On Super Rugby in America, redux

USARFU is trying to attract pro leagues in Europe and the southern hemisphere to the idea of placing franchises in America. You don't say?

'Commercially, rugby's future is in the US. All of the [International Rugby Board's] major sponsors have business interests in the US. USA Rugby is developing professionally and sensibly, but obviously is restrained in terms of its pace of growth by economic realities.

'What we need is access to a superior competition and until we can start playing in either Super Rugby (via a West Coast franchise), the Magners League (East Coast), or the Six Nations (funded partially by the IRB), then it will be difficult for us to progress at the pace the game needs'.

The quote belongs not to chief executive Nigel Melville, yesterday interviewed by Australia's Daily Telegraph on the possibility of Heineken Cup teams Stateside, but to chair Kevin Roberts, a year ago in the New Zealand Herald.

For the record, Melville, who is British, blandly confirmed he has been talking to Europeans. 'It's all about timing and looking at opportunity. New York, Boston and other areas have appeal to Europe and could be used for teams in the Heineken Cup', he observed.

The story gains heft after Melville rehearses the possibility of a fourth Super Rugby conference based in North America and perhaps also Japan.

'Do we have the players to do it tomorrow? No. But in three or four years time, if we knew that would happen, certainly a lot of players would be interested in playing professionally here in Super Rugby', Melville said.

Last fall, South African union deputy president Mark Alexander told Reuters that Argentina, now part of the Rugby Championship tournament, would probably be next in line because the cost of importing quality players is high; a domestic supply is attractive. 

Still more important, this February SANZAR chief executive Greg Peters signaled expansion plans are linked to the renewal of its television contract, which has several years to run. 'I don't think anything is off the table at all post-2015', he told the Sydney Morning Herald.

In the interim, Melville thus looks to be trying to keep the prospect front and center. In an unsigned blog post, USARFU played up the story for domestic audiences, asserting:

The USA looks poised to put a team into a professional league. The question is now, which one? Heineken Cup would mean an East Coast club needs to be prepped to take part, while Super 15 would imply a West Coast club.

'There are obviously a lot of questions that need to be answered', it concludes. No kidding. Everyone remembers Denver's Bledisloe Cup match; who now recalls Rugby Canada was once certain of a Sevens World Series tour stop in Toronto?

Talk is cheap, the union is cash poor. Maybe executive salaries should be reweighted toward performance bonuses?

Related: On Super Rugby in America

Comments

[bruce mclane]

Tony Smeeth laid out a plan for something similar several years ago. he chose celtic league, as HC is big money for clubs. It is tough to pull off. politics and money play a huge role.

unless someone is free to make money, they'll never do it for a sustained period of time and if they can't call their own shots, they won't do it.

therein lies the problem. the rugby tax collectors must be cut out for it to work for a sustained period. unlikely that the rugby revenue service will give that up.

[college]

In this blog post ( http://nigelmelville.com/2012/02/27/concussion-fact-sheet-pass-it-on/#comments ), NM contends that the Emirates deal brings in more than membership dues and sponsors brought in by parents (National Guard & now the HSAA one) alone.

Which would mean a million dollar plus sponsorship no? Is this accurate or no?

[NE7s]

Forget it, the travel expenses for Super Rugby franchises and Heineken Cup clubs to come to North America would be absurd. I think though that we could follow a similar model to the MLS or Super Rugby and form a joint partnership with Rugby Canada, similar to the NA4, to create a North American Super League. Put 6 regional teams in the US, something like Salt Lake City, Seattle, San Francisco, Chicago, Dallas, and New York, and 4 in Canada.

[Nigel's Dreaming]

Neither the Super League, H-Cup or any other pro league is going to move a match over to North America unless there is money to make. That means a stadium filled with more people than their home stadium and the sale of a ton of branded merchandise. That would mean that you would need to have one of these matches attended by about 25 to 30 thousand fans to cover the added costs to move the game.

So let's say you move a match to NYC for a H-cup game between Munster and say Saracens. At the very least you would need to fill Red Bull Arena (25K) at a minimum. Ideally, you put 40K to 50K in MetLife stadium. It isn't going to happen when Saracens can get 40K+ to one of their matches at Wembley Stadium.

As far as getting a franchise in the USA that is probably a decade off. Argentina will get one or two Super Rugby teams before the USA or Canada gets one. Argentina has the players and already gets crowds like this to a domestic club final - http://espndeportes.espn.go.com/videohub/video/clipDeportes?id=deportes:1412251&cc=3888 - complete with TV broadcast and corporate sponsorship in place with soccer stadiums galore to host matches.

