Rugby

Sunday 13 July 2014

Money makes World Cup go round

Published 21/08/2012|05:00

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Croke Park’s decision to open up their leading GAA stadiums to the oval ball game has given the IRFU a platform to make a bid for the Rugby World Cup.

Three decades after vehemently objecting to the very concept of a World Cup competition, Ireland is eager to show the world we can host the whole shebang alone.

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The IRFU now make no secret of their desire to bask in the reflected glory of hosting a World Cup -- with or without their neighbours.

As far back as 2006, shortly after the GAA's historic decision to open Croke Park's doors in a show of ecumenical solidarity given their sporting neighbours' temporary homelessness, IRFU blazers were pensively swilling their G&Ts and contemplating a 2015 knees-up, alone or with their Celtic cousins.

Such a prospect subsequently floundered for a variety of reasons: principally, the IRFU's self-confessed reticence due to the global financial contagion and England's stubbornness, not to mention the thinly concealed reluctance of the International Rugby Board (IRB) to commit to another scaled-down event so soon after New Zealand in 2011.

Hence, England and Japan will host in 2015 and 2019; the former to ensure the IRB a guaranteed financial windfall, the latter to hopefully secure the same and also a genuine attempt to broaden the sport's still sadly restricted reach.

Despite the apparent attractiveness of an Irish bid, other countries like Russia and the USA would seem to fit into the IRB's increasingly aggrandising attempts to globalise their sport.

Nevertheless, despite the immediate obstacles in the path of a putative IRFU bid to go it alone when the bids are due to be submitted by next February, it would seem churlish for them to ignore such a mouth-watering opportunity.

Instead of asking why, at least the often ultra-conservative IRFU are finally asking why not?

IT'S THE ECONOMY, STUPID

Two years ago, Ireland was still in the running to jointly host the 2015 RWC with the other home unions.

"The current economic situation and the financial commitment to host a Rugby World Cup tournament was such that we felt a joint bid with all four unions of Ireland, England, Scotland and Wales would be the only viable format that Irish rugby could be part of," said IRFU CEO Philip Browne at the time.

"We examined in detail the possibility of other bid options alongside the positive spin-offs of hosting the tournament, but these did not satisfy all of the essential criteria for Irish rugby to remain involved in the process."

So what has changed?

The last time we checked household income and expenditure, the downturn still gripped tighter than ever before.

In fairness, the English RFU were never really interested in sharing a level economic pitch, especially without a larger capacity stadium and, when the IRFU heard how the English wanted to divvy up the pennies, they politely made their excuses and left the party.

Crucially, the IRFU are much further down the road in terms of accessing the necessary stadia with permission from the GAA, as well as ensuring the Government guarantee the €100m required by the IRB from successful hosts.

However, the IRFU must stump up all the costs for the visiting nations as well as the costs surrounding each match-day -- its only revenue comes from ticket sales, as the IRB hoover up all broadcasting and commercial income.

The only way that the IRFU can hope to make money, and for the Government to recoup its investment aside from tourism, is through boosting ticket sales.

Hence, the bigger the stadia, the better. Which is where the GAA come in.

GROUNDS FOR CONCERN

The IRFU simply could not go it alone were it not for the GAA -- Lansdowne Road's 51,000-seater stadium is too small for a Rugby World Cup final and is arguably too small for the semi-finals too.

Hence, the GAA's offer of six stadia will prove a boon to the Irish bidding process and, compared to New Zealand's minimalist staging, Ireland's effort bears favourable comparison if every bum fits every seat, which wasn't even the case last year.

Six GAA grounds -- Croke Park, Pairc Ui Chaoimh, Casement Park, Limerick's Gaelic Grounds, Pearse Stadium and Fitzgerald Stadium -- have been earmarked for inclusion in a bid.

The GAA, as an understandable quid pro quo, will exploit their acquiescence in any bid process by ensuring that their relevant ground improvements are catered for by Government funding.

Added to the existing Thomond Park, Musgrave Park, Ravenhill and RDS facilities, these 10 venues would be sufficient to stage the competition.

New Zealand provided an initial 13 stadia -- reduced to 12 after the Christchurch earthquake that rendered the AMI Stadium beyond use but, aside from Eden Park (60,000) and the WestPac Stadium (40,000), only four others topped 30,000 capacity, with five of the other six having a 20,000 capacity or less.

And, no more than Ireland seeking help from another sporting organisation, England will provide just three rugby stadia, including Twickenham, with six being borrowed from soccer.

Ireland's proposed 410,000 capacity compares favourably with the capacity of 345,000 provided in New Zealand's staging -- albeit there is no guarantee that every seat can be filled.

The more it costs to stage the competition, the higher the ticket prices.

PROFIT MARGINS

This is the nub of the issue. It is one thing to be able to host the tournament. Quite another to guarantee enough spondulicks to make it worthwhile.

The Rugby World Cup is the main cash cow of the IRB -- profits from the quadrennial showpiece are used by the governing body to plough back into the backwaters of the international game.

The 2011 staging in New Zealand, 24 years after the inaugural staging of the event there, was predominantly seen as an emotional investment and, although the IRB trousered €115m from the event, the NZRU lost €20m.

This, despite the fact that the 1.35m ticket sales generated an income of some €175m -- albeit their government indicates there is a potential windfall of €350m from tourism spin-offs in years to come.

However, these types of economic forecasts rarely offer succour to those who are opposed to splashing out from the tax-take, despite the positive evidence acquired from Ryder Cups to Heineken Cup and Europa League finals.

England, with their inordinate seating capacities thanks to big soccer stadia -- an astonishing 600,000 seats are at their disposal -- plan to sell at least twice as many tickets as New Zealand.

England's 2015 bid projects a €380m landslide of lolly for the IRB -- €280m in commercial returns from broadcasting, sponsorship and merchandising, and the IRB's stipulated €100m fee.

Any ticket income goes directly to the host nation, and England are confident that they can sell tickets for the least attractive games -- of which there are many -- for as little as a tenner.

Ultimately, Ireland will need to demonstrate to the IRB that they, rather than, say, Argentina, the USA or Russia, can generate enough income to satisfy the requirements that the Rugby World Cup remains a genuine money-spinner.

Sponsorship

Ireland's status in a favourable time zone for European broadcasters and its attraction for global corporate sponsorship will be plus points -- but will struggle to remain so if lined up in opposition to Russia, USA, Italy or Argentina.

Also, with the Government committed to upgrading several stadia and ensuring that infrastructural requirements are met, there will be additional costs well beyond the stipulated approximate €100m fee -- for example, New Zealand spent over €300m, although much of this was on infrastructural developments that were pre-planned.

The political will is clearly there, the enthusiasm of the sporting organisations has been expressed and the undoubted passion of a sports-obsessed country, belatedly blessed with 21st century infrastructure, clears the way for a realistic tilt at a historic hosting of either the 2023 or 2027 Rugby World Cup.

A lot can happen between now and then -- politics and chicanery are always constant bedfellows in such processes but, regardless of the arguments for and against Ireland, one factor will remain constant.

It's all about the money.

Irish Independent

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