Later this week, either the US or Wales is expected to be named host nation of the 2018 7s World Cup.
Aiming to showcase the American game's trajectory while increasing the union's income, Boulder has aspired to such a trophy for a decade. But the tournament's economics are likely to fall short of expectations, judging from the experience of the Olympics and soccer's World Cup. Meanwhile, the very decision to bid points up the insulated nature of USARFU's board, which is almost completely unaccountable to the rugby public.
USARFU trumpeted its December 2014 tender but omited economic detail. As Andrew Zimbalist, the noted Smith College economics professor, makes clear in Circus Maximus: The Economic Gamble behind Hosting the Olympics and the World Cup, such an effort would amount to little more than propaganda. Local organizing bodies have a poor record of achieving short- or long-term benefits, as demonstrated by 19 independent academic studies examining these events from 1972-2010.
The San Francisco Giants and San Jose Earthquakes featured in the American presentation, the union highlighted. Will Chang, a director of USARFU, is part owner of the Giants and executive chair of the DC United soccer franchise, a sister club to the Earthquakes. The union's bid thus appears to steer business to a director's colleagues as well as his own interests, while the liability for any loss is likely to fall on the union itself.
Chang has recused himself from negotiations with the Giants, according to union officials. The venues will be rented as the union does with any international event, according to officials. Terms of the bid have not been made public.
There is no evidence of malfeasance. The issue, however, isn't corporate best practice but principal-agent conflict, a phenomenon whereby management acts according to its own preferences rather than those of the whole of the constituentcy. In the business world, for example, executives compensated in shares of company stock often act to increase share price, at risk of missteps that could jeopardize the firm's longer-term health.
There is no practical, regular occasion for American rugby's dues-paying members to influence the board's agenda, to ask for public accounting of the opportunity costs of hosting the 7s World Cup, or to evaluate the next-best investment opportunity. By design, members do not elect directors and cannot remove them. The five-person committee which nominates board members comprises one director, two recent directors, and two members of the union's congress, itself unelected by membership.
In addition to working with the pro franchises, USARFU also is eager to create inventory for IMG, the sports event management and marketing group with whom Boulder signed a 10-year pact last October.
In the instances of the Games and soccer's World Cup, enthusiasts point to economic studies which purport to show these events improve the brand of the host city and country while helping the locals turn a profit. Zimbalist shows the flawed basis of pre-event analysis, owing in part to failure to account for the economic effects of substitution and displacement. For example, business travelers often postpone trips while the sporting events are underway.
Further, candidates cities jostling with one another are contending for a monopolized products. In this respect, World Rugby (formerly the International Rugby Board) is like the International Olympic Committee and International Federational of Association Football (FIFA) in seeking to maximize guaranteed income, which is redistributed globally.
In the past 30 years, only Barcelona 1992, which Zimbalist describes as fitting the Summer Games into the city's long-term, post-Franco trajectory, has emerged without substantial debt and white elephant facilities. So it is that public opposition to the World Cup and Summer Games has sprung up in Rio de Janeiro, while Bostonians are protesting the possibility of bidding for the 2024 Games. Popular opinion in democratic societies is turning against the opportunity costs.
USARFU has never publicly detailed the economic performance of the 2012 Junior World Rugby Trophy championship, staged in Murray, Utah, and rumored to have made a loss. Apparently at the behest of World Rugby, it put money into field and grandstand improvements. The stand was torn down in 2013.