From a sporting perspective, New Zealand is the ideal host for the pinnacle of world rugby union. The all-conquering All Blacks co-hosted and won the first ever Rugby World Cup (RWC) in 1987 and are the leading points scorers of all time. However, from a business standpoint, the IRB (International Rugby Board) stands to make a loss on all fronts.
When South Africa captain Jon Smit lifted the William Webb Ellis Cup at the Stade de France on October 20, 2007, the tournament was at the peak of two decades of what can only be described as astronomic growth. An economic survey by Deloitte in 2008 estimated RWC 2007 had a global cumulative TV audience of more than four billion viewers from 238 countries, with 2.3 million spectators paying at the gates.
Deloitte also identified 94 per cent stadium utilisation at the tournament, 350,000 international visitors and a 28 per cent hike in the number of registered rugby players following the event. All impressive data to add to claims that the RWC is only behind the FIFA World Cup and Olympic Games in terms of the globe’s biggest and most-followed sporting event.
But France 2007 left the IRB with a quandary: what would it do next to continue the success story and take the tournament to the next level?
“Taking this year’s tournament to New Zealand was not a business decision, it was a rugby decision,” Mike Miller, CEO of the IRB, told SportBusiness International. Miller joined the IRB in April 2002 having previously worked as head of sport at UK commercial broadcaster Channel 4 and controller of televised sport at public-service broadcaster the BBC.
“We knew we were giving it to a special country, a country where everybody has got an opinion on rugby. But it is only a country of four million people and we will be 30 per cent down on our usual surplus of profits as a result.
“We knew that at the time [of awarding the RWC to New Zealand in November 2005], and there has been a bit of belt-tightening as a result. But one of the advantages of awarding hosting rights to two World Cups at the same time is that we can ask sponsors and investors to sign up for seven or eight years and look further into the long-term.”
Some simple facts regarding this year’s RWC make miserable reading for sponsors and broadcasters alike. For starters, New Zealand’s population of four million is measly compared to the nigh-on 66 million of 2007 hosts France, and the early morning kick-off times in north-west Europe, rugby union’s key market, will certainly see the global audiences figures fall dramatically from 2007.
Then there is the issue of stadia. Total attendances had been rising steadily tournament-by-tournament: 1987 (600,000), 1991 (1,000,000), 1995 (1,100,000), 1999 (1,600,000), 2003 (1,890,000) and 2007 (2,250,000). But in New Zealand the host’s arenas are vastly smaller compared to four years ago, leading to a reduction in attendances and subsequent matchday profits with only 1,500,000 spectators expected to attend matches at this year’s tournament.
The stadia are also less equipped to sufficiently deal with the demands of commentary boxes and on-site media compounds compared to their French counterparts.
That’s not to mention the contribution of Mother Nature. The earthquakes in September last year and February this year that caused so much devastation in Christchurch saw the city cruelly stripped of its right to host two of the quarter-finals, adding chaos to the IRB’s preparations.
Christchurch was scheduled to host seven matches in total. At the time Miller moved quickly to reassure northern hemisphere rugby supporters who had already purchased packages to travel to the World Cup and stay in Christchurch that the event organiser’s would be “as flexible as is possible” and “make sure people have options in front of them so their rights will be fully protected.”
For the full insight see the latest edition of SportBusiness International published August 1.
