On the economics of European rugby

Today's Financial Times devotes a special section to illuminating the economics of European rugby. Implicitly, it demonstrates why the sports entertainment model isn't well suited to USARFU.

One of the most interesting figures is the Six Nations championship's annual gross revenue. At £220 to £250 million ($330-$375 million), the tournament generates 3 times the cash that the World Cup takes in over a comparable four-year period, according to chairman John Feehan. 

More important: 'A very high percentage of what [the tournament] take[s] in goes straight back out to the [member] unions,' Feehan told the FT, adding that the tournament's cost basis is less than three percent of annual income.

The Six Nations is the primary point of reference for the Eurocentric International Rugby Board, which would like other regional tournaments to obtain greater stature. But US internationals, which do well to break even, absorb far more of USARFU's operating capital, not to mention staff time.

On an individual level, the average salary in England's Premiership is given at £80,000, or $120,000. That compares with 2009's major league baseball minimum of $400,000 or football's minimum of $325,000. Note to college rugby players: Better to get that degree.

Elsewhere, the FT reports that ESPN is planning to extend its College Gameday programming, whereby commentators go on site to college football venues, to the Premiership. So, the broadcast network is extending its model to encompass the leading English brands. NBC's embracing the college 7s concept is the domestic corollary.

The FT spends some time on Argentina and Asia (i.e., Japan and Hong Kong), but betrays little familiarity with the American market. The given number of registered (CIPP) players is about 30 percent too low. That's just as well. Any substantive treatment of the US game needs to come to grips with the sports education model, which cannot be understood by numbers alone.

Coda: The FT fairly sneers at New Zealand's hosting the 2011 World Cup. But not every decision is premised solely on economics, as IRB chief Mike Miller rightly says. Sometimes the best course is what makes sense for the [rugby] community.

Comments

[Ray Viers]

Hi Kurt,
Could we have a link to the original article?
Thanks!

[Kurt]

Sorry, it's print only.

[Puggsley Tidewater]

I can see why the FT sneers at NZ hosting the RWC. No one is paying to watch rugby in NZ and they are deluding themselves into thinking rugby is still king down there! Have a look at the Super 14 games played at Westpac for instance - Murray Mexted said 'Good crowd' last w/e, when all you could see were the empty seats!

Its the same in Wales at the bright new stadiums like Cardiff's - its half empty most of the time. Mind you, who would want to watch the Magner's league? :-)

[crashtheline7]

Here is a link to a handful of FT rugby articles. Some very insightful stuff.

[crashtheline7]

http://news.google.com/news/search?um=1&cf=all&ned=us&hl=en&q=source%3Afinancial_times+rugby&cf=all&as_qdr=d&as_drrb=q

Might be hand to post the link ;)

[anon]

Listening to the ARN college podcast.

Ognell et al.

Do you think Notre Dame would continue to get TV contracts if all that mattered was on field product?

Ohio state football fills bowl stadiums at 7-6 better than an undefeated NC State team.

Yankees merchendise sells better than any other baseball team even when they are 500.

It's about branding. Sorry to St. Marys, Kutztown and all you other great mid major programs.

They got this one right. The rugby community will tune in to see PSU and Cal etc. Someone flipping through the channels will more likely stop and watch Florida Tennessee than St. Mary's vs Kutztown.

It's not about putting the best team on the field. It's about building an audience.

Thsi happens in every other sport. By the Yankees Red Sox building a TV audience that helps the Marlins and Brewers.

Michigan vs OSU helps Northwestern vs. Indiana.

This is why we need someone outside of Rugby to take control. What's better for rugby is not what's better for viewership.

TV timeouts. Prime time games. Thursday nigth college football.

When you are gearing towrds an audience it someotimes meaning choosing between whats best for the game and whats best for the specator.

Well guess what. Specators pays bills. It's as simple as that. Ride the coattales of big programs. It only makes rugby stronger.

