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2 Pools of 7 for Air New Zealand Cup from 2011 onwards



The New Zealand Rugby Union (NZRU) and the New Zealand Rugby Players Association (NZRPA) have agreed settlement terms for a new Collective Employment Agreement for 2010 to 2012.

The proposed new agreement will feature an agreed domestic competition structure as well as a range of new and updated terms including an adjusted Player Payment Pool which introduces Franchise Contracting at Super Rugby and NZRU level and a reduced salary cap at Provincial level.

The existing Collective Agreement, which is due to expire at the end of this year, was initially agreed in 2005 and ran from 2006 to 2008 with a one-year extension agreed for 2009.

The terms of the new agreement were presented to the NZRU Board and Provincial Union and Franchise Chairmen and CEOs at a meeting in Auckland today. The agreement remains subject to detailed contract drafting and ratification by the NZRU Board, individual Provincial Unions and Franchises, and the NZRPA Board and professional players. This is likely to be concluded in the first quarter of 2010.

NZRU CEO Steve Tew said the conclusion of a new agreement before the end of the year was a significant milestone and also provides certainty with regard to the structure of domestic competitions.

"Among our key goals for this year were to provide certainty around our competitions both at the domestic level and within SANZAR and complete a new collective agreement.

"The settlement terms represent a significant step forward for professional rugby in this country and reflect the strength of the relationship we have with our professional players."

NZRPA CEO Rob Nichol said the players are rapt that they have been able to reach a provisional agreement on the key terms underpinning the Collective Agreement that each party can now present to their respective stakeholders.

"The events of the past several months and challenges faced by rugby during this time presented some very real and difficult issues that we had to deal with during this negotiation process. We are proud of the fact that we have dealt with those issues and pleased with the results we have all managed to produce for rugby, first and foremost, and for our members."

Mr Nichol said the issue of the future of domestic competitions has been difficult and widely debated in recent times.

"From our perspective all the parties have contributed, none more so than the NZRU themselves, to what will be an exciting and dynamic competition to play in and for fans to support. Every game will have significant tension and meaning, will be highly competitive and provide a fantastic platform for the players to demonstrate their ability and skills and push for higher honours. The players will love it."

Mr Nichol also acknowledged the significant amount of work that has gone into the major rugby competitions and future of the game over the past 24 months during what have been difficult and financially testing times for all.

"We now look forward to an exciting few years ahead."

Mr Tew also paid tribute to the attitude and approach of all parties involved in the negotiations. In addition to NZRU and NZRPA management, the negotiation teams included Greg Peters (Wellington Rugby Football Union and Hurricanes CEO), Hamish Riach (Canterbury Rugby Football Union and Crusaders CEO) and Mike Bishop (Hawke's Bay Rugby Football Union CEO). The NZRPA were supported throughout by player and team representatives from all New Zealand's professional rugby teams.

Key Settlement Terms

The key terms of the proposed new agreement include:

Competition Structures

A new competition structure involving the 14 Premier Provincial Unions will be introduced which will feature:

As previously announced, in 2010 a full 14 team round robin with semis and final (this is the same format as 2009).

The new competition format from 2011 will see 14 teams split into two divisions of seven teams based on their on-field finishing positions in 2010. The top seven teams will form the Premiership and the bottom seven the Championship. Teams will play all other teams in their division plus four other teams from the other division (there will be an innovative new process for teams to select their cross-division opponents with the detail to be finalised in the first quarter next year). All matches will carry full competition points. The winner of the Championship will receive automatic promotion to the Premiership replacing the 7th placed team in the Premiership which will be relegated to the Championship.

In 2011, due to New Zealand hosting RWC 2011, the competition window will be restricted to eight weeks. As a result, in 2011 only, there will be three mid-week matches and no semi-finals.

From 2012 the competition will commence two weeks after the conclusion of the new expanded Super Rugby in mid-August and be played over 12 weeks. This will see the introduction of semi-finals and no mid week matches.

Player Contracting and Salary Cap

The new domestic competition will be supported by a new Provincial Union player payment and contracting model. The Provincial Union Salary Cap will now no longer include notional values but discounts for All Blacks, veteran players and injuries will continue. The level of the new Salary Cap will be set at the lesser of:

$1.35m; or

36% of a Province's commercial revenue based on prior years.

This is a reduction on the current cap of $2.2 million (which included notional values).

The maximum a Province can pay an individual player will be capped at $60,000 with the exception of two marquee players who will be capped at $90,000. Any existing provincial union contractual payments in excess of $60,000 will be added to that players' New Zealand Rugby Contract and become payable out of the Player Payment Pool.

Revenue Sharing and Player Payment Pool

The revenue sharing model introduced in 2005 will continue with the Player Payment Pool to be used for player payments and initiatives agreed at 36 per cent of Player Generated Revenue. Player-generated revenue includes all NZRU broadcasting revenue, sponsorship and match-day revenue. Franchise Revenue above a total revenue level across the five New Zealand Franchises of $24 million per annum will also added to the PPP from 2011.

Franchise Contracting

The terms of settlement would also see the introduction of Franchise contracting from 2011 onwards with Rebel Sport Super 14 Franchises able to directly contract 28 players on New Zealand Rugby Contracts and draft up to four further players for a total squad of between 30 and 32 players. Franchises will be allocated a budget from within the Player Payment Pool with a maximum amount that a Franchise will be able to pay a player to be agreed. The existing Wider Training Group of a further eight players per Franchise will remain.

Next Steps

The settlement terms will now be drafted into a full Collective Agreement which will be presented to the respective stakeholders for final ratification. Further details of the agreement will be announced once those processes are concluded.

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For further information contact:

NZRU:
Brian Finn
NZRU Communications Manager
M: 027 229 5380
E: brian.finn@nzrugby.co.nz

NZRPA:
Rob Nichol
NZRPA CEO
M: 021 677 505
E: rob.nichol@nzrpa.co.nz


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