[Peter Evans]

Men in suits ala consultants saying the obvious and slapping themselves on the back. We're so amateurish, lacrosse and soccer are having a good laugh. With thousands of channels on TV we can barely get a game to show. The best we have is UStream. We don't even have any clout getting quality pro games from abroad on TV/cable. Until we can get it on TV regularly with a professional broadcast crew, we have nothing.
The super league in USA and Canada is a great idea, but who will cover costs? A team from US playing in Europe? I don't think Eagles could beat the worst Magners team, let alone a S15 team. It will take money. NFL lost $30 mil a season trying to get football to work in Europe. How many LAUs have paid administrators and promoters to even move the game forward locally? I'm here in Houston with connections to so many foreign companies with money and ex pats with ties to rugby, yet we have nothing to write home about. We have several millionaires in our community who used to play the game, but they wouldn't put their hands in their pockets to start the ball rolling locally. Until we recognize we are just good talkers nothing will happen.

[Anon]

@Nigel's Dreaming:

You do realize how woeful attendance is for pro rugby, right? An American franchise wouldn't have to average that much, and potential television rights expansion might make up the cost difference alone.

Avg. attendance of pro rugby leagues (and, no, I don't like to use corporate sponsorship names for leagues):
Super Rugby: 19,602
Top 14: 15,119
Premiership: 11,657
Currie Cup: 11,433
Celtic League: 7,571
NZ Provincial Champinship: 7,203
Top League (Japan): 4,881
Rugby Pro D2 (France): 3,735
RFU Championship: 2,176
Super 10 (Italy): 1,443

Glendale alone already averages more than a lot of second-tier pro teams (Super 10, RFU Championship, Rugby Pro D2, etc.). There's no reason to believe that a team or two that most of the rugby community can rally around and watch on tv wouldn't command at least 10,000 or so fans per game with a decent amount of marketing muscle behind it. Or that an American/Canadian league couldn't be on par with leagues of similar caliber of talent (Super 10, Pro D2, RFU Championship, Top League, etc.).

There are a few spots in the world that can really pack in the fans (Durban, Cape Town, Auckland, Christchurch, London), but beyond that there's a pretty steep drop-off. America having teams in the drop-off zone is far from "dreaming."

[Nigel's Dreaming]

@Anon

I was presenting a scenario to have a one off H-cup match in the USA. Not a team based in the USA. Is English your second language?

A team in the USA competing in a European or SANZAR pro league is a non-starter unless the revenue upside is huge. We can't even get 10K for an Eagles test match!

[sevens]

If a US TV deal was part of the package, a Europen pro league might take interest in an East Coast franchise as revenues would be shared with all teams in the league. This would also open up more opportunities for US players to play on all teams across the league if US players were not restricted as they are now under foreign player regulations. Can Nigel deliver a US TV deal? Doubtful

[firenigelmelville.com]

I have a hard time with the words Nigel and deliver in the same sentence.

If Nigel Melville was evaluated on performance he would be fired.

[Armchair QB]

In case you missed it... The Rugby World Cup was just on American TV. The Eagles were on multiple times as well. I'd say Nigel had a fairly large part to play in that.

[sevens]

IRB manages the World Cup broadcast rights. Guessing Nigel was involved and learned from the experience. Churchill Cup also made it onto US TV. To get a European pro league interested Nigel will need to get multiple games on US TV every week for an entire season. Not easy but possible. Soccer pulled it off over the last decade.

[firenigelmelville.com]

Nigel had nothing to do with the RWC being on TV. The IRB sold the rights. Last time there was no buyer this time NBC/Universal step up. Melville isn't in the room or the discussion.

[Sergeant Hulka]

I'm more concerned with seeing this summer's international matches on TV rather than discussing some fictional league that probably will never come to existence.

[Grant Cole]

Firings and forced-resignations seem easy fixes to folks who have little to no control over a situation or issue AND who have thought themselves slighted by some member of leadership (usually the selected target). If you don't like the way USAR is doing things, be a leader and create something to change the situation. Tiger Rugby, YSC!, Gainline, etc were all started because the current establishment wasn't doing enough. Pick your niche and make your change in a positive manner.

RE: Nigel - Better the devil you know, than the one you do not know.

[Haystacks Calhoun]

Nigel is too busy screwing up College rugby to have time to screw up Pro rugby.

