First published on Running Rugby.
The Rugby World Cup may be the cash cow that funds the investment into rugby but the times they are a changing, gradually, and inclusion in the Olympics should accelerate that and open up a world of financial opportunities.
The World Cup in England next year is expected to create a surplus of over £150 million for World Rugby, the new incarnation of the IRB, to reinvest in the sport, a 63 per cent increase on the last tournament in New Zealand in 2011, but the Olympics could rival that if all goes well in Rio in 2016.
Almost double the number of countries could become involved in the sport and World Rugby’s head of competitions and performance, Mark Egan, wants to take advantage of that but says the first step is to put on the best possible show in Brazil.
“Being part of the Olympic programme means we are finding out that there is huge interest in the sport from countries that are yet to be members of the rugby family. We have 120 member unions of the IRB and there are 205 National Olympic Committees, so there are another 85 countries that have yet to embrace rugby,” he told delegates at the IRB World Rugby Conference and Exhibition in London.
“Our first priority is to have a successful appearance in Rio and we need to make sure that the competition on the field is the best that it can be and that is why we are investing more and more money into our international sevens competition programmes.
“We now invest approximately £7 million per year between the Men’s and Women’s Sevens World Series.”
He says not only has acceptance onto the Olympic programme given World Rugby access to markets they have previously struggled to enter but the finances on offer from National Olympic Committees across the globe are game-changing.
“Four years ago to go into those countries and promote rugby and get National Olympic Committees interested in developing the sport with us was very difficult but now because of the Olympic status that we have it is opening doors all over the world,” he said.
“There is a big incentive for National Olympic Committees to invest in our sport and that is a good thing because it is bringing funding in and it is also bringing in access to infrastructure. The USA teams are now training in the training centre in Chula Vista and they wouldn’t have had that opportunity four years ago.
“We have got to make sure that we put the best teams on the field and the qualification process works well and then that we sell out the 15,000-seater stadium, which is the biggest temporary venue at the Games, over six days of competition and 12 sessions.”
Mark Egan speaking at IRB CONFEX
World Rugby told Running Rugby back in March that it expected revenues from sevens to triple in the next three or four years and the executive director of the Association of Summer Olympic International Federations (ASOIF) says the IRB will receive a sum in the tens of millions of pounds after the Games in 2016 but that is just the start.
Andrew Ryan, who used to be the chief operating officer of the International Badminton Federation, says being welcomed into the Olympics brings hundreds of millions into a sport on top of that direct income.
“A very small amount of money will go to the IRB as its share after the Games but that will be nothing compared to the effect of the Olympic programme if you try to evaluate how much money every year worldwide will come into rugby,” he said.
“Once it is an Olympic sport you have got 204 National Olympic Committees and the resources that start getting pumped in to developing rugby in countries that have not really worked with rugby before are very significant.
“I previously headed up the administration for the International Badminton Federation and we tried to quantify the value of being an Olympic sport because some people actually questioned it and it was very easy to do.
“Following the Barcelona Games in 1992 we got our members to say what the uplift in support had been from governments around the world amongst what was then 150 countries and it was more than $100 million per year that was pouring into badminton purely because it was on the Olympic programme.”
The 2012/13 HSBC Sevens World Sevens drew in a global television audience of just 562,486 across nine rounds, which was a new record, but that will be dwarfed by the exposure the sport gets at the Olympics in Rio.
Ryan says the fact that one broadcaster has paid billions of dollars for the rights in a single country shows the impact it can have and he believes the places rugby can reach on television during the Olympics makes it an opportunity that money can’t buy and that the sport cannot pass up.
“I think that money isn’t the main thing but the TV audience is. Trying to put either sevens or 15-a-side rugby on TV and get it shown around the world is extremely difficult because normally you only have two countries involved in one match, so there are only two key customers,” he said.
“In the Olympic Games it is completely different. There are sums being paid by NBC in the United States for the television rights for the next few Games of $6.75 billion and that is just in one country.
“If you get it right, you show rugby sevens as the best it can be to a massive audience and the host broadcaster will use a different broadcast method because it knows that somewhere upwards of 90 per cent of the audience will be non-rugby people.
“So, they have to show it in a way that will appeal to people who don’t know what the rules are and that is where the real value is. You can’t pay for that, it is priceless.”
Ryan says if the product is right on the pitch, then the global viewing figures will be bigger than anything rugby has ever seen before and a host of new fans and players will be drawn in and that will increase the sport’s revenues exponentially.
A sold out stadium for all sessions is a vital ingredient in painting rugby in the best possible light and Ryan cautions that rugby must work hard on that front if it wants to retain its place in the Olympics moving forwards.
“The players who step out onto the pitch in the first match in the Olympic Games in Rio in 2016 will have a TV global audience bigger than any other for a rugby match,” he said.
“The broadcasting is absolutely essential to get right because this is your chance really to push rugby right into every corner of every country on the planet. Broadcast rights are sold in around 210 countries for the Olympic Games and the audiences are absolutely huge, so the opportunity for rugby is fantastic.
“We will evaluate the 306 events that will take place in Rio and that evaluation is done against 34 criteria involving the TV audience, the audience in the stadium and the global perception, so rugby has to keep working really hard.
“If the Olympic Games had been given to the country next door, it might not have been such a problem but there is work to do within Brazil to make sure the stadium is full.”
Egan says the 15-a-side form of the sport remains the priority for the IRB but that sevens is catching up and the world governing body is looking for a balanced approach when it comes to investment, with Olympic inclusion having already started to achieve its primary objective of spreading the gospel of rugby to a wider audience.
“We are trying to implement a balanced approach, particularly with our investments, but the 15-a-side game is the main form of the game and the Rugby World Cup is the main economic engine of the game for the International Rugby Board,” he said
“So, most of our high performance investments go into the 15-a-side game with our tier two unions and not sevens.
“Sevens is important and unions are beginning to get National Olympic funding as well and a bit of sponsorship and we have a very successful Sevens World Series supported by HSBC and we have grown the Women’s World Series from five to six tournaments.
“I think the Olympics will give us new roots and we are already seeing that in Central America where we have new countries coming on stream such as El Salvador, Guatemala and Ecuador and that is all we can ask for from the Olympic programme.”