Sir Colin Meads says players need to be paid less to improve the health of provincial rugby.
The Otago Rugby Union is the latest to be bailed out by the New Zealand Rugby Union in the form of a loan, and a change manager has also been appointed.
After losses totalling $4 million in five years, the Otago union has signalled it will post another significant loss next month.
The NZRU says the majority of its 26 unions have posted losses and half a dozen have been given loans in recent years.
Sir Colin says provincial unions are paying players who are not internationals far too much and many players are demanding too many perks.
He says unions have to make tough decisions and live within their means.