NZRU applies to Commission for authorisation

10 November 2005/058

NZRU applies to Commission for authorisation

The New Zealand Rugby Football Union Incorporated (NZRU) has applied to the Commerce Commission for authorisation to enter into a contract to which sections 27, 29 or 30 of the Commerce Act might apply. The relevant contract is the Collective Employment Agreement between the NZRU and Rugby Players Collective Incorporated, which was entered into on 1 November 2005.

It is proposed that the new Collective Employment Agreement will set a salary cap on the total annual player payments made by each of the 14 Air New Zealand Cup provincial unions. The level of the proposed cap will initially be set at $2 million for each provincial union for 2006, and would be adjusted by the CPI each year after that. A number of other measures are also being proposed.

The Commerce Act prohibits persons entering into agreements which have the purpose, effect or likely effect of reducing competition, or of controlling or fixing prices. However, the Commission may authorise agreements that lessen competition if the public benefit is greater than the detriment to competition.

The Commission intends to make a final determination by the end of March 2006. A public version of the application will shortly be available on the Commission's website under Public Registers.

ENDS

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