Oh and BTW who knows who's 7's programs are the best???? Cal could suck at 7's. Noone knows how any other stack up. Cal wins on discipline and technique. Athletes matter alot more than in 15's and while 7's is this young in colleges it matters even more so.

Stop whining. The Programming director at NBC and the heads of USA 7's know WAY MORE than you Ognall, Lowe, Jones etc.

[college rugby]

Lowe complaining about college 7s live on freaking NBC was hilarious. Is there any debate/issue on college talk that he isnt on the wrong side of? The guy is sometimes so damn clueless.

I agree anon, big brands are important. But it doesnt have to be every single team. St. Mary's should be there instead of Michigan. That isn't going to make or break it and it will prevent a 200-0 score which would be very bad.

On the ARN podcast, Nigel came on to talk about the "strategic" plan which was basically to create a strategic plan. SO EMBARRASSING. unbelievably embarrassing. Jack went on a well-earned tirade ripping Nigel and Boulder to shreds for their bs plan. If this doesn't end the debate on Boulder's ineptitude in the college area then nothing will. 3 pages triple spaced. 2 lines on college 7s. 3 lines on varsity women's. Flat out pathetic. It is not in any way a strategic plan.

Oh and Jeremy, your editorial was pointless. Saying that most college teams are happy with USAR and are happy enough to dream about a chance at nationals. What's your point? Just because they aren't clamoring for more doesn't mean they dont deserve more from the governing body. Doesn't mean their money should go back to them. USAR is ripping off the college and high school game and you think that is just fine and instead rip a group of coaches trying to change it because of a logo issue. Weak Jeremy.

[very good Kurt]

Excellent Kurt,

This is why spending millions on the Eagles, while they trend from 19th to 15th and back, makes no sense. Why this is dumb management of the US rugby union.

Even if the Eagles were in the top 8, the financial model for international matches would remain the same as it is currently. Not providing the game a financial foothold in the US market. Our products are College and city based pro, not 80k people watching test rugby, it will never happen. Therefore spending a foolish high percentage of the USAR annual budget on an Eagle-centric plan is lame.

USAR has no funds for domestic rugby. No funds to build the game at its roots in an American manor because they are paying a CEO $300k a year who doesn't understand a thing about US sports. Paying a national team coach another $250k just furthers the point that this administration knows nothing about what they are doing.

Wrong plan. Wrong people.

The effects of the last four years of this failed administration will be felt for a long time on the future of US rugby.

Congress has likewise been poor at holding this administration accountable.

We need to save ourselves and our sport from these people.

[fix is in]

"Jack went on a well-earned tirade ripping Nigel and Boulder to shreds for their bs plan. If this doesn't end the debate on Boulder's ineptitude in the college area then nothing will".

Its all just talk I'm afraid, don't you see how USAR has stacked the deck?

The college committee has a bunch of no-work product college coaches from Congress on it. Congress and this committee is who accepts Melville's Strategic Plan. They won't find any issue with the plan quality.

Further the Board will protect Melville and his strat plan from any flack, because they also like the plan.

What they like is, no time-lines for getting anything done, no budget commitments, no policy commitments.

This plan allows them to look like they care about college rugby while continuing to rip the kids off at $1,300,000 a year. That's $5,000,000 over the term of this administration. The National Guard sponsorship, much of it aimed at college students brings the total rip off around $9,000,000.

Good for Jack, saying this isn't good enough, but his comments won't make a difference. The fix has been in for several years now. This isn't a membership elected, run, organization. US rugby is being held captive. The high schools at least have a plan to escape, the college will never get away. As the numbers above indicate, there's too much on the line for USAR to allow the colleges to get away.

[bigbadbdawg@gmail.com]

Let the Whining by The US Rugby Public Began....

[Bruce McLane]

Todd Clever does a video interview on www.ruggamatrixusa.com and Doug Brown, 2 time Stanley Cup Champion with the Red Wings, discusses the hockey set up in the USA and gives us some things we can learn from hockey to incorporate in rugby.

