The Awful Truth About The ARU's Financial Position

[TOCC]

If You go to HK and spend $12,873.
The HKRU gets exactly the $900? They get for the face value of the tickets.
Who gives a fuck about the economic benefits to the Hoteliers/Publicans of the host city.

Wow...
Hong Kong RFU has around $30million in cash reserves with a large portion attributed to what they call their golden egg, the 7's tournament...

Of course the economic benefits need to be considered, what do you think happens when cities bid for the rights to host a sporting tournament, it's basically an auction for the highest bidder.

 

[Train Without a Station]

There's a lot of hubris regarding the popularity and appeal of 7's. Currently 7's in Australia and most of the world has a lower fan base than 15's. Not sure exactly how it's a cash cow.

I'd say the NRC will bring in better revenue than any potential 2nd tier 7's series would.

Currently you get about 20,000 people to watch 7's. That's only a good crowd if you're the Waratahs. And that's only because it's a one off. People aren't going to come along to it every week.

It's not like the ARU are sitting there saying, oh we're making heaps of money from a one off event, let's sit on our laurels. It really doesn't make that much money, and it doesn't have the widespread appeal that people actually perceive.

 

[I like to watch]

Wow.
Hong Kong RFU has around $30million in cash reserves with a large portion attributed to what they call their golden egg, the 7's tournament.

Of course the economic benefits need to be considered, what do you think happens when cities bid for the rights to host a sporting tournament, it's basically an auction for the highest bidder.

You are comparing apples and oranges.
A city bids for an event,based on perceived economic benefits.
As a promoter for a specific event,profitability is about tickets sales,hospitality and sponsorship if allowed by the governing body.
The two are different issues.
In this utopia where Australia hosts a 7's tournament that entices 20,000 international visitors that spend an average of $3,000 each.
Of which $200 is spent on tickets to the event.
How much more than the $200 per head, does the ARU receive?

 

[Parse]

Sponsorship money from the corporates who are likely to receive income from the 20,000 international visitors.

 

[Braveheart81]

I think this is a problem we have in Australian rugby. We seem to care a lot less about creating a great competition in its own right than we do about developing Wallabies.

Super Rugby is one of the best provincial rugby competitions in the world and in the 18 years since the game went professional, Australia has increased their participation from 3 to 5 teams.

It's ridiculous to say that the ARU doesn't care about anything other than the Wallabies.

I think the ARU has their priorities right at the moment. They're working on getting the NRC off the ground which is the area where Australian rugby is most lacking.

Closing the gap between club rugby and super rugby is what will put Australia in the best position to expand our super rugby participation or move to a new competition with New Zealand in the future.

The NRC is a significant financial risk for the ARU to undertake at least from the perspective of keeping it going long term. It's just a shame that the ARC wasn't launched with more caution and a better plan to keep costs down and allow the competition to survive in the long term. Who knows where Australian rugby would be now if the ARC was about to launch its 8th season rather than the NRC launching its first.

 

[TOCC]

You are comparing apples and oranges.
A city bids for an event,based on perceived economic benefits.
As a promoter for a specific event,profitability is about tickets sales,hospitality and sponsorship if allowed by the governing body.
The two are different issues.
In this utopia where Australia hosts a 7's tournament that entices 20,000 international visitors that spend an average of $3,000 each.
Of which $200 is spent on tickets to the event.
How much more than the $200 per head, does the ARU receive?

No, the two issues are intertwined when talking about revenue for the governing body .

When cities bid for the hosting rights what do you think they are offering? Sponsorship of course, the QLD Govt is a major sponsor of the GC 7's. They are also a major sponsor of the fever pitch tournament which encompasses the whole week of events, schoolboy championships etc.

Ticket prices are an obvious way to bring in income, but in the case of 7's it also appeals to tourism body's like Events QLD(QLD Govt) who are willing to pay a premium to market the Gold Coast to a wider international market not just those who travel in for to the event.

 

[Train Without a Station]

Any expansion on this idea will limit the effectiveness of the existing. The QLD Government sponsor the GC 7's because people travel to attend. Hold more of these events, they are obviously going to be in different locations, and therefore less people travel to the GC event. The sponsorship drops, the attendance suffers and becomes less (if at all profitable).

 

[Braveheart81]

All this talk of 7s is important and certainly it is growing at a good pace, but cherry picking the Hong Kong 7s and suggesting that because they make a lot of money from it and Australia should too is a fair way off reality.

The Hong Kong event has been going since 1976 and as has been stated is very much a one off event at a destination with plenty of expats and within reach of lots of travellers.

The Australian 7s is massively smaller and one of nine of the annual events. Realistically, it's one of the smallest of those nine. We absolutely need to work on growing that but it will require a lot more Australian rugby fans to go to the event and in turn that should bring in some international visitors.

We struggle to support the rugby we have on offer already. I don't understand how people think having an extra event is just going to generate more money for the ARU. Unless attendances are high and there are strong TV deals involved, new events will lose money, not generate more profit.

