Showdown with the IRB

[Sandpit Fan]

NZRU may boycott 2015 RWC link

There's been a few posts about this, however I thought it probably deserved a thread of its own. Personally, I think it's good that someone has spoken up about it, and as the AB's are the major draw card, the NZRU has the firepower do it at the moment.

Quite a timely discussion to be having I think. From reading a few articles floating around the web (although dated 2008), the IRB is planning to charge the 2015 hosts England somewhere in the region of US$100 million for the priviledge of hosting the tournament.

Combined with the stopping of inbound tours in RWC years, and the sponsorship restrictions, it seems a one way street in the IRB's favour. One could argue the benefits of the proceeds being distributed to smaller member unions, however it should be possible to structure an arrangement where the top tier unions are not loosing money just to participate. That is not a sustainable situation.

 

[teach]

Steve tew has admitted it is an empty threat. There is no way that the ABs would not be there. The issue is the $13M it will cost the NZRFU to compete. Hopefully the IRB will make some changes before the arrangements for 2015 are finalised.

 

[Braveheart81]

NZRU has a point. It is definitely something that needs to be addressed.

The TV ratings and the host nation paying for the event (which are the IRB's source of funding) are only possible because the major countries generate the worldwide interest and the revenue.

The IRB is definitely doing a wonderful job of growing the game in the smaller nations as we have seen by the competitiveness at this RWC.

It can't be at the detriment of the top tier nations that generate the income in the game though.

 

[Antony]

I think it highlights something quite important about the finances of the NZRU.

They don't have any money. Like... none. Over the next few years we're going to see serious raids on junior ranks by Australian NRL teams, and increasing competition at the other end of a player's career from clubs in Europe/Japan (and maybe even the US in time). It's getting really unsustainable for New Zealand rugby.

If something isn't done (i.e. 1: fixing the problem highlighted here by Tew; and 2: allowing touring sides to claim a percentage of the revenue generated for the home unions) then NZ could end up going the way of Wales.

But there's no way we'd not compete in a World Cup (particularly if we don't win this one; it would look like a massive case of sour grapes.)

 

[EVERYFWDTHINKTHEYREA6OR7]

I am sorry but if the All Blacks don't have any money they may have to look in their own backyard to sort this situation out, or any union for that matter.

100mill to host it? Surely the govt would just pay that. The amount of money that the tournament would bring into the country would surely cover it.

What i don't understand is the restriction of inbound tests would that mean no one could play in that year in just england?

 

[Antony]

$100 mill to host it + building stadiums (probably not an issue for England/France/Australia; but for NZ/smaller-UK-unions/Japan(?) it would be) + sundry costs for infrastructure upgrades etc. + not being able to get sponsorship money under the clean-stadiums policy.

It all adds up. The New Zealand economy is making a loss out of the World Cup (except possibly taking a veeeeeeeeeery long view as to tourism revenue, with the initial wave of tourists recommending the experience etc.)

And the inbound test restrictions prevent all june tours between hemispheres, not just those to the host nation, don't they?

 

[Antony]

I am sorry but if the All Blacks don't have any money they may have to look in their own backyard to sort this situation out

Also, what do you mean by that? NZ isn't full of undiscovered pots of gold, it's a small country.

 

[rugbyskier]

It all adds up. The New Zealand economy is making a loss out of the World Cup (except possibly taking a veeeeeeeeeery long view as to tourism revenue, with the initial wave of tourists recommending the experience etc.)

Those benefits from inbound tourism are hard to quantify but are real. I was over for a week and had four nights in the Hawke's Bay region in between the matches in Auckland/Hamilton and Wellington. That was my first time there and I will definitely be back and I've told my father that he should have a golfing trip to Cape Kidnappers and do the food and wine thing in Napier, Hastings and Havelock North.

The other issue with big events like this is that the government (ie, all NZ taxpayers) are providing the funding but any economic benefits are delivered to specific industries/businesses.