[lv_rugger]

Why don't the elite college programs just leave USA Rugby and form their own association? That seems like the most logical solution.

They could set-up their own championships, negotiate television rights and sponsorship. And, keep the money!!!

[Dinah Saw]

I agree with comments about the plan - it stinks for sure. But who is going to put it right?

I thought we had the person. He is a very astute politician as well as being a great coach. At the moment though, he seems preoccupied with blowing off at the USCRA one moment, then when it suits, he blows the other way at Mickey Mouse Nigel.

Right now rugby in this country needs leaders not astute pragmatists who are looking after their own interests. In times of crisis I'd like to think someone comes forward who is very well qualified and quite capable of leading us up the right path.

Some time ago I thought we had the person in our number, but I'm starting to see that they too busy picking splinters out of their ass from that fence they are sat on.

[Puggsley Tidewater]

Bring back Scott Johnson - he'll put it right
LMAO

[Youth Rugby Fan]

DSaw-You must be referring to Clark. I don't think he has blown off the USCRA, he just didn't sign up for your takeover. I think he believes USAR should manage college rugby, he has said it more than once on the ARN pod-cast. It appears he just doesn't think Nigel Melville is the man to do it. But this doesn't mean we start breaking the rugby union into pieces, because we have some lame dudes running the show. Maybe we should tell Melville to find other work and hire a real CEO. How about Dan Lyle? Or for that matter, almost any rugby and business qualified person with knowledge of the US sports marketplace. Why are we breaking US rugby up before we consider replacing the current disaster of an administration?

[John Coffey]

YRF - Totally agree

The problem is many think he's the natural choice to do the job above anyone else including the likes of Dan Lyle - but many of us are seeing that his brand of 'my way or the highway' is not what is needed. An empire builder he is, but with every emperor comes a little meglomania as well.

Then there is his ego - wow, only California is big enough to house that!

[LOL]

can you read coffey?

[John Coffey]

Perfectly well thank you your worship
BTW - nice mustache - very 1970's porn star-esque

[Where is our leverage?]

The problem, my friends, is leverage. All the prattle on this (esteemed) blog collected together will not move Mssr. Melville a millimeter in a direction he doesn't want to go because he is only accountable to the board, and they apparently believe that he is doing a bang-up job regardless of your or my protestations. Insomuch as he has the power cards in his hand, we will have to use other leverage than complaints to achieve our (collective) ends.

The goal: grow the game by exploiting the college game.

The mechanism: organize an elite competition season for well-branded men's college rugby teams with fewer than 7 regions, a total of 30 or so teams culminating in an end-of-May playoff over three weeks for the top 8 teams. Sell TV coverage of this competition for enough to fund the organization and compensate the teams involved for their legitimate expenses. Over time, the viewer base and revenues grow to a level that can fund other initiatives and services. The competition becomes a cash cow. Since the best teams in America play in this competition, regardless of others, it will be the de-facto national championship. Be there or be square.

Qualification of the administrator:
1. He/she wants the job = passionately believes in the goal and the means.
2. Is a great salesperson, marketer capable of articulate persuasion and expert framing of the issues to skeptical stakeholders.
3. Is a great manager, with a reputation for building consensus, attending to planning and detail and happens to be good at herding cats (read coaches and administrators).
4. Is a thought leader, known for being ahead of the pack, boldly leading rather than cautiously following.

Since Mr. Melville doesn't fit this list of requirements and he plainly isn't going to relinquish control of the college competition and playoffs voluntarily, the only solution is to use whatever leverage is available to help him see the wisdom of helping us by getting out of the way.

Key leverage: >$1M in college dues and the potential to co-opt budding relationships with sponsors for whom a key demographic is college students (National Guard, etc).