[College Coach]

Literally, Nigel was not even in the room when NBC negotiated for the RWC broadcast rights. He was in the building, but they left him out in the hallway. Literally.

As for Nigel screwing up college rugby, he's doing men's college rugby more favors than anyone realizes. The more things that go wrong at the top, the greater the chance that a critical mass is finally going to strike out on their own.

[Literally]

Literally... You must have been in the hallway with him then big shot. Tell us more about what you literally know. Literally nothing is what you know... Literally.

Nigel absolutely was in the room, or the Eagles XV would not be on TV. NBC is interested in 7s, because it's Olympic.

You and the other 19 People who signed Brett Costain's Petition can take your critical mass back to your moms basement while the rest of do something positive for the game.

College rugby? Don't you think the move to conferences is a move USA rugby supports? It's good for the growth of the game = USA rugby is for it.

You people are pathetic... Literally

[Craig]

I actually like that last post, "literally" well done.

[Outside The Box]

It's a bit creative and has a financial risk, but one possible solution to get our top players in a professional set-up is to reach out to our friends in the New Zealand RFU and specifically the folks at the Otago RFU. You probably know that the Otago RFU is going into liquidation with about 2M NZD in debt (1.6M USD) and it doesn't look like NZRFU is going to send them a lifeline.

So, I propose USA Rugby in partnership with a financial group or individual provided them a 5 year bridge loan and in return we get the following:

1)NZRFU lifts the foreign player rule for Otago for the Highlanders Super Rugby side and their ITM side for the term of the bridge loan. This may require cooperation from SANZAR.

2)Otago commits to develop 10 of our most promising young rugby players in the Highlanders Super Rugby competition and the ITM provincial rugby competition for the term of the loan.

3)Otago commits to develop 3 young USA coaches for the term of the loan.

We all know that USA Rugby Chairman Kevin Roberts is a keen fan of NZ rugby and he must have the professional contacts to put together a 2M USD investment group to partner with USA Rugby. 10 Eagle prospects and 3 coaches spending 5 years in NZ's top competitions would surely help the Eagles keep pace with our tier 2 competitors.

Let's get it done!

[I played drek rugby - and loved it]

Kevin Roberts as underwhelmed overwhelmingly in his role as chairman of US Rugby. Don't hold your breath expecting anything different now.

Most of the 1st line national team players are contracted overseas as it is. That is one area I believe EOS was able to help. His contacts did open a few doors.

Hiring an agent to get top flight US talent with professional or semi professional clubs overseas would make sense.

[college]

So Melville was correct about his contention on his blog, when challenged, that he has brought in more money in sponsorships than the ones brought in by rugby parents (national guard and the new HSAA one)??

[Really, with Seth]

Literally?

Really?

Seriously....

[7's vs 15's]

@outside the box,
you present a very interesting proposal and I believe it would benefit us rugby immensely both for players and coaches… how would the nzrfu accept this new offer and what type of precedent would it set for future teams with financial issues could be a question mark. at the same time why not extend this type offer to high caliber clubs across the pond? anything to expand our playing and coaching horizons.

[sevens]

In June the three top rugby promoters in North America will be hosting major rugby events. It will be interesting to see which event sells more tickets and gets higher TV ratings.

1) CRC in Philly hosted by USA Sevens
2) Canada vs USA in Kingston, Ontario hosted by Rugby Canada
3) USA vs Italy in Houston hosted by USA Rugby

[seabass]

Problem is that the Highlanders Super Rugby franchise are not tied in any way to the Otago Rugby Union. Aside from that, you have touched on what would be a nice idea.

[Anon]

If only Rugby Canada and USAR could lose millions of dollars and be considered a 'success' like USA Sevens...

[Outside The Box]

@seabass

Legally the Highlanders are a separate entity - part of the legal set-up for Super Rugby - but they rely on the Otago RFU for player/coach development, competitions for the Highlander's development sides and facilities like training grounds and stadiums. The Otago ITM side is completely tied to the Otago RFU.

I think some kind of deal could be struck, but it takes capital, leadership and a solid negotiator to get what USA Rugby needs.

[fact check]

CRC is a money maker as is the LV stop on the IRB series.

True this event nearly BK'ed USAR in Carson at the Home Depot and still lost money for USA 7's in San Diego. But now two years running it has been profitable in LV.

The CRC lost only a little money in Ohio mainly because the sponsorship was so strong, but has now turned profitable in Philly.

The reason for these event being profitable has everything to do with quality management. Something Nigel Melville and USAR know nothing about.