 

[Army_Gav]

ARU is supporting it also: http://www.heraldsun.com.au/sport/r...p-boycott-threat/story-fn8ouw0e-1226149347227

 

[antipodean]

The problem the IRB faces is this is basically the only real fund raising element they have. Unfortunately it places stress on certain member unions.

If something isn't done (i.e. 1: fixing the problem highlighted here by Tew; and 2: allowing touring sides to claim a percentage of the revenue generated for the home unions) then NZ could end up going the way of Wales.

The shared gate is important. Also the development of a better rugby calendar and return to tours.

 

[Paddysboy]

I find this all a touch bizarre and IOCesque, as well as a case of a small country following heart over head. Sure the IRB should be able to get some dollars to pump money into developing the talents of other nations - well presumably that's the point of their existence. I don't get what seems to be a huge impost on host nations to be granted the privilege of hosting. I guess when you're talking about host nations like England - who 'spread the joy' through the UK, France and Ireland for games generally; South Africa with almost 50 million people; and Australia who had already built most of their stadia for the Olympics (so they had the right to play under 23 soccer matches I think), you have many more people and the money issues can be overcome more readily. When it comes to a country with about the resident population of Sydney, it starts to look like Montreal's problems after the 1976 Olympics - how long did they take to pay off the investment? 20 years? The IRB appears greedy, while at the same time, they put their call out for nominations to host and their rules are pretty clear (I doubt anyone thinks it will be cheap). Nobody asked NZ to throw their hat in for it. I don't really know what happened in the lead up to 2003 when Oz and NZ were originally to co-host but the impression I got was that there was some intransigence from NZ officials at the time, which I gather has brought us to where the issue is now.

Regardless, it seems to have been hugely successful so far and I'm sure people would be happy to see the All Blacks, who have been the best team going around for...well....since I can remember actually, win the bloody thing. Of course if the Wallabies can pull a few special efforts out of their backsides, I'm even happier, but um.....maybe not. However, I would think the IRB exists to benefit the game and if you have a look around the world there are a hell of a lot of Kiwis coaching in various roles and that's a fair example of the love and respect they have for union. A bit of middle ground must exist somewhere and I may be a bourbon or two beyond making good sense, but without the Kiwis, Rugby Union loses much. Then again, Tonga, Samoa and even Fiji would be stronger I guess......maybe shouldn't have said that. Erm...more bourbon!!

 

[grievous]

NZ to hold the the WC for all future WCs, all teams to pay the 20m entry fee, all teams to face the Haka on their knees before games..you heard it here first

 

[Jay]

Paddysboy - I don't think what Tew is saying is related to hosting, he's saying that merely by participating in the tournament they're losing revenue (through lost sponsorship opportunities and missed fixtures) and being paid a relative pittance for playing in the tournament. The NZRU were well aware this tournament wasn't a money maker for them, what they're saying is "Why should the IRB make huge profits off the tournament by expecting the participating nations to sacrifice their income". The ARU and SARU would be in a similar position, as would the 6N sides (who have to give up their lucrative inbound tour matches remember).

Now, I'm not saying Tew is correct - the tournament is a huge publicity spinner for rugby which surely should mean increased sponsorship and interest in the other 3 years, but just to clarify - it's not about the hosting rights.

 

[Sluggy]

NZRU has a point. It is definitely something that needs to be addressed.

The TV ratings and the host nation paying for the event (which are the IRB's source of funding) are only possible because the major countries generate the worldwide interest and the revenue.

The IRB is definitely doing a wonderful job of growing the game in the smaller nations as we have seen by the competitiveness at this RWC.

It can't be at the detriment of the top tier nations that generate the income in the game though.

Has anyone got a link to a pie chart or something showing how the IRB distributes the RWC revenue?

Surfing around I have found indications that the IRB distributes amounts to the top 10 unions which seem to exceed what it gives the second and third tier unions, but it also puts money into development outside the top 10, so that the split is hard to pin down.

