Central Contracting, how it works, issues etc.

  • Hi all, we were just chatting on a forum up here and the subject in the title of this thread came up.
    I have a rudimentary understanding of how things work in New Zealand but I thought I'd best check "the horse's mouth" so to speak.
    This is how I think it works for you guys, please correct/hurl abuse when and where appropriate.

    The professional level starts at ITM/Mitre Cup level and contracts are held centrally with the union paying the clubs and the clubs paying the players. At Super level the franchises are co-owned by the union and individual sponsors but players are still centrally contracted. Players at this level are paid both by the union and by the co-owners. All Blacks receive extra cash from the union.

    As I say, this is just how I perceive it to work from picking up bits here and there, I could be wrong on all counts.
    Please correct me where I'm wrong.

    There is obvious pressure from big money teams in Europe and, just what occurred to me this morning, a relatively small population won't bring in huge amounts of cash from tv subscriptions. Are there other issues with keeping players etc?

    I did a search on the site but couldn't find these topics in one place.


    oh one more thing - Cmon the Heilanders!

  • @talisker have a read of the collective agreement docs on here www.nzrpa.co.nz/info-centre
    They will provide some insight.

  • @crucial wow, thanks.

    I'll be taking questions on that in about a month 🙂

  • Basically, NZRU employs players under the collective employment agreement linked above, and then seconds them to Super and Provincial teams. Note that this makes the players employees, not contractors.

  • @talisker I don't believe many clubs under ITM level pay players.

  • At the "amateur" level of club rugby there are sometimes match payments, free board/rent, car supplied, etc by the rugby club. Most of the time guys play for the love of the game.

  • @Talisker We have to define the levels of rugby in NZ as well, as the terminology is important, mainly as we don't operate as clubs like you do up North (although Super Rugby Franchises are becoming more club like).

    The basic division is the Provincial Union. Representative teams of those are the teams that play National Provincial Championship (NPC) which is now called Mitre 10 Cup after Mitre 10 took over sponsorship from ITM.

    They're representative teams not actually clubs.

    Club rugby is (generally) amateur and played below provincial level within the provinces. Each province has it's own club competition (or multiple comps dependent on geography).

    Super Rugby teams are based on regions made up of multiple provinces. Back in the day they were closer to being representative of the regions they're based in but nowadays they contract players directly often outside of their regions.

    They were called Franchises. For whatever reason.

    Initially the Franchises "protected" a certain number of players from within their region having first dibs at them. Then NZR (NZRU in those days) made sure (or tried to) the top 125 players in the country were distributed to a Super team somewhere. Either their home franchise, or drafted to another.

    Fully professional rugby starts at Super level. They are paid by NZR. I think topped up by the Super Franchise potentially.

    These players are paid by NZR a proportion of their salary for national rep teams if selected (ABs, U20s, Maori, etc), a proportion for Super Rugby, and a proportion for Provincial.

    Provincial Rugby (NPC/ITMC/Mitre 10) is semi-pro. "Salaries" are generally paid by the Provincial Unions. Again they may top up a Super Rugby player's salary. Non Super players will have some sort of contract but will need to hold down a job (generally).

    (Very few ABs will play provincial rugby, unless they need game time, as it overlaps Rugby Champs and EOYT.)

    Please feel free to correct me if I muddled something but that is my understanding on a basic level.

  • @booboo sounds legit...

  • @taniwharugby said in Central Contracting, how it works, issues etc.:

    @talisker I don't believe many clubs under ITM level pay players.

    A lot of clubs like to claim they don’t pay players (or coaches), but they sure as hell do!

    Not all clubs do it, and out of the ones that do, not all players receive payments/accommodation etc, but most certainly the top few players at these clubs do.

  • There's often a risk where clubs pay to attract players. Your local players get squeezed out. Then the money runs out and you've lost your home frown guys and the imports.

    Saw that scenario destroy Kereone in the Waikato in the 90s. Didn't do Roskill (Auckland) much good in the 80s either.

  • @gunner include your club?...as yeah I have heard denials of payments and accusations of payments from most clubs in town.

    Although are payments restricted to cash or is free board and a side of beef when required considered payment as well?,

  • @taniwharugby yep we’ve provided accommodation/vehicles/meat/flights etc over the years when we’ve needed to fill a gap or two.

    If other premier clubs tell you they aren’t doing it to, they’re straight out lying to your face.

    I’ve heard some crazy big numbers on what some clubs round here have spent in the last few seasons.

  • @gunner ha yeah, I know when you guys were top of the table, other clubs said you were paying players.

    Seems it is often a few of the supporters willing to chuck in for flights, accomodation, food etc...

  • TL;DR: People form rugby clubs, and those clubs form the provincial unions/sub-unions, which in turn form the NZRU.

    The common legal structure for sports in NZ is that at least 15 people get together and form a sports club as an incorporated society under the Incorporated Societies Act 1908 (this is why nearly all sports entities have Inc. in their legal names).

    Once 15+ people have formed a sports club and registered it as an incorporated society, they commonly join other clubs to form regional entities as incorporated societies to organise and run competitions. In rugby, that is the provincial unions and sub-unions. Those regional entities then form a national body as an incorporated society e.g. NZRU for rugby. Because all the entities are incorporated societies, they can form and join more incorporated societies.

    Side note: an incorporated society is a legal person which means it has the same legal status as a company, but in return for not operating for pecuniary gain for the members, they have tax advantages (no income tax for amateur sports and the like, first $1000 is tax-free for others e.g. trade associations). Incorporated societies are often described as non-profit, but legally they can operate for a surplus, they just can't distribute it to members (this is what is meant by 'pecuniary gain of the members'). Incorporated societies are not just used for amateur sports clubs - Automobile Association and Southern Cross are two of NZ's most well-known commercial entities and both are incorporated societies. Incorporated societies are not required to be charities, although often they register as charities as well. The minimum membership is 15 people, which can be natural persons (humans) which count as 1, and/or legal persons (e.g. companies or other incorporated societies) which count as 3.

    The Societies Office is in charge of the legal side of it and is part of the Companies Office which is part of MBIE. The website is societies.govt.nz and includes a searchable register which has financial statements and constitutions for all incorporated societies in NZ.

  • Thanks for your replies, @booboo , I didn't realise the Mitre cup sides are provincial entities, thanks.

    The set up sounds similar to what we are moving to in Scotland though we operate on a much smaller scale. We have two full time pro teams, Edinburgh (yippee) and Glasgow (boo). Below that we are about to launch the Super Six, six semi-professional sides, whose main aim as far as I can see it is to catch the youngsters who have missed the academy system, which is again a fairly recent innovation. Nothing is set in stone yet but it's hoped the Super Six will compete in a cross border competition with similar Irish and Welsh sides.

    Below that strict amateurism is going to be enforced, we've had a stupid system where someone can come in and buy their way up through the national leagues, taking the best talent from neighbouring towns' clubs. The national league system is another mess, we currently have four of them below the full time pro teams, the lowest rung on that ladder includes fixtures such as Orkney v St Boswells. Orkney is a group of islands off the north east coast of Scotland in the North Sea, and St Boswells is down in the Borders. It's a nine hour drive plus ferry crossing each way, but at least Orkney is where they make Highland Park whisky, so it's worth the trip.

Log in to reply