Sections

Services

Information

UK United Kingdom

Selling the Rugby World Cup

RUGBY WORLD CUP – As the All Blacks and the Wallabies prepare for Sunday’s semi-final showdown, Deakin University’s Adam Karg discusses how to make money from the competition. The Rugby World Cup has returned…

Marketing in the 2011 New Zealand Rugby World Cup will be different to previous years. Flickr/Sandy Austin

RUGBY WORLD CUP – As the All Blacks and the Wallabies prepare for Sunday’s semi-final showdown, Deakin University’s Adam Karg discusses how to make money from the competition.

The Rugby World Cup has returned to New Zealand for the first time since the nation co-hosted the debut tournament 24 years ago.

But New Zealand Rugby Union head, Steve Tew has already raised concerns about the financing behind the game and whether New Zealand can even afford to play in another World Cup.

If we judge from a purely commercial standpoint, it might rationally be expected that New Zealand may be hosting the world cup for the last time, despite the success of the sport in the region.

How big is the market?

The sport has changed a lot since New Zealand first hosted the World Cup in 1987 – it’s more professional, it has a global outlook and even an upcoming role in the Olympics.

All of this points towards an important and growing international advertising market, enhanced by strong national and club competitions across both hemispheres.

But there are still problems with the New Zealand market and what it can really acheive.

Four billion viewers from 238 countries and 2.3 million spectators watched the Rugby World Cup in France in 2007, entrenching it among the world’s leading single-sport international events.

Attendance numbers have grown in each rendition of the tournament since inception in 1987, at an average of 32% for each tournament.

But in 2011 in New Zealand, the tournament is being hosted in its smallest ever market, and a single country will host all tournament games for only the third time.

Marketing problems

Despite the development of the sport, the upcoming tournament faces the potential of generating a significant financial loss.

Even at capacity, spectator numbers at the 2011 Rugby World Cup games would fall 33% shy of 2007 attendances, meaning significant revenue shortfalls.

Additionally, broadcast times aren’t ideal for many key European markets, meaning lower projected viewer numbers and lower subsequent advertising and sponsorship on-flows.

Commercial streams such as sponsorship appear the most stable with international brands Emirates, DHL, MasterCard and Heineken among those involved.

Overall though, revenue shortfalls of up to 30% are expected for the organiser, the International Rugby Board.

Valuable consumers

Despite the commercial downside, the tournament provides other opportunities for success in a passionate and engaged rugby market.

The New Zealand bid talked of it being a worthy guardian of the event and argued a global rugby legacy could be enacted through its hosting.

From a sporting perspective, the decision aligns the event with highly engaged support, intimate venues and genuine passion for the sport across the host country.

The host market and nature of the sport also presents some interesting dimensions, particularly the positioning of the sport and its consumers.

Rugby union’s private school roots, the purity in holding off professionalisation until as late as 1995 and its relatively clean image present a mix which might make rugby fans theoretically more attractive to marketers.

In England, research has shown the rugby fan base is comprised of an elevated social class, while in Australia, Super Rugby is positioned as the premium choice in a mass entertainment market.

In both of these countries, though, rugby operates in a niche segment, where it is far from the most popular sport.

Additionally, large events such as the Rugby World Cup evoke broad popularity that seeks to move the sport beyond its core consumers, eroding some of these individualised factors.

The leading sport

In the case of New Zealand though, rugby is already the leading sport, a point of difference for many other countries participating in the 2011 event.

New Zealand is promoted as a “stadium of four million” with the country demonstrating a homogenous sport interest centred on rugby and its iconic national team, the All Blacks.

Therefore, the International Rugby Board has found a host country that is highly committed to the sport and one of the few countries where rugby would be considered the primary sport, a spiritual home even.

New Zealand fans make it all worthwhile. AAP/William West

New Zealand’s hosting, therefore, highlights a paradox in sport marketing between commercial and sporting outcomes.

While limitations exist commercially for the Rugby World Cup in 2011, by comparison to other markets, it is placed in a passionate rugby market where it can deliver a genuine legacy.

The unique aspects of hosting an event in a small country are clear in this case - combining a committed fan base with the development of new or improved stadiums, strong government partnerships and significant economic impact for the nation with over 95,000 visitors expected for the tournament.

Sporting legacy v commercial pressures

International sport federations are often faced with balancing commercial and legacy outcomes when growing their games and delivering events.

The FIFA World Cup’s journeys to Africa in 2010 and Brazil in 2014 represent such examples for soccer.

As rugby grows beyond its seventh world cup, it will look to such more central and larger markets.

England will host the 2015 tournament, where time zone problems for key markets and ticket capacity are lesser issues, while emergent International Rugby Board member Japan has hosting rights for 2019.

Success though in sport is not always measured commercially, and with positive pre-event indicators and potential sporting and legacy outcomes, the 2011 Rugby World Cup might justify the International Rugby Board’s decision in a sporting sense – even if it is for the last time.

This is the sixth part of our Rugby World Cup series. To read the other parts, follow these links:

- Part one: Rugby World Cup: All Blacks, New Zealand Maori and the politics of the pitch

- Part two: What will the Rugby World Cup be worth to New Zealand

- Part three: Art or science? Decision making in rugby

- Part four: Rugby World Cup: Are cheats prospering?

- Part five: Rugby World Cup: The Australian situation

- Part six: Selling the Rugby World Cup

- Part seven: Rugby World Cup injuries: That’s gotta hurt

- Part eight: Rugby World Cup a lottery amid refereeing chaos

- Part nine: All Blacks' proud tradition of the haka insulted in Rugby World Cup

Sign in to Favourite

Join the conversation

3 Comments sorted by

  1. Mat Hardy

    Lecturer in Middle East Studies at Deakin University

    Adam,

    You leave out one side of the coin in that the sheer distance to NZ is off-putting financially and time wise for all the Northern hemisphere fans. There is no way you can compare 2007 to 2011 for that reason alone. If you live in London you can't just pop off to a game in Christchurch for a weekend the same way you could if it was in Cardiff. Add in the usual price gouges for air fares, accom and tickets and travelling to NZ to see the 2011 RWC is just not on the cards.

    NZ is, as you point out, almost a unique rugby market in its single-mindedness. Australia is probably another unique rugby market for the opposite reason. Half the country wouldn't even know the RWC was on at the moment.

    report
    1. Adam Karg

      Lecturer in Sport Management at Deakin University

      In reply to Mat Hardy

      Hi Mat,

      Agree travel factors can be added as a limitation here relevant to a major segment of the northern hemisphere rugby following - particularly given the strong culture of tours and travel for rugby fans from such regions. Looking at the FIFA WC case, South Africa 2010 saw a drop in a similar sense to your view compared against Germany in 2006, particularly at a corporate ticketing level.

      Overall though, the visitor numbers and ticket sales for the tournament against expectations have been relatively good. Key point remains though; RWC2011 will stop a long run of successive growth in attendance and revenue from one tournament to the next since 1987, regardless of location (inc Australia in 2003). Admittedly, this might not be top of mind for the NZ public in a week’s time.

      report
    2. Mat Hardy

      Lecturer in Middle East Studies at Deakin University

      In reply to Adam Karg

      One of the debates I'm having with people at the moment is whether the seeming flood of penalty-derived points will be a negative factor in the game's marketing, particularly here. It's easy for the NRL to say "At least in our game you get to see some proper scoring."

      report