Saturday 24 March 2018

RWC may be a silver lining for our cloud

When the dust had settled on this year's Rugby World Cup, New Zealand was left to count the cost of the tournament.

The country spent a fortune for the privilege of hosting the event. The International Rugby Board made a cool €90-odd million -- made up of the revenue from broadcasting rights and licence fees, and a large chunk of hello money from the host nation.

All in all, it is reckoned that the New Zealand taxpayer forked out over €300m on the World Cup, including €85m to the IRB, and a further €200m to upgrade stadia and facilities.

When a country indulges in this level of spending it does so because it believes there will be a return which will more than justify the expenditure and initially New Zealand believed its economy would reap the benefits. One report even suggested the tournament could deliver up to €450m in tourist spending with further gains over time.

Ultimately, these projections didn't even come close to stacking up. Despite revenue from ticket sales exceeding €150m, NZRU still lost €20m. This loss was almost entirely underwritten by the government, which itself was left bloodied by the lack of consumer spending during the event, reportedly €100m -- or less than a quarter of what had been predicted.

So was it all worth it? Prime Minister John Key said it was "money well spent" while Martin Snedden, CEO of RWC 2011, described it as "a great investment". Snedden added: "The profile I think that we received overseas, the quality of the profile, the fact that it was so overwhelmingly positive about New Zealand and our people, I am certain that it is well worthwhile."

Perhaps for the notoriously rugby-mad New Zealanders just seeing Richie McCaw cradle the Webb Ellis Cup was enough to justify the vast spending but, for number crunchers, it makes less sense in a country which is operating a deficit.

Fast forward then to last week, and Minister Leo Varadkar's declaration that "it would be great to host a major tournament like the Rugby World Cup in 2023".

Putting Ireland forward to host the event is not as outlandish as it might first seem. In the short history of the tournament, a clear pattern has emerged showing that when it is held in the northern hemisphere it is infinitely more profitable than when it is staged in the southern hemisphere. The IRB may have taken €90m this year, but four years earlier it took €133m home from France.

The reasons for this are simple. Rugby's biggest market is Europe. Television rights are significantly more valuable here than Down Under because the audience is bigger and start times for games can be set to attract the largest possible viewership without having to worry about a 12-hour time difference. There is also far greater potential to sell corporate packages and match tickets, neither of which matched expectations in New Zealand.

The bottom line is that 70 per cent of rugby's revenue is generated in Europe.

The next issue is the logistics and the GAA would have to be fully on board to pull this off. Ireland already has more hotel beds and a better road infrastructure and, with the GAA's involvement, it would have more stadia than New Zealand.

Crucially, there would also be easier access for visitors from the principal rugby-playing nations. The figures for the recent World Cup show that 133,200 visitors arrived in New Zealand during the tournament, a figure which could be easily surpassed here given Ireland's proximity to the well-supported Six Nations teams, as well as easy access from countries like South Africa and the USA.

With the GAA due to revamp Casement Park and Páirc uí Chaoimh, it is conceivable that the tournament could be staged in, say, six cities and ten venues: Lansdowne Road, the RDS and Croke Park in Dublin; Ravenhill and Casement Park in Belfast; Thomond Park and the Gaelic Grounds in Limerick, The Sportsground in Galway, Nowlan Park in Kilkenny and Páirc uí Chaoimh in Cork. Where New Zealand had to spend €200m upgrading its venues, Ireland would only be required to spend a fraction of that.

All of which leaves us with the amount of money the government would be expected to cough up. Hard decisions do not have to be taken yet as there are still three years to figure out if this is something the country can afford.

It is always difficult before the fact to do anything other than speculate about the return that can be generated by something like this. The idea of state-sponsored sports events is nothing new to this country. The Ryder Cup, Solheim Cup and the Volvo Ocean Race -- which returns to Galway again next summer -- all required significant financial commitments from the government. The hope is that the return on this investment makes it all worthwhile -- initially through a direct boost to the economy from the event itself and, longer term, through bringing the country to a broad international audience.

The government forked out almost €10m to attract the Solheim Cup and the Volvo Ocean Race, but the Ryder Cup was the real success story, generating an estimated €143m for the economy and attracting up to 90,000 visitors.

According to the Federation of Irish Sport, an estimated 143,000 golfers visit Ireland each year, creating an economic dividend of €110m, visiting cyclists spend €114m, hikers and walkers €494m and anglers €132m. There is also research in the UK which shows that while a tourist spends €500 per trip, a 'sports' tourist spends €900 per trip.

Sports tourism is a niche market, but one which now has an estimated global worth of €600bn. The Rugby World Cup is a growing event which has huge revenue-making potential so the question is, what is a slice of that pie worth to Ireland?

Sunday Indo Sport

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