Mechanism: Before this year's USAR championships are completed, publish the schedule for the men's elite level rugby competition to be held during Spring 2011. Make it known that we don't see the relevance of a USAR Territorial/Local Union structure for the college game. Announce the 32 participating teams in late April. Tell us again why we should send our dues to USAR?

Predicted USAR response: Well, since you asked so nicely, we'll try to adapt the other playoff schedules (mostly) to your suggested (thank you) schedule. Gee, good idea about the spring season, and, based on revenue, we'll maybe help the teams out with a total of $20,OOO (total) that we'll allocate to help playoff teams' travel expenses. And oh, you better send us your dues or else.

Our response: A. Go pee up a rope or B. Thanks so much for seeing it our way.

Either way we win.

[Puggsley Tidewater]

Mr. Leverage - like it alot - problem is, like Dinah Saw said, there are too many with vested interests who have no balls.

[yee of little faith]

au contraire Puggs, much of what Leverage wrote is in the works, haven't you boys been paying attention?

[Puggsley Tidewater]

All I hear is alot of talk, talk, talk and more talk.

[Where is our leverage?]

You were maybe expecting music? This is a blog. What you get is talk. Hopefully, and this is only a hope, somebody occasionally says something intelligent. Raise your hand and tell us you want the job. Then tell us how your're going to do it. Then we'll shut up.

[Puggsley Tidewater]

Come to expect it on here - but all I'm hearing is talk from places that you would expect to see action.

The true power brokers in collegiate rugby (and I'm not talking about the USCRA) are too scared to take any real action!

So all this nonsense about withholding Cipp dues, is really just nothing but more talk. And the worst thing is that Roberts and Melville know it as well.

[Where is our leverage?]

It's just talk if there isn't a credible alternative to the USAR competition structure. If officials and venues are available, anyone can organize a championship and call it what they will. To be credible, it would require the perennial champions and their credible foes to decide to show up at it rather than the one put on by USAR. It seems that there is a critical mass of top teams that wants to hold an 8 team tournament during the last 3 weeks of May, with one game per weekend and with costs in line with what they already spend. They want to have a regular season that runs from late Feb to early May with sizable conferences made up of roughly comparable teams. They want to have predictable schedules with opponents that don't flake out when it's inconvenient. I don't think that those teams are going to be willing to wait for another year while USAR organizes its new college rugby department and studies the problem for a long time.

As Coach Clark points out, it's the colleges that own their own brands and TV/sponsorship rights, not USAR. If they wish to put on their own championship, who's to stop them? The only challenge is obtaining competent officials. I don't see USAR employing the "nuclear option" and banning certified officials from refereeing non-USAR playoff games. That would really poison the well.

I too await the folks with real decisive authority showing up with the thing already organized to tell us what they've done. Until they do, we are left to encourage them to act and to speculate on what would the the likely shape of their work product.

[wrt]

Puggsley what have you ever done, in anything, any aspect of your life, much less rugby, which suggest you're the man to bring the action and inaction of others to our attention?

[college rugby]

I am pretty sure Clark is in talks with a good amount of other top college teams about getting a super league off the ground. So whether he was sitting on the sidelines before he definitely is in the game now.

[Puggsley Tidewater]

Lots - but thank you for asking

Fed up with reading the literary wailing from blow hards like you who always have the balls to moan and bitch but do nothing about those nasty foreigners in Boulder.

Four years of inactivity by them is only matched by 4 years of spineless action by some very high profile members of the US Rugby community.

People like you can always see the problem but have no answer.

Auf Wiedersehn

[Jack Sparrow]

Lets hope that there is something happening behind the scenes before we all become the losers in this.

[GomezTidewater]

I know Pugley's game very well. It was like he was born to play. He insisted on wearing that hooped jumper and those long shorts, even in winter. On the field he was a go forward type of player.

In fact, one time he tackled his own fullback because he was running sideways, then raked him. He was that kind of player, a no nonsense kind of guy.