Where to for Super Rugby?

[Derpus]

Yes Bart will be getting nervous about Twiggy and his money.

But Bart has the ear of NZR.

With China turning the iron ore tap off i wonder if Twiggy will continue to be as generous with his funds.

 

[Dismal Pillock]

either a 6/4 or 6/3 plus a pacific side.

So the 5 NZ sides plus an Auckland Blues development team?

 

[Derpus]

I am also curious who is going to fund the PI team that keeps getting mentioned - NZ? World Rugby with all the loans they are giving out left and right? and if NZ is worried about the standard of AU teams how is a PI team going to be of a higher standard without a lot more investment? 


Another good point. My hopes of anything palatable coming next year are rapidly diminishing.

 

[sunnyboys]

What? When you say things like that i find it difficult to take the rest of what you've said seriously.

Yes it was meant as an extreme idea to highlight just how little bargaining power we have. Personally i think we have no bargaining power. Our administration of the sport here has show that we are incompetent in that facet, and its reflected in the on and off field performance of professional part of the game.

One of the most interesting snippets from that article was that NZR are talking about a comp THEY control. They aren't thinking of a new SANZAAR style partnership. and frankly who can blame them?

 

[sunnyboys]

Interesting reading the back and forward here. A lot of postulating on what should happen from a lot of people who don't have the slightest knowledge of the true economics or clear insight into what the real politics of the situation really are (outside the tidbits in the media). There are so many things we don't know such that I can't understand how some of you are firmly proposing things, stating this is what they should or shouldn't do.


For myself with Australian Rugby in mind, there needs to be key consideration towards a solution that nurtures Rugby here. The longterm viability of the sport relies on the positive association that the population has with the sport and the ability of the sport to continue to attract and inspire participation. We need the school kids to be talking about and inspiring to be part of the sport (I can guarantee you that they are not). There is obviously the argument that the Wallabies can provide all this (should they be winning), but I'm unconvinced, and it is way too fickle for those times when they aren’t (winning). The love has to be for the sport, not just a team. As such, any solution I feel needs to ensure that it enables people to experience and connect with the sport of Rugby in a positive and hopefully regular manner.


Is the solution domestic with a champions league setup, is it a TT comp with some number of teams against NZ. it's hard to say. I'm not sure that shrinking to 3 or 2 teams is a postive step but sometimes the realities of the situation force hard choices.


RA need to take some care in ensuring that it is about Rugby and the health of the sport in Australia vs. selling NZ Rugby to the Australian market.


I am also curious who is going to fund the PI team that keeps getting mentioned - NZ? World Rugby with all the loans they are giving out left and right? and if NZ is worried about the standard of AU teams how is a PI team going to be of a higher standard without a lot more investment? 






It's my understanding that there is already private equity investment in the NZ Super Rugby Franchises.

Don't WR (World Rugby) fund the Drua? and NRC has been canned. Could simply be a re-purpose of those funds (plus some extra to meet Super Rugby level wages).

If NZR allowed ABs selection from a PI side... that would certainly change things. and the team would have guaranteed crowd support in NZ.

 

[molman]

Aus fans, lets be a bit honest with ourselves:

• NZ have the TV deals and the cash
• They don't need Australia to survive at the level below Test
• Australia don't have a tv deal past SRAu this year
• We have a tiny RUGBY market - that is trending lower
• Having 2 Aus teams isn't going to make the 5 NZ teams struggle (as was suggested elsewhere up the chain)
• Australia have almost zero bargaining power in this discussion (we couldn't even threaten to withdraw from test rugby as it would send us broke).
• NZ will be the ones making a decision for themselves, not us - and that's ok.

Do NZRU have a TV deal for next year? The deal that was negotiated with Sky was based on a certain set of deliverables which may not be possible next year. I would imagine that like all contracts it will be open to renegotiation.

How cashed up are they actually? What are their overheads in retaining a high talent player pool with have economic opportunities in a range of markets?