 

[Omar Comin']

Currently you get about 20,000 people to watch 7's. That's only a good crowd if you're the Waratahs. And that's only because it's a one off. People aren't going to come along to it every week.

It's not like the ARU are sitting there saying, oh we're making heaps of money from a one off event, let's sit on our laurels. It really doesn't make that much money, and it doesn't have the widespread appeal that people actually perceive.

Our event is held at the Gold Coast which has a history of poor crowds for sport and isn't a major destination. Sevens works in major cities, so lets move it to Sydney, Melbourne or Brisbane and make it massive. 4 or 5 years ago the London 7's was a ghost town. This year it sold out Twickenham on the Saturday.

The appeal isn't just about the rugby, it's the atmosphere and the themes and the giant party. The fact the Saturday is better attended in most places than the finals day on Sunday is an indication of that.

A summer sevens series could be different. It could be more of a league between 8 or so teams than several separate tournaments. Rather than day long events you could have several game evenings that last for 2-3 hours featuring 8 matches each time. Once every team has played each other 2 or 3 times you could have a finals night. That sort of format would allow you to take matches throughout the country without it getting tedious. Plus it would be more suitable for TV.

 

[Train Without a Station]

New product like the NRC is a step in the right direction.

Super Rugby generally does/comes close to making money. The biggest financial strugglers, the Force, Rebels and Brumbies basically have the same infrastructure/staff/players to provide further product. Almost everything they make will be profit, minus modest match payments to new, lower tier players.

The QLD Reds, the currently most profitable are spreading across only 2 teams. Therefore they will likely incur minimal additional cost also. Surely these teams will financially perform reasonable well.

The biggest concern is in NSW, though the 4 teams are completely independent. Their biggest cost will like be their administration and coaching, which they will hopefully be able to cover and bring in some profitability.

Based on this though, there's reasonable basis to hope that WA, VIC, ACT and QLD can all whether the initial storm, and potentially even be slight profitable due to the minimal extra cost associated, in the period it takes to develop this into a more market friendly product, which will be able to command a TV deal that at least doubles the current expected income as a starting point.

 

[Omar Comin']

We struggle to support the rugby we have on offer already. I don't understand how people think having an extra event is just going to generate more money for the ARU. Unless attendances are high and there are strong TV deals involved, new events will lose money, not generate more profit.

No one would expect any new event to be an immediate financial saviour.

There is no immediate financial saviour for the ARU. It needs long term plans that aren't just the Wallabies becoming the best team in the world again (though that couldn't come at a better time, and surely we're due!)

Broadening the revenue base has to be part of the long term strategy.

 

[Train Without a Station]

A Summer 7's event is the stupidest financial prospect I've heard. You just say nobody goes to the 7's for the games actually, then propose an abbreviated competition based on the games.

People don't care about 7's as a spectator sport. You aren't tapping into new fans, your just riding on the back of existing, but already half don't care.

Who's going to play in the 7's comp? No major teams are, they already have a full schedule? Who's going to care about some 2nd and 3rd tier 7's players who probably can't cut it in grade running around?

If nobody wants to watch it, it's not suitable for TV.

The Gold Coast's poor history of crowds is an out-dated view. In 2014 citing the original Bears, the Gold Coast Seagulls or Chargers is pointless. These teams have not existed and failed for more than 2 decades.

The titans averages have been (http://stats.rleague.com/rl/crowds/titans.html):

2014 - 15,976
2013 - 14,028
2012 - 14,405
2011 - 15,428
2010 - 17,877
2009 - 19,178
2008 - 21,618
2007 - 21,849

The Suns averages have been (http://www.footywire.com/afl/footy/ta-gold-coast-suns):

2014 - 18,528
2013 - 17,726
2012 - 17,604
2011 - 22,075

The Suns have an average greater than 4/5 Super Rugby Franchises. For NRL, the Titans maintain a strong average.

Regardless these 7's events are meant to bring in external support. Gold Coast is known as a party and holiday destination. If that doesn't bring in the right level of crowd for a 7's event I fail to see how I capital city will.

 

[Omar Comin']

I didn't say people don't like 7's, I said the atmosphere is the lure. It's the same with attending 'event' sport in general. I've been to a couple of IRB sevens events (Vegas and London) and taken groups of people that knew nothing about rugby each time. All 20 somethings and all loved it. Have you ever attended an event?

Gold Coast is a beachy holiday location with a much smaller population compared to the major cities. The Wallabies game played there against Argentina didn't even sell out in that small stadium. People don't go there for a city break or to go to major sporting events. It's not the ideal location to create a huge sevens event.

You look at all the sevens legs in the world that are massive. All are in major cities that are also top tourist destinations. Play it at the SFS and you'll instantly double the crowds and publicity around it.

Re summer sevens - I'd start it fairly small and with squads representing the Australian super rugby teams and Fiji, Tonga and Samoa. The players would be 7's specialists, super rugby squad members, established 15's players with olympic ambitions and some imported foreigners from world 7's teams. Build it up over time and play it when everyone is starting to yearn for footy season again (after the test cricket and Australian open finish). Rugby has an amazing opportunity with sevens in the olympics. It just needs time and focus to develop as a sport Australian sport fans know and appreciate.