What I can't find is how much it keeps for itself, although it seems to be modest on my rough calculations.

 

[Hawko]

NZRU has a point. It is definitely something that needs to be addressed.

The TV ratings and the host nation paying for the event (which are the IRB's source of funding) are only possible because the major countries generate the worldwide interest and the revenue.

The IRB is definitely doing a wonderful job of growing the game in the smaller nations as we have seen by the competitiveness at this RWC.

It can't be at the detriment of the top tier nations that generate the income in the game though.

This is similar to the political argument about overseas aid. BH probably subscribes to the view that "I think it is wonderful that our government is giving overseas aid to poorer countries but I don't want my taxes paying for it." If the IRB gives more money to the top nations there will be less money to develop rugby in the smaller nations. Its not rocket surgery! This self-interest from the CEO's of rugby nations who only get judged on their financial performance in their own countries is entirely understandable, but its not sustainable.

Why do Australia and New Zealand, relatively small countries who clearly punch way above their population weight, do so well at international competition? Because they expend a shirt-load of money on the game. And that includes paying its star players and administrators megabucks to do their job. Anyone recall the sheer amazement that someone thought Matt Giteau was worth $750,000 a year to rugby in Australia? And what it costs to run the rugby training camps and five star travel and accomodation the Wallabies and All Blacks enjoy dwarfs the costs that the tier two countries have expended to get to the Cup. The Pacific Islands have made it there via BBQ's and chook raffles.

It really comes down to whether the top tier nations will accept that the game worldwide will grow enormously from the money the IRB makes on World Cups and that will benefit all nations, including those tier one nations too! The growth of the smaller nations over the last few years has been phenomenonal. Another decade of growth as we have seen in the last ten years and a lot of the tier two nations will be challenging tier one nations. If the growth continues, Australia and New Zealand will look forward to international games against Georgia, Canada and Russia with trepidation not with disdain. But to achieve that growth you have to have investment in the minnow countries and it doesn't grow on trees. Every four years the IRB levies a tax on the tier one countries to pay for that investment. Its called the World Cup. And the benefits of that tax are that the game can grow worldwide, not just in tier one. There is a strong argument that the tax levied should be higher and broader so that the development of the game can be accelerated.

Steve Tew and John O'Neill know and understand this as much as anyone. The NZ rugby community knew what the World Cup would cost when they applied for it. Now they are wingeing about the financial pain they are experiencing to run it. Hullo? Every conservative politician knows they can make great mileage from attacking foreign aid and ST and JON are no different. But if the game is to grow worldwide (the overall financial pie to get bigger) then the rich rugby nations have to make financial sacrifices now to fund it. That means budgetting on four year cycles and putting money away in the good years to fund the lean years. But crying poor and demanding the IRB reduce development aid to the smaller rugby nations is much easier. Trouble is, the game worldwide will be poorer for it.

 

[the plastic paddy]

This is similar to the political argument about overseas aid. BH probably subscribes to the view that "I think it is wonderful that our government is giving overseas aid to poorer countries but I don't want my taxes paying for it." If the IRB gives more money to the top nations there will be less money to develop rugby in the smaller nations. Its not rocket surgery! This self-interest from the CEO's of rugby nations who only get judged on their financial performance in their own countries is entirely understandable, but its not sustainable.

Why do Australia and New Zealand, relatively small countries who clearly punch way above their population weight, do so well at international competition? Because they expend a shirt-load of money on the game. And that includes paying its star players and administrators megabucks to do their job. Anyone recall the sheer amazement that someone thought Matt Giteau was worth $750,000 a year to rugby in Australia? And what it costs to run the rugby training camps and five star travel and accomodation the Wallabies and All Blacks enjoy dwarfs the costs that the tier two countries have expended to get to the Cup. The Pacific Islands have made it there via BBQ's and chook raffles.