Things like the proposed game against the Kangaroos flags to me an organisation trying to seek revenue through a range of novel means in a manner that I don't think would have been even contemplated using their brand in such a way in years gone by.

Also you might be overstating the position of NZRU not needing RA, particular with an eye to the longterm. The success of NZRU has occurred very much in a symbiosis with Australia. I'd be surprised if they see a purely domestic competition being the way forward in the long-run. It constrains their market, particularly TV markets in which to sell their product and promote their brands. It wouldn't be in NZRU's best interest to see Rugby as a sport diminish in Australia because they loose a large market to sell to.

Therefore, there is always bargaining to occur.

 

[Omar Comin']

I am also curious who is going to fund the PI team that keeps getting mentioned - NZ? World Rugby with all the loans they are giving out left and right? and if NZ is worried about the standard of AU teams how is a PI team going to be of a higher standard without a lot more investment?

This is a key point. Surely it would be easier for the Australian teams to sign a handful of PI players each (thus strengthening our squads) than to fund a whole new PI team. Add some Argentinians and Australia could hope to field 5 teams competitive with the NZ teams.

 

[Wilson]

I don't hate the idea of a few expat teams playing out of Australia to fill out an Australian competition - e.g. Sydney Fijian, Brisbane Argentine, Perth South African. As a short term proposition it may even be in the interests of Argentina/South Africa, if corona virus prevents them from playing any rugby at home next year. Might be a pipe dream from a funding perspective, unless there some sort of private ownership/equity that sees potential in it.

 

[molman]

Don't WR (World Rugby) fund the Drua? and NRC has been canned. Could simply be a re-purpose of those funds (plus some extra to meet Super Rugby level wages).

If NZR allowed ABs selection from a PI side. that would certainly change things. and the team would have guaranteed crowd support in NZ.

So Drua Standard is acceptable, but Rebels/Force teams aren’t? Look forward to seeing some AllBlack props have their ears bitten (https://www.sbs.com.au/news/fijian-drua-make-impression-as-hooker-gets-20-week-biting-ban)



The PI thing has been floated for years (and years), but it just never seemed to add up financially and there was no particular upside for NZRU or RA as it didn't really expand your market vs. Argentina or Japan. There is also this odd cultural insensitivity in just lumping Pacific Islanders in as one group, ignoring all the politics of where you base them, which PI culture do they really represent etc... I mean Fiji is probably the likely, but it would wrong to give them some overarching PI label and not acknowledge the new inequalities you might be creating in the region.

 

[Teh Other Dave]

Do NZRU have a TV deal for next year? The deal that was negotiated with Sky was based on a certain set of deliverables which may not be possible next year. I would imagine that like all contracts it will be open to renegotiation.

How cashed up are they actually? What are their overheads in retaining a high talent player pool with have economic opportunities in a range of markets?

Things like the proposed game against the Kangaroos flags to me an organisation trying to seek revenue through a range of novel means in a manner that I don't think would have been even contemplated using their brand in such a way in years gone by.

Also you might be overstating the position of NZRU not needing RA, particular with an eye to the longterm. The success of NZRU has occurred very much in a symbiosis with Australia. I'd be surprised if they see a purely domestic competition being the way forward in the long-run. It constrains their market, particularly TV markets in which to sell their product and promote their brands. It wouldn't be in NZRU's best interest to see Rugby as a sport diminish in Australia because they loose a large market to sell to.

Therefore, there is always bargaining to occur.

Moreover, my understanding was that pre-rona, a large portion of the SANZAAR revenue came from SuperSport.

Make no mistake, NZ need an export market. Being bullish and demanding only 2 Australian teams sounds more like posturing rather than a fair dinkum negotiation position. Even though the game is tanking here, limiting the comp to Brisbane and Canberra would be the worst of both worlds.

 

[Teh Other Dave]

Actually, someone made the salient point that the SANZAAR agreement didn't allow for a comp excluding any of the partners. If this is indeed correct, we probably shouldn't be killing the golden goose of the Rugby Championship.

