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All Blacks look to international partners to turn sporting heritage into commercial returns

  • New Zealand Rugby chief executive Steve Tew has overseen a turnaround from NZ$15m losses to NZ$33m profit in ten years.
  • Team adopted a commercial strategy that separated domestic from global partners and aimed to grow All Blacks brand in unexploited territories.
  • Shirt sponsorship deal with AIG helped facilitate growth in US, while adidas has pushed All Blacks as “everyone’s second team”

New Zealand’s national rugby team, the All Blacks, have a well-deserved reputation for punching above their weight. Not just on the pitch – where a country of five million people has become the dominant force in international rugby, laying claim to being the “most successful team in sport” with an all-time win rate of 77 per cent – but off it, too. The All Blacks brand is comfortably the biggest in its sport, with a global awareness that transcends rugby’s traditional constraints.

Until relatively recently, however, this cachet had gone commercially under-exploited. In 2009, a combination of the global financial crisis and investment into hosting the 2011 Rugby World Cup led to New Zealand Rugby (NZRU) making record losses, announcing an operational deficit of NZ$9.6m (€5.4m/$6.4m) for that year, alongside debts associated with the World Cup of around NZ$6m. It was chief executive Steve Tew’s first full year in charge, and almost immediately he set about asserting a new commercial strategy for New Zealand Rugby. His goal was international growth, by diversifying away from NZRU’s traditional reliance on domestic partners.

Ten years on, the body’s roster of sponsors contains a number of premium global brands supplemented by regional partnerships with domestic firms. Tew says the growth of its global sponsorship portfolio is the greatest measurement of change in the organisation during his time in charge.

“We had – and still have – an awful lot of New Zealand-only relationships,” says Tew. Partners such as Weet-Bix, Air New Zealand, Lion and Ford are all well into a third decade of collaboration with NZRU. “Because of who we are, we have an awful lot of cut-through in this market, to the point where we believed we’d maximised the New Zealand market. That’s why we started looking for those international partnerships, and we’re fortunate enough that the All Blacks name seems to have some resonance all around the world.”

While there was a sense that brands would be attracted to the All Blacks’ standing as a global sporting institution, Tew warned his commercial team against relying too much on the resonance of the name.

“We never want to be a partner who can’t deliver on our promises,” he adds. “We’re very fortunate that we inherit a jersey that has some very unique attributes, but we know we can’t rely on that.

“Commercial relationships now are pretty sophisticated, and partners are more likely to make a hard-nosed commercial decisions based on the metrics they want to achieve rather than a feel-good factor or a professional relationship.”

Since Tew took over, major international partnerships have been inked with: asset management firm Investec; insurance giant AIG; Rolex-owned watch brand Tudor; and telco Vodafone – the first two of which are already into a second contract, having both renewed their initial terms. The 2017 annual financial results – the tenth to be released since Tew became chief executive; nine years on from New Zealand Rugby’s record losses – showed a profit of NZ$33.4m.

Steve Tew

Mutual benefit

The partnership with AIG, first inked in 2012, is an example of a working relationship that built on and developed the All Blacks’ brand.

“At that time, they were in the middle of recovering from pretty difficult period in the financial crisis,” says Tew in reference to the alliance. Under the stewardship of AIG’s president and chief executive, Bob Benmosche, the company was attempting to rehabilitate itself in the eyes of the global public, after being one of the principal players in the financial crash of 2008.

The deal was reportedly worth $13m per year over an initial four years. When England’s Rugby Football Union extended its shirt sponsorship deal with telco O2 that same year, also for a four-year term – a deal whose value was increased by England’s hosting of the Rugby World Cup in 2015 – it was worth an estimated $8m a year, $20m less overall than the AIG/All Blacks tie-up.

Rugby barely moves the needle in the US, yet here was one of America’s biggest insurance firms attempting to leverage the image of rugby’s most visible brand to bolster its own reputation internationally.

“We put together a package that we felt was good value for what they were trying to achieve, which included them being on our shirts,” says Tew. “Benmosche was very honest about what he was trying to do, and I felt that what we were asked to deliver for them was also very achievable. There are always risks whenever you take on something like this – we hadn’t had a jersey sponsor at all since 1998, for a number of reasons – but decided it was the best option for New Zealand Rugby at the time.”

In 2013, New Zealand Rugby posted its first profits in half a decade, something which was largely attributed to the boost from AIG’s sponsorship. In 2016, the company extended its deal for a further six years, “an obvious sign”, says Tew, “that we were doing something right”.

It has also helped the All Blacks gain a foothold in the American market. AIG very quickly got behind NZRU’s belief that the best way to grow the brand with new fans is to get the All Blacks in front of said fans.

Tew describes the two games the team has played at Soldier Field, the home of the NFL’s Chicago Bears, as “some of the highest profile things we’ve done in the past three or four years”.

Those games raised up to $1m a piece for NZRU, with the 2016 defeat to Ireland playing out in front of 62,000 fans, the largest crowd for a professional rugby match played on US soil. Neither of these games would have taken place without the involvement of AIG, which is also a partner of USA Rugby and title-sponsored both fixtures, providing funding and facilitating the talks between the two rights-holders.

Selling the brand

Among Tew’s earliest successes as chief executive was a mammoth ten-year renewal with adidas in 2009 which, at a value of almost $20m per year, remains by some distance the most lucrative sponsorship in rugby history. At the time, there was pressure on NZRU to return to domestic sportswear manufacturer Canterbury, which had supplied the All Blacks’ kits from 1924 to 1999 and was considered a core part of their identity. There was also two years still remaining on the German company’s existing, lower-value agreement, worth an estimated total of NZ$50m over ten years, a quarter of the total value of the 2009 contract.

Tew, however, had identified adidas as a “vital” partner for the All Blacks and set about securing a long-term deal. A significant part of the reasoning on both sides, he says, was adidas’ status as a global fashion brand as well as a sportswear manufacturer, which “gave us a view to that kind of lifestyle approach, allowing us to open up new merchandise and product lines”, says Tew. “We went to them with this ambition to do more with the All Blacks brand, and they were very responsive to that. They’re able to get our brand into more places around the world than probably any other company we could have worked with.” That vision convinced adidas to sign the renewed, long-term deal on improved terms.

This played into a wider strategy of “deliberately trying to pitch ourselves as the second-favourite rugby team of a supporter, no matter where you are in the world”. One of the major challenges of being a national team, he says, is that other major global sporting brands they might look to as peers – he name-checks Ferrari, the Los Angeles Lakers and Real Madrid – “are able to transcend international boundaries a lot easier than a national team”.

Millions of football fans across Asia might name Real Madrid as their favourite team and buy Real Madrid merchandise. But it is considerably harder to market All Blacks products to rugby fans from other nations, whose loyalties are with their respective home nations. The adidas partnership and the development of a wide range of All Blacks merchandise has helped to diversify how people perceive the team, giving them a new way to engage with fans around the world.

“We’re never going to be the number one team of a Japanese rugby fan,” he goes on. “But we’d like their second team to be the All Blacks. And we take a similar approach in every market. What we’ve achieved on the pitch over a period of time, that’s supplemented by the work we do with brands like adidas to create a connection and interest with fans of other teams, even of other sports.”

In practice, this has meant activations and campaigns which rely less on All Blacks players themselves and focus more on the heritage and aesthetics of the brand. As Tew puts it: “We’re lucky that black is a very good colour. The colour, the fern emblem, the All Blacks name – these are all iconic features of our brand that help us engage with, and hopefully sell to, new audiences.”

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