It may have been seen by some as sacrilegious, but insurance company AIG’s shirt sponsorship of the New Zealand Rugby (NZR) jersey has been cited as a crucial factor in the governing body announcing its first operating profit in five years.

The organisation has reported a NZ$3.2 million (US$2.7 million) profit for 2012, following an operating loss of NZ$3.1 million in 2011. NZR had initially planned for a break even budget for the year, a mark they have exceeded as a result of the somewhat controversial sponsorship agreement.

Only once before has the famous All Blacks jersey carried the name of a commercial partner, with beer brand Steinlager appearing on the right side of the jersey in the 1990’s, but never emblazoned across the front of the iconic kit. A five-and-a-half year deal announced in October 2012 by the New Zealand Rugby Union (NZRU) has provided vital revenue for the world’s strongest rugby nation, who had seen their profits disappear as a result of the financial backing provided to Provincial Unions and Investec Super Rugby franchises. NZRU Chief Executive Steve Tew welcomed the news and stressed the importance of the somewhat contentious commercial partnership:

“This is an extremely satisfying result and underlines our success in driving greater commercial revenue and containing our costs. We are now in a much stronger financial position. The new partnership with insurance company AIG has made a difference. Significantly, we have secured a major portion of our commercial revenues over the medium term through the relationships with principal partner Adidas, broadcast partner Sky and now AIG.”

Tew continued: “It's important to remember that in recent years we maintained an annual investment of around $19 million in funding to Provincial Unions and Investec Super Rugby franchises in order to safeguard the game during challenging times. The consequence of that was a reduction in reserves and successive operating losses. That was clearly not sustainable. Our improved position gives New Zealand Rugby a sound base to make decisions on future investment in the game. We will now take the time to review an appropriate level of reserves for an organisation of our size and risk profile.”

The AIG deal equates to one of the most lucrative sponsorship agreements in world rugby, second only to NZRU’s own agreement with sports brand Adidas.

 

Published in Sponsorship
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