 

[molman]

Moreover, my understanding was that pre-rona, a large portion of the SANZAAR revenue came from SuperSport.

Much larger country, 57.8mil vs. 4.9mil, with a much larger viewership/audience. I have no idea of most recent numbers, but it used to be around 65-70% of the viewership for Super Rugby came from SA, and around 20% NZ and the remaining 10% in AU.

It's no understatement to say we lose a lot by no longer partnering with SA and it's pretty obvious why the model has been persevered with. Having some kind of Super Rugby Champions League might be worth considering. It probably takes things to the natural conclusion of where they were heading with the conference system.

 

[Omar Comin']

Much larger country, 57.8mil vs. 4.9mil, with a much larger viewership/audience. I have no idea of most recent numbers, but it used to be around 65-70% of the viewership for Super Rugby came from SA, and around 20% NZ and the remaining 10% in AU.

Not all viewers are equally valuable to advertisers and therefore broadcasters. The unfortunate reality is that South Africa is a poor country, while Australia and New Zealand are wealthy. Australia's GDP per capita in US dollars is $57k, New Zealand $42k and South Africa $6.4k. I doubt the South African rights were ever really a huge cash cow for Australia and New Zealand.

 

[Wilson]

Moreover, my understanding was that pre-rona, a large portion of the SANZAAR revenue came from SuperSport.

I think you'll find that hasn't been the case for some time:

This reflects their contributions under the last deal, with the Sky deal worth $US32 million a year (although that includes the Mitre 10 Cup), Fox Sports adding $US24m and SuperSport $U26 million (SARU sells the Currie Cup separately, and the size of that deal has caused friction in the past).

https://www.stuff.co.nz/sport/rugby/all-blacks/121523112/why-nz-rugby-could-now-rip-up-super-rugby

It used to be more but has reduced in part due to the week rand, and in part due to the fact that SA has been able to negotiate quite large payments for the currie cup (equivalent to the Super Rugby payments). IT's been speculated that they did this to avoid sharing more of the super sport money.

Much larger country, 57.8mil vs. 4.9mil, with a much larger viewership/audience. I have no idea of most recent numbers, but it used to be around 65-70% of the viewership for Super Rugby came from SA, and around 20% NZ and the remaining 10% in AU.

Break down is more like NZ 30%, SA 24%, Aus 22.5%, UK 23.5%, though I believe that UK portion (£20m) was negotiated in pounds so there is some variability compared to the rest. EDIT: Sorry, miss read your post as a revenue breakdown, not a viewership breakdown.

 

[WorkingClassRugger]

If NZ do play hardball or decide to go their own way it will be interesting to see what sort of private investment interest there is in Australia in funding new teams or a new Australian professional competition. I think an 8 team competition with our players plus a decent number of Argentinians, South Africans and Pacific Islanders could be great.

It would need significant financial backing but as long as those investors have a high amount of control over the teams and the competition (within certain parameters set by RA) I feel optimistic that there would be interest. Mainly because I imagine that if I had a very high net worth it'd be something I'd be very interested in. And if I could participate in an own the force type initiative either for the competition itself or for a Northern Sydney team I'd take part.

I think the best model to sell to private equity would be a whole league structure more so than individual teams. But I do agree. I think similar to what is suggest in the Robinson article a 'Big Bash' like domestic league that looks to sign international talent to supplement the local players would be something I would be very interested in watching.

 

[Wilson]

Also worth noting the rand has absolutely tanked as a result of corona virus, so it's hard to see supersport being able to offer decent money going forward

 

[barbarian]

I think the best model to sell to private equity would be a whole league structure more so than individual teams. But I do agree. I think similar to what is suggest in the Robinson article a 'Big Bash' like domestic league that looks to sign international talent to supplement the local players would be something I would be very interested in watching.

No idea how we sign international talent without serious PE investment. Or RA discovering vast oil reserves beneath their HQ in Moore Park.