[7's vs 15's]

@fact check,
are you in the know with financials to support your claim?

[fact check]

Yes I am the accountant! Get real.

Both events now profitable. The attendance numbers in LV have been fantastic. LV is also a very generous location for rooms and meals deals.

The CRC is inexpensive with only domestic flights and better yet with several teams using ground transport.

12,000 fans on Sat sealed the deal. Not to mention selling out the sponsorships.

How great in it for NBC/Comcast to hold an event in the HQ city of parent company Comcast? Self fulfilling is the term that comes to mind. This type of logic escapes USAR.

NBC and USA 7's are good partners for each other. Can't see this same NBC being interested in working with USAR. USAR is a bad partner.

[MattD]

The Colorado vs Colorado State D1A collegiate rugby match is being broadcast on Fox Soccer Plus tonight at 9pm EST. DirectTV Channel 621.

Then the Chicago Griffins @ Glendale Raptors match is on afterwards at 12am.

[7's vs 15's]

@fact check,
i know attendance in LV has been good, especially this year, i saw firsthand, but attendance alone does not guarantee financial success….revenue vs. overhead, do you know either of these for the two events you cited? just wondering how solid your claims where.

[fact check]

rock solid!

Both events will return profits.

How about those Friday matches at LV... thousands of fans and very little extra cost. Nice!

[Joe the Plumber]

Let's look at the math on the big picture:

USA 7s has run the IRB event since 2003.

I estimate up until last year they have lost in the neighborhood of $1mil annually (just to use a round number), up until last year (2010). So from '03-'09 they lost est $6 million. Let's say in '10-'11 they turned $1 Million profit each year (including profit from CRI [I refuse to call it a championship])

$4 Million bucks in the hole. What would you all say if USAR had those kind of financials?

Come to think about it... everyone on this blog bitches about USAR financials, why doesn't USA 7s release theirs? Go on, I dare you.

[sevens]

USA Sevens is a private company and reports its results to its shareholders. How and why investors put money into USA Sevens is their business.
USAR taxes it members and should report results to its members. USAR is accountable to its members (in theory).
USA Sevens has access to more capital than USAR and as a result USA Sevens has been able to run higher profile marketing campaigns, sell more tickets, and get higher TV ratings for USA Sevens events.
USAR also gets license fees from USA Sevens which is good thing. Revenue without putting capital at risk is good for USAR.
USAR runs marketing on the cheap and gets what it pays for.
USAR should admit they are not very good at marketing, filling seats or lining up TV coverage and partner with successful well capitalized groups like USA Sevens to grow rugby.
RFU and other unions license events and USAR should do the same. USAR has enough problems to deal with in the SBROs, College Conferences, and new GUs and USAR should focus on adding value to the people giving them most of their revenue.

[fact check]

Joe

It was USAR who ran up those first two losses, it was why they had to sell the comp to USA7's. Those losses almost ruined USAR. In fact, the IRB had to step in and run the union.

Of course USAR bought high and sold low. They had to sell the international event just as the IOC is making rugby an Olympic sport and as the Olympic games broadcaster, NBC, develops an interest.

Now can some investor lose a few million to build a sport franchise? Yes they can.

Can USAR? No, because they aren't capable of managing dick! They haven't hire any business personnel. They haven't had a sponsorship director in four years. The CEO isn't a businessman. USAR does one thing mostly well and that is tax the membership and waste the revenue on non rugby building items.

[Bystander]

Am I the only person who noticed that USAR employees made up well over half of the staff at Las Vegas? Or that apparently USA Sevens has to use USAR's insurance for all sorts of things and couldn't afford it on its own?

[Haystacks Calhoun]

None of the three events mentioned will do as well as a BYU final in Utah.
BYU not USA Rugby will put 15,000 paying customers in the seats.

The College 7s in Philly is just silly. Some of the well known football schools had guys in uniform who couldnt make a high school football team.

Very few will buy tickets in Houston. Maybe in NY or SF but Houston ?

[college]

... um the college 7s in Philly is a winner and will continue to be regardless of your or anyone else's opinion on the quality of play.

[Haystacks Calhoun]

If I say the quality of play stinks it stinks. Little old ladies laugh while watching these clowns in rugby uniforms. Ever read the college clubs websites who are attending ? Begging parents and friends to buy certain amount of tickets so the place wont be empty ?

Philly is Silly !!!!

[Grant Cole]

If Houston breaks 20K in ticket sales (the stadium holds 22K, will it be another twelve years before the Eagles play there again?