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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.

4 Canadian, 1 US team in NA4 successor

The North American 4's successor includes four Canadian teams to America's one, while USARFU's 2010 schedule again omits the senior National All-Star Championship.

Canada's entrants in the rejiggered Americas Rugby Championship will play a September round-robin, but the International Rugby Board and USARFU failed to lay out a match schedule for USA 'A', the sole US entrant, or any regional 'high performance' teams that might feed into coach Paul Keeler's outfit.

USARFU executives did not respond to queries.

Billed as a development vehicle and underwritten by Dublin, the 2009 ARC precludes US college students even as our greatest rival appears to enjoy the lions share of funding: America is reduced to one team of inherently older players. Simultaneously, Boulder has quietly written off the country's oldest elite championship, meaning fewer players have a practical chance at reaching the 'A' level, particularly those outside the Super League.

Argentina's Jaguars make up the sixth team, and are to play USA 'A' in an October 10 semifinal, according to previous reports, the same day as two of the four Canadian teams square off. The Canuck contenders are provincial sides Ontario and British Columbia and composite teams Atlantic and Prairies.

Over its three years, the NA4 failed to attract any media, commercial, or fan interest. Played at various times through the spring and summer, the competition was to spawn 'public-private' partnerships with investors, but suffered from fielding synthetic teams with no history and lack of permanent administration able to lay forward-looking plans.

In America, the Falcons and Hawks were often used as de facto national team trials, with the two units sometimes staying in the same hotel and players switching sides from game to game.

The ARC's fall schedule builds into the so-called November international window, and this year would facilitate Eagle preparations for World Cup qualifying matches with Uruguay (as well as a one-off with Fiji, which saw a European match fall through). More generally, November tests are commercially vital to the European powers but have mattered less to America as international rugby typically is a loss-making enterprise.

In its assessment of 2008, USARFU credited itself with launching four HP regions (Pacific, West, Midwest, East) but union officials had not had been able to say much about a competitive program building into the 'A' side. The regions would be very like America's founding four territories, but in another piece of irony, USARFU last year said it was moving away from regionally based high performance officers and academies.

US World Cup media coverage improving

American media is following the World Cup more closely than in past years.

The evidence lies not in features stories about Eagle players and the USA's uphill battle, but in the number of so-called wire service accounts of the knockout rounds, as well as treatment of Rugby World Cup as a business. For example, the New York Times and many other Sunday and Monday papers picked up the results of this weekend's semifinals.

Almost without fail, America's best and most ambitious teams regularly appear in the local sports section, alongside other 'minor' sports like soccer, lacrosse, or tennis. That's important because it demonstrates the sports editor treating rugby as an athletic endeavor, and regularly making decisions about its news value.

By contrast, sports that live by the feature story die by the feature story: mainstream sports with clever storylines as well as 'spot news' inevitably trump the small fry.

Of course, Associated Press-type coverage can lack the detail or nuance that rugby enthusiasts are looking for. In the Internet age that's easily remedied by visiting overseas sites. But the important question is whether rugby is winning new fans Stateside.

Meanwhile, BusinessWeek last month ran a piece sizing up the tournament's commercial sponsorship. It serves to remind that not all audiences are created equal.

Credit-card group Visa International is one of six companies that have shelled out $6.5 million apiece to become top corporate sponsors. Another half-dozen, including Toshiba (6502.T) and Heineken (HEIN.AS), are paying more than $3 million each for second-tier sponsorships. Their backing stands in sharp contrast to the recent meltdown in corporate support for cycling teams (BusinessWeek, 6/7/07) embroiled in doping investigations.

Related: Do-it-yourself media takes root

World Cup semifinals feature big-market teams

What a difference a week makes.

Last Monday, the World Cup was expecting the semifinals to include all three SANZAR teams, but no Six Nations representatives. Then England upset Australia and tournament favorite New Zealand once more stumbled against the French.

The surprising turn of events undoubtedly delighted the tournament's business managers.

The final four not only features the rejuvenated hosts against their biggest rival -- happily located just across the Channel -- but also boasts three 'big market' teams. England, France, and South Africa are far more sizable countries than Australia, New Zealand, and Fiji, and conveniently the Africans are in the same time zone as western Europe.

The main reason world rugby would like the United States to succeed also is commercial. Their game is more valuable if it can gain a foothold in our sports market.

Hopes for Japan are much the same, but the IRB's motivation for helping the other 'Tier 2' countries is rather different. Canada, Fiji, Romania, Samoa, and Tonga are seen as having more of a rugby legacy.

