) Limited – and six limited partners, being the six provincial unions.

The Board of Crusaders (GP) Ltd consists of six directors – two will be nominated by the CRFU, one nominated by the other five unions, two independents and private investor Brent Francis.

All directors will be appointed by an appointments committee made up of one CRFU representative, one NZRU representative and one independent.

The Chief Executive will be appointed by the board.

Each union will make a capital contribution (totalling NZ$200,000) as well as a loan contribution (totalling NZ$300,000), meaning that CLP will begin its operation with NZ$500,000 in funds.

The approximate contributions of the six provincial unions to the capital and loan payments are :

Canterbury 60 per cent

Tasman 18 per cent

South Canterbury 11 per cent

Mid Canterbury 5 per cent

Buller 3 per cent

West Coast 3 per cent

Background on Super Rugby Franchise Licences

The five Super Rugby franchises are owned by the NZRU and are currently run by boards representing the provincial unions that make up each Super Rugby catchment. Reviews into the financial sustainability and structure of Super Rugby and franchises identified the need to reinvigorate the franchise model and provide for additional investment to improve its financial sustainability.

Expressions of interest were called for in December 2011 for four of the five licences. The Highlanders were not part of the process.

A Super Rugby Licensee's responsibilities will include:

management of the team both on-field and off-field including, the professional development for members of the squad

marketing promotion of matches and the team

the Licensee will retain predominantly gate and some sponsorship income and pay administration, additional coaching and management staff, training facilities, match operations, and marketing costs.

The NZRU will:

retain ownership of the brands associated with each team

continue to fund player and coach contracts from centralised broadcasting and sponsorship revenue.

continue to pay all travel and accommodation costs associated with the regular season (excluding playoffs) through SANZAR