Doing nothing and just saying 'oh people aren't interested, don't bother' isn't an option.

 

[Train Without a Station]

No. I've never been to the 7's because I have no interest in 7's, and no interest in spending all day drinking at an event I have no interest in. I'd rather go to the cricket.



How many exclusive 7's fans does rugby 7's have that do not follow 15's? I'd wager almost none. Therefore you are only reducing your market, not at all increasing it.



Test matches have the same interest as an even as 7's does. My housemate does not really watch rugby at all, yet came along and enjoyed the Lions test at Melbourne last year. Likely would have enjoyed a Bledisloe Cup match if we had it too.



These comments are made on the basis that 7's will attract new fans, and create more 15's fans. I can't recall a single person I have ever mate raving or even discussing rugby 7's, that wasn't already a strong 15's supporter.



Australian Rugby does not need more useless events that nobody wants to watch on TV. They need more TV product which will attract viewers. That's what they are trying to develop with the NRC.



Doing nothing regarding 7's is an option if it's not going to be a profitable avenue. It's the best option in fact.

 

[Braveheart81]

There will potentially be the opportunity for 7s to grow after the 2016 Rio Olympics because sports fans who haven't had the opportunity to watch much 7s, might get a chance during the Olympics.

I really don't think there is an opportunity for growth amongst non rugby fans now though. It's not like there are a whole bunch of people excited to get on the 7s bandwagon because it is coming to the Olympics. If it gets exposure there and Australia does well then I definitely think there will be more opportunity after that.

 

[I like to watch]

No, the two issues are intertwined when talking about revenue for the governing body .

When cities bid for the hosting rights what do you think they are offering? Sponsorship of course, the QLD Govt is a major sponsor of the GC 7's. They are also a major sponsor of the fever pitch tournament which encompasses the whole week of events, schoolboy championships etc.

Ticket prices are an obvious way to bring in income, but in the case of 7's it also appeals to tourism body's like Events QLD(QLD Govt) who are willing to pay a premium to market the Gold Coast to a wider international market not just those who travel in for to the event.

That's just theoretical bullshit.
In the real world,last year people were hoping crowds would be big enough to ensure the event wouldn't be moved somewhere else.
They probably only needed to promise to run buses to the event,to win the bid.
If visitor spends $3k on his holiday,and $200 of that,is his ticket.
How much does the ARU make out of him?

 

[Sir Arthur Higgins]

exactly right. the 7's is only a money maker in hong kong, probably wellington and this year in England.
it does incredibly poorly in Japan and Glasgow from an attendance perspective and while the USA is improving its still not a block buster event/money spinner.
There's obviously an incentive from QLD to have the event on the gold coast, but it needs to be in a market that is more readily available for internationals and in a facility closer to a major city. Suncorp or AAMI park (i think the best option) is close to melbourne - you'd see more workers from Brisbane, Sydney, Perth, NZ, Hong Kong, Singapore tying on work trips to line up with the tournament. with more amenities for families, you'd see more people making a bigger trip of it. if someone doesn't want to go to the 7's one day, there are a lot of options aside from Robina Town Centre.
AAMI is the perfect size and Melbourne the perfect city for it. I have heard that Melbourne/AAMI or Sydney/Allianz is the goal as soon as the gold coast tourney ends.
i dont think 7's is a cash cow anywhere. outside of the IRB circuit there would be next to no viewership (read tv money) for 7s. it will take a couple of olympics for it to filter down in my opinion. even so, the current format means that it is a 3 day event...you can't do that every weekend without people getting bored of it.
the proposed USA format (see other thread, can't remember which one) that would see 4x12 minute quarters and unlimited rotations would lead to ridiculous scores and a fair bit of redundancy in terms of seeing too much of the game.

the IRB circuit should be fed by domestic circuits in Australia, USA/Canada, NZ, etc etc (each country). I'd like to see a d aus, NZ, pacific islands circuit made up of 5 australian teams, 5 kiwi teams and 2-3 island teams. from this each of those countries then selects the players for the national squads for the 7's circuit.
do the same thing in america with USA, Canada, Argentina. ditto UK, ditto France, Spain, Portugal and Italy
leads to a specialist 7's circuit and career path

 

[Train Without a Station]

No. Money leads to a specialist circuit and career path. Viewers lead to money. Which brings us back to no viewers.

 

[ParraEElsNRL]

http://afltables.com/afl/crowds/goldcoast.html

I like it how the union fan gives the titans home average while pumping up the suns average with away games against Victorian clubs where 50,000 turn up.

Way to try and knock RL as usual with lies and spin.

 

[Braveheart81]

http://afltables.com/afl/crowds/goldcoast.html

I like it how the union fan gives the titans home average while pumping up the suns average with away games against Victorian clubs where 50,000 turn up.

Way to try and knock RL as usual with lies and spin.

I'm pretty sure that was accidental mate. His point was to say that crowds in the Gold Coast are decent. It had absolutely nothing to do with comparing league and AFL crowds.