Argentina once would have been classified in this group, and indeed considered joining the old Pacific Rim. Now the question is whether the Six Nations or the Tri Series is a better fit.

So far as playing rugby goes, it is interesting to note that the Eagles turned in credible performances against three of the semifinalists over the past four years.

In 2004, the Eagles led the Tricolors at half in Hartford, and pressured the Six Nations champs all the way in a 39-31 loss. The following year, Glasgow (now Saracens) wing Francisco Leonelli slipped by fullback Francois Viljoen to score an injury-time try, giving the Pumas a 34-30 Churchill Cup win. Of course, the 2007 World Cup has seen a close match with England and a lopsided result against South Africa.

Such results will now be watched more closely by the IRB and, thankfully, our own management too.

Puma success warrants another look at amateurism, Argentine director says

World Cup quarterfinalist Argentina is better off as an amateur country, according to English international-turned-Union Argentina de Rugby director of rugby Les Cusworth.

“I have changed my opinion significantly over the last two years,” Cusworth said in an interview with the BBC. “Especially if you look at the problems Welsh and Scottish rugby has gone through.”

“We have a base other countries would die for and our future, while amateur, is a lot brighter than many nations,” Cusworth said.

It’s been assumed that American rugby must launch a professional competition as a precursor to improving internationally. In recent years, no country has climbed the rankings more than fourth-placed Argentina, favored to advance past Scotland this weekend and reach the semifinals for the first time.

Most of the Puma World Cup squad competes professionally in Europe. But before they move abroad, the Argentines develop and refine their skills in an amateur environment, and generally it’s the case that athletes from outside the Commonwealth or European Union have to be better than ‘domestic’ players because of passport restrictions.

(As an aside, many Pumas have college degrees – relatively uncommon among European or Antipodean professionals – and two are even medical doctors.)

Also for the first time, none of the so-called home unions (England, Ireland, Scotland, and Wales) may gain the World Cup semifinals. Cusworth suggests, with an obvious degree of self-serving rhetoric, it’s because these countries have ignored the recreational clubs and competitions where would-be internationals get started. “Lots of amateur clubs have gone because of professionalism. To get an elite, you need a wide base," he said.

In an interview earlier this summer, Belmont Shore coach Jonny Cox suggested Australia’s club model as worthy of America’s review. Australia's professional realm is rather smaller, and its club structure more pronounced, than most of its 'Tier 1' rivals.

Two years ago, former USA Rugby manager Dan Lyle tabled eligibility regulations that would have encouraged America’s senior clubs to resume overall growth, rather than focusing on national championships and the semi-professional requirements of the Super League. The main proposals died in a Board of Directors committee.

Thanks Dave for emailing the story.

On executive accountability

reporter's notebook Elsewhere, Fraser Neill stepped down as New South Wales chief executive. What cares American rugby?

To begin, Neill essentially funded the Sevens World Series, and was keen on America's participating right from inception. The USA 7s is now our best asset (even if in private hands). Also from his IRB post, he was an effective manager of the Pacific Rim tournament's expansion, and later the 2003 World Cup.

So Neill was a friend to the USA. Was he a good manager?

In Australia's rugby heartland, the Sydney Morning-Herald credited Neill with ‘with guiding the union through its transition back to independent control following its administration under the Australian Rugby Union after it went bankrupt.’ Planning for the new Australian natioanal championship was executed on his watch, a bruising process, and revenues fell off disastrously this year on the back of a historically poor Waratahs season.

And so Fraser is out. Contrast this with USA Rugby’s passive acceptance of past chief executive Doug Arnot's paucity of technical initiatives, three massive operating losses and subsequent fire sale of the USA 7s and 7s jersey for $150,000, three consecutive annual losses, and a unprecedented dues hike borne primarily by youth and college students. Only when senior staff leaders made the record plainly obvious was Arnot fired.

Soon it will be Nigel Melville's turn to be evaluated on vision and performance. Like Neill, Melville is a rugby man, and the genial circumspection which he has demonstrated to date will have earned him credit.

One-third of Maple Leaf World Cup side based at home

More than one-third of Canada’s World Cup side is based at home, which runs counter to the view that the Can-Am rivalry is ‘professionals against amateurs.’

Seven pro players didn’t make the Maple Leaf squad, eRugbyNews concluded in an analysis of the 32 players (subscription required), further suggesting that one’s training regime is at least as important as ‘full time’ status. European competition helps but is not solely determinant of North American athletes' skill and achievement.

