On closing ranks round the USA 7s

The privately owned USA 7s has demonstrably outstripped American rugby’s other commercial endeavors, marking a new phase in efforts to tap the domestic sports entertainment market.

Since 2006, the tournament has re-established itself in a leading US rugby town, ensconced itself in a world-class venue, and connected with a Major League Baseball franchise. Thus the 2008 edition drew 34,000 paying fans, up 44 percent from year-ago figures and streets ahead of attendance in suburban Los Angeles.

Commercial sponsorship appears on a similar trajectory. Most important, the USA 7s is on its way to making money, according to people familiar with the matter.

By contrast, there have been continuing losses for the Churchill Cup and North American 4, owned and operated by USA Rugby in conjunction with other unions, and heavily reliant on RFU or IRB subsidies. The private Rugby Super League is self-supporting but far below the standard of the 7s World Series. And while the college championship may someday access the proven market for school sports, the Boulder would have to discard low-rent facilities like Albuquerque and begin compensating participating teams (as with NCAA football and basketball).

Indeed, American International Media, owner of the USA 7s and also Rugby Magazine, carries costs such airfare and accommodations for 16 teams plus international officials that easily supersede the aforementioned. When USA Rugby tried to run the 7s tournament at the Home Depot Center, it ruinously failed under the burden.

Since the emerging model suggests improvements in both cost management and revenue generation, USA Rugby should embrace the opportunity and sweep away anyone and anything that is slowing the tournament’s commercial progress, to benefit both the union itself and all who are part of the American game.

Every one of USA Rugby’s properties could benefit from ice cut by AIM – including those that will never be profitable but are nonetheless vital to dues-paying members – not only through of sales and sponsorship synergies, but also since the union still owns a small percentage of the 7s. It will start accruing royalties as soon the event turns cash-flow positive. (Boulder annually receives a licensing fee no matter the tournament’s financial performance.)

It’s far from clear that another 2005 licensing deal will turn out so well: the IRB is known to be worried about changing the game’s rules and gambling, as envisioned by the American Rugby Football League. USA Rugby is lucky the USA 7s was bought by Jon Prusmack, a good rugby man willing not only to absorb residual losses (such as the lease at Carson’s Home Depot Center) but also to hew to the game’s straight and narrow.

Let’s discard the baggage of politicos embarrassed they had to sell the event in 2005 to stave off bankruptcy, and close ranks around the USA 7s. One place to start: the union’s chairman and directors should all attend San Diego.

Comments

[M.O.]

I think a close affiliation by USA Rugby and AIM is a smart idea.

USA Soccer owns their marketing/event arm SUM (Soccer United Marketing) that sells and puts on all of the various soccer events in the USA, including those that that do not include the USA national team. This has led to USA Soccer to become extremely successful.

[Phil]

Jon Prusmack's running of the USA Sevens compared with USA Rugby's running of the same is night and day better. USA Rugby and their 50 employees couldn't touch what one good rugby man and a few of his employees pulled off.

Now lets talk about USA Rugby and the remote balloon airstrip for the college post season. What's the chance that USA Rugby would sell the college event rights to Prusmack, so this same excellence could be brought to US College rugby?

[TH]

The collegiate tournament is not commercially viable. Even if offered, he wouldn't go near it for that reason.

There's a big difference between running a weekend event full of international rugby teams full of professionals and running an amateur tournament that takes place over the course of weeks and involves college teams that most wouldn't pay to watch. Without NCAA status, collegiate rugby will never bring in the money.

Maybe if he were offered something like the D-I Final 4 for a very small investment, then he could possibly turn it into something profitable. But, again... nothing compared to the money to be made running the 7's tournament.

Prusmack is a rugby man, but he's a business man too.

[Phil]

Yes that's what I had in mind. Prusmack would purchase from USA Rugby the rights to the round of 16, through the championship match.

USA Rugby would just get out of the way and Prusmacks team would select the venues, broadcasting package, sponsorships.

In time, Prusmack makes money selling some very good sporting brands playing the sport of rugby. The college players have a far better experience than the balloon festival. While USA Rugby gets to focus on something, anything that they can actually do. Or better said, mess up something less important.

[Nick]

Perhaps people might want to wait until after the much maligned "balloon festival" before they stick the knife in any further?

[JTanG_Shogun]

Prusmack's team had enough trouble drumming up sponsorship and broadcasting rights for IRB Sevens, an internationally recognized event, let alone something that isn't commercially viable just yet. Y'all seem to think that this should be on ESPN primetime, and it just isn't that big yet. If you have complaints about this, send them to ESPN so they see the demand to televise these kinds of events.

[Hutch Turner]

The USA7s are undeniably at a pivotal point. If the USARFU leadership screws this endeavour up it will make a compelling case for rugby union to move further into the private sector and the growth potential it provides. Two key elements of any future USA7's growth are consistency and positive cash flow.

Rugby's inability to put non-affiliated spectators into traditional venue seats has limited its appeal to marketing specialists whose stage is national in scope. Empty seats are something a sponsor wants to avoid. The International 7s is a unique spectacle that can alter the present paradigm by pulling in non-affiliated spectators attracted by its speed, tension, pace, and constant change. It's format is almost perfect for TV programming.

The present USA7s entrepreneurs present a golden opportunity for a step function positive change in the public's perception of the sport. It offers the opportunity for the sport to grow using other people's money rather than the self-limiting participant funding model.

Similar opportunities have been presented to the USARFU in the past that have been squandered and consequently negatively affected the sport. If this happens again the rugby community should take a serious look at redefining the sport in the US and toss the USARFU in its present form into the shredder.