It really comes down to whether the top tier nations will accept that the game worldwide will grow enormously from the money the IRB makes on World Cups and that will benefit all nations, including those tier one nations too! The growth of the smaller nations over the last few years has been phenomenonal. Another decade of growth as we have seen in the last ten years and a lot of the tier two nations will be challenging tier one nations. If the growth continues, Australia and New Zealand will look forward to international games against Georgia, Canada and Russia with trepidation not with disdain. But to achieve that growth you have to have investment in the minnow countries and it doesn't grow on trees. Every four years the IRB levies a tax on the tier one countries to pay for that investment. Its called the World Cup. And the benefits of that tax are that the game can grow worldwide, not just in tier one. There is a strong argument that the tax levied should be higher and broader so that the development of the game can be accelerated.

Steve Tew and John O'Neill know and understand this as much as anyone. The NZ rugby community knew what the World Cup would cost when they applied for it. Now they are wingeing about the financial pain they are experiencing to run it. Hullo? Every conservative politician knows they can make great mileage from attacking foreign aid and ST and JON are no different. But if the game is to grow worldwide (the overall financial pie to get bigger) then the rich rugby nations have to make financial sacrifices now to fund it. That means budgetting on four year cycles and putting money away in the good years to fund the lean years. But crying poor and demanding the IRB reduce development aid to the smaller rugby nations is much easier. Trouble is, the game worldwide will be poorer for it.

Excellent post Hawko! Sums it up brilliantly. Rugby administators around the world love the hospitality etc but are incapable of running a fecking bath in a lot of instances. One query I have looking at NZ/Aussie S15 is where are your crowds? Ireland is roughly the same size as NZ and at the moment considerably poorer but Our structure seems to be self financing albeit with the inevitable sponsorship. This is, in a large part, down to excellent attendances. Why is turnout so poor with you guys? Too much television coverage? Poor pricing?

 

[Jay]

The NZ rugby community knew what the World Cup would cost when they applied for it. Now they are wingeing about the financial pain they are experiencing to run it.

Good post till this bit. Why do people have such trouble with the concept that Tew's arguments aren't actually related to hosting the WC?

 

[Nusadan]

Excellent post Hawko! Sums it up brilliantly. Rugby administators around the world love the hospitality etc but are incapable of running a fecking bath in a lot of instances. One query I have looking at NZ/Aussie S15 is where are your crowds? Ireland is roughly the same size as NZ and at the moment considerably poorer but Our structure seems to be self financing albeit with the inevitable sponsorship. This is, in a large part, down to excellent attendances. Why is turnout so poor with you guys? Too much television coverage? Poor pricing?

What else to do in Ireland apart from drinking Guinness?

Australia and NZ have too many other attractions...more so in case of Australia...

 

[Braveheart81]

Good post Hawko.

I don't think it would take a lot of tweaking to make it more acceptable to the larger nations. Small concessions such as being able to utilise sponsors at the tournament would help.

I didn't really like the foreign aid analogy but I thought the tax on tier 1 nations every four years to grow the minnow nations was spot on. I guess the point might be that the tax could be too hefty. Maybe it isn't sustainable to be trying to grow the minnow nations so quickly.

Of course I'm not really familiar with the finances of each of the major Rugby Unions so I don't really know how much they are crying poor or whether the funds they miss out on in the RWC year are actually having a detrimental affect on their finances.

 

[Dan54]

Why has anyone even bought hosting RWC into this thread?? All I can see is the argument that it could be played at slightly later time in year, and countries shouldn't have to drop their sponsors during World Cup. Probably one of reasons it has come from SH is that 6N is not affected in same way, I know you will get people like EVERY' who will think it a NZ needing more money, but it not about that. As has been pointed out ARU have same problem. What will happen in 2015 re 4N? Will it have to be played over 1 round so as to fit in WC. Couldn't it be played in Oct/Nov instead of Sept/Oct, normally that is when inbound tours are happening in NH!!