Like the USA, Canada does not have a professionalized domestic competition. The Canadian union does draw upon government subsidies for elite athletes (so-called carded players), and benefits from Commonwealth ties which circumvent European Union restrictions on work permits for would-be American professionals.

But Rugby Canada has enjoyed government subsidies for more than a decade, and has always had more players in Europe. In other words, the ‘pros vs joes’ rationale wouldn’t seem to explain why the once-close rivalry, which stood at 4-6 since the 1999 World Cup with 3 of the 6 losses by less than a try, has suddenly degenerated into consecutive 50-point shellackings, the highest margins of defeat in the 30-year series.

The US and Canada are joint partners in the North American 4 competition, which is meant to be a cut above the two countries’ domestic competitions. But while Canada has been forward-looking in evaluating and fast-tracking players not yet in its national squad, USA Rugby has treated the cross-border tournament as a kind of extended trials assembly, even swapping players among the two sides, such that it is hardly comparable to the supposedly inferior Super League.

America has far more rugby-playing universities than Canada, with state-of-the-art facilities popping up in numerous locations. Accordingly, more than 60 percent (16 of 26) of the 2005 Churchill Cup side had earned Collegiate All-American honors, though the total and percentage has dropped to less than 25 percent (8 of 36) for the World Cup training squad to muster this Saturday.

Welcome "Yanks Across"

An interesting new site called Yanks Across has begun chronicling the fortunes of Americans in British and Irish rugby.

The site today today marks its one-month “anniversary” with a portrait 1958 Heisman Trophy winner and Oxford University “Blue” Pete Dawkins. One anecdote:

"I'd never played rugger before and I did all sorts of things that are just not done," [Dawkins said].
Those things included shouting encouragement to his teammates during a match. During that era, the team captain was the only person expected to speak on the field and all other chatter was discouraged.

It’s well known that Dawkins “invented” the modern lineout throw by introducing the overhand spiral pass, but remarkable to learn that the one-time Army football star (and hockey vice captain, and baseball letter winner) inadvertently helped bring better on-field communication to the game.

A more typical entry:

Ex-University of Oklahoma star and USA Eagle Tyson Meek has been loaned to Derby RFC.
Derby competes in the Midlands Two East Division in the English Leagues. They currently reside in second place, two points behind league leaders Loughborough University.
Meek has been named to the replacements bench for Derby's Saturday match against Kettering.

A sense of context – understanding the game’s universal spirit and also the meaning of distinct local characteristics – is important for those who would understand the wide world of rugby beyond one’s doorstep. Yanks Across appears to be equally conversant in both the "home unions" and the American games.

Law changes gathering steam?

A panel of international worthies, including World Cup-winning coach Rod MacQueen and IRB referee manager “Paddy” O’Brien, carries on evaluating “experimental law variations” designed to promote the contest for possession and continuity of play while reducing penalties at the breakdown.

According to the IRB’s winter 2007 edition of Total Rugby (page 11):

The critically important areas of the breakdown which are being rigidly enforced by the match officials are:
•  players entering through the gate, which has been found to be very beneficial in ensuring that players do not come in from the side and therefore spoil well won ball
•  offside, where defenders are in front of the last man on their side of the breakdown
•  players on the ground preventing playing of the ball

Key to enforcement is increased authority for “flag judges” (formerly touch judges).

Other interesting changes are repositioning the offside line at scrummage five meters behind the hindmost foot and reducing many penalties to free kicks. Offside, foul play, and not entering breakdowns “through the gate” remain grave offenses.

The law variations have been trialed at South Africa’s Stellenbosch University, and will next be deployed in Scotland’s senior club competiton, according to Total Rugby. New Zealand, Australia, France, England, and Ireland will also put them into play this year.

Any such changes must be sanctioned by the IRB council if they are to become standard rules of the game. There is virtually no chance of any revisions before September’s World Cup. The USA does not have a vote on the council.

Uruguay waits for North American runnerup

Uruguay downed Chile 43-15 yesterday in Montevideo, earning the Teros second place in South America’s World Cup qualifying tournament and the right to play the loser of August 12’s Canada-USA matchup.

The hosts led 25-3 at half, en route to a five-tries-to-two victory, RugbyRugby reported.

Uruguay and the North American runnerup are tentatively scheduled to play a home-and-away series in September, with the winner claiming the Americas 3 seed in pool A, which features defending champion England, South Africa, and Samoa along with a repechage qualifier.

The victor in next month's St. John, Newfoundland, contest goes directly in pool C, with Australia, Wales, and Fiji.