The cost of next year’s Rugby World Cup, less revenue from test matches and a run of All Black injuries are being blamed by the New Zealand Rugby Union for the biggest financial loss in its history.

The $15.9 million loss, revealed in the organisation’s annual report released today, includes an operating deficit of $9.5 million and another $6.3 million in losses related to next year’s world cup.

Both home and away tests failed to meet the group’s revenue targets and an “unusually high” number of injuries to All Blacks and other players saw medical bills go well over budget.

Nine players were not considered for the Tri Nations series last year because of injury, while six were out for the end of year tour to the northern hemisphere.

The NZRU’s provision for medical costs rose by $817,000 to $2.52 million in 2009, after a movement of $461,000 in 2008.

The organisation recorded a modest $366,000 profit in 2008 and chief executive Steve Tew said 2009’s loss was “not one that the organisation can afford to repeat.”

The $6.3 million loss related to the world cup included an expected $2.1 million loss from NZRU’s one-third share of losses incurred by Rugby New Zealand 2011 Ltd, but mainly consisted of unrealised foreign exchange losses on cash reserves held in pounds that was needed to meet the NZRU’s commitments to the IRB.

It is required to pay the IRB £55.6 million and while its cash reserves held in pounds must be re-valued at the balance date, any financial gain on the hedging of the foreign exchange risk can not be recognised until the underlying transactions occur.

The strengthening NZ dollar resulted in the $4.2 million forex loss, but this is expected to be offset by gains next year if the exchange rate remains at its current level.

The NZRU still has cash reserves of $46.8 million, but in the annual report, Mr Tew warned that the business model that has underpinned rugby in the professional era had proved to be “unsustainable” in recent years.

“In 2008 rugby, as a whole, was spending $10 million a year more than it was earning and in 2009 taking the steps to change this received greater attention.”

While it secured new sponsorship agreements with companies such as Investec, Telecom and BNZ, revenue still fell short of targets, something the NZRU blamed largely on the global recession’s impact on domestic and offshore match revenues.

Cutting activity and programmes saw the organisation save $2.6 million and the NZRU has warned of further cost-cutting over 2010.

Revenue from the broadcasting rights will improve in 2011, with SANZAR confirming today that it has negotiated a 35% increase in the rights for professional games for 2011-2015, with the new deal valued at $US437 million ($NZ615 million), up from $323 million for the past five years.

During 2009, the All Blacks won 10 out of 14 tests and while the 71.4% win record would be the envy of many professional teams, the performance was described as “disappointing” under the team’s own standards, with a 84.4% win rate for the current coaching regime.