 

[zer0]

On funding contributions:

Sanzaar broadcasting deals have always been complex beasts to unravel, leaving spectators confused about who pays what, and to whom. The money each country brings is pooled, although separate deals for domestic competitions such as the Currie Cup can reduce the size of the pot.

Stuff understands that under the current 2016-2020 Sanzaar arrangements New Zealand, Australia and South Africa get an equal share of the broadcasting pot – one-third– with a set amount set aside for Argentina. This reflects their contributions under the last deal, with the Sky [NZ] deal worth $US32 million a year (although that includes the Mitre 10 Cup), Fox Sports adding $US24m and SuperSport $U26 million (SARU sells the Currie Cup separately, and the size of that deal has caused friction in the past).

However, you can burn that model because the ground has shifted in the past few years, and was doing so even before the coronavirus. Stuff has been told that the massive deal NZ Rugby struck with Sky is worth up to $100m a year (that figure also includes domestic tests that are not part of the Sanzaar deal) while the SuperSport deal was tipped to be flat. That's a huge increase for NZ Rugby, as in 2016 and 2018 (the most recent non-British and Irish Lions tours years) its broadcast revenues were $73m a year. The ailing Sanzaar partner is clearly Australia, where Fox Sports is reportedly in a position to only offer $A15-20m a year for the 2021-2026 rights.

From the same article, comments by a sports marketing guy who apparently predicted the big NZR deal:

Armed with the above figures, we approached sports and media rights expert Colin Smith of Global Sports and Media, who correctly anticipated the bumper Sky deal. "I think there is an opportunity for New Zealand to retain the five [Super Rugby] franchises but increasing them to a minimum of eight," Smith said. "And having that a professional competition in itself and then you could have a crossover of the top two, or top three, playing the top two of the Currie Cup. "If Australia gets its act together it cold also play in that as well. "It would be a mini Champions League".

.....

"[Smith's] personal view is that I don't think that Super Rugby as it's currently configured can continue in its current model. It is not sustainable." Smith's logic for an eight-team Kiwi competition is simple: it's a numbers game. While the 14-team Super Rugby format agreed for next year might not excite fans, it gives Sky seven games a weekend of 'content' and Sky gets the Australia and South Africa-hosted games for 'free' (no production costs).

Smith said that Sky might therefore renegotiate the NZ Rugby deal to reflect the 'lost' games but when asked if NZ Rugby could make the replacement product just as valuable by adding three more Kiwi teams to provide four high-value games a weekend, he said: "It could be. I think that's the strategy that NZ Rugby is undertaking now with the Aratipu review. [NZR] are realising they have re-look at the whole structure of New Zealand rugby". Sky would have to wear the additional production costs for that competition and pass that on, but Smith pointed out that without the huge travel and accommodation costs involved in Super Rugby, NZ Rugby could make savings elsewhere. "It's the most expensive sports competition in the world," Smith said. "It's more expensive than the NFL, NBA, English Premier League and UEFA Champions League."

Sky has its own pressures to deal with. No one can say for certainty if they will be in a position to honour the same terms of the NZ Rugby deal in the post-Covid-19 world, although having invested hugely in rugby through the broadcast deal, the acquisition of digital platform RugbyPass and the newly re-named Sky Stadium in Wellington, it clearly sees the sport as fundamental to its future.

https://www.stuff.co.nz/sport/rugby/all-blacks/121523112/why-nz-rugby-could-now-rip-up-super-rugby

Mr sports advertising guy's comments on NZR wanting eight teams in a domestic focused competition may be the line of thinking for those NZR board members wanting the two Australian teams and PI side thrown into SRA. E.g. scrape together enough teams to sate the terms of the big $$$ broadcasting deal. Slight difference being that, rather than dilute the NZ resources to eight teams, they're wanting to keep the five and may be, instead, trying to outsource the other two/three teams to Australia.

 

[half]

Molman won the post that reached the million mark...

​

 

[WorkingClassRugger]

No idea how we sign international talent without serious PE investment. Or RA discovering vast oil reserves beneath their HQ in Moore Park.

Obviously.