Thu, Sep 17, 2015 - Page 19 News List

Record revenues tipped as rugby seeks expansion

AFP, LONDON

The Webb Ellis Trophy is displayed in front of the London Eye on Tuesday. The winner of the World Cup, which is to begin tomorrow, will hold the trophy for four years.

Photo: AFP

The Rugby World Cup has become a huge business machine generating record revenues this year and aiming for even more.

World Rugby is targeting commercial revenue of £240 million (US$370 million) for the tournament starting tomorrow at Twickenham in London, 60 percent more than in 2011, according to chief executive Brett Gosper.

He predicted a surplus of about £150 million.

Some business experts say the World Cup generates US$1 billion for the global body, broadcasters, kit makers and sponsors.

On top of the World Cup’s revenues, the 20 competing countries, are bringing £125 million in sponsorship deals alone, according to the Repucom sports marketing data firm.

The World Cup is “a massive commercial platform,” Repucom chief executive Paul Smith told reporters. “It is a billion-dollar enterprise drawing investment on many levels.”

Television accounts for about two-thirds of World Rugby’s revenues, Gosper said. It is also leading rugby’s attempts to conquer new markets.

The World Cup is to be broadcast in 203 countries and territories. Germany is to show 24 matches live, while China has 22, Gosper said.

“We want maximum exposure, particular[ly] in markets like India, China, Brazil and the United States,” he added.

The World Cup was first held in 1987 in New Zealand and Australia, but only became “truly global” in 2003 when it returned to Australia and was won by England, Smith said.

“It has been a slow building exercise,” Smith said, adding that it has major potential for growth.

Rugby fans are traditionally wealthier than their soccer counterparts. The sport also has longstanding sponsors in finance, like French bank Societe Generale and US insurance giant AIG, who are linked with in New Zealand.

“It reaches so many corners of the world, and of course as an Olympic sport now through sevens, it amplifies the whole importance of the game,” Smith said.

“Lots of investment is going to come into rugby now in countries that haven’t previously been fully participating in the game,” he added.

World Rugby is hoping that the sport’s Olympic rebirth in Rio de Janeiro next year will further boost finances and encourage new male and female players.

“Rugby has got to pursue those major corridors for development. The United States is key for that,” Smith said. “It is a major population market. It’s a very lucrative commercial market and of course it is a very lucrative broadcast market.”

The proof of rugby’s golden future might be that the US considered bidding for the 2023 World Cup, for which expressions of interest had to be entered by July. There is no shortage of countries willing to spend big to host the event, even though Rugby World had problems when 2019 hosts Japan decided not to build a US$2.1 billion stadium.

The US decision to stay on the sidelines left Ireland, France, Italy and South Africa in contention for 2023.

Victory in the final on Oct. 31 will certainly bring new riches to whoever holds aloft the trophy.

The All Blacks are favorites and back-to-back wins would increase their value as an international icon.

“Globally, they [the All Blacks] are acknowledged as one of the great sporting brands,” Smith said. “I wouldn’t even describe them as a franchise. It is a ‘money can’t buy’ sort of deal.”

New Zealand’s relatively small population and time zone means games there do not draw the revenue they could in a bigger country in a more populated region, experts say.

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