The International Rugby Board could not have fully anticipated the ramifications of the decision they made on 26th August 1995 to make the game of rugby union 'open'. In making the game professional they set in motion a series of changes that are now starting to increase in velocity. With professionalism comes investment, with investment comes the need for a return and with the need for a return comes a yielding of the unmitigated commitment to the playing side of the game. Rugby is now about winning and making a profit; the two compete for supremacy and swing between being bedfellows and being totally incompatible. Welsh regional rugby has showcased this swinging pendulum with the Ospreys’ Galacticos period gradually replaced by a restrictive salary cap for the 2012/13 season for all Welsh regions. The emergence of the aggressive financial behaviour has, in the case of both the Aviva Premiership and football’s Barclays Premier League, taken around a decade. Now, clubs from both sports are making commercially-driven decisions that are harmonising and polarising the opinions of fans in equal measure: take Newcastle United’s renaming of their 120-year-old St. James Park stadium as the Sports Direct Arena or Saracens’ aborted relocation of their crucial Heineken Cup game against Biarritz, that fans had paid for in their season ticket packages, to Cape Town, South Africa as examples...
 |
| (Source: The Ball is Round) |
What’s happening in football?
In football, clubs have been commercially aggressive on a global scale for a few years. The catalysts for this behaviour, amongst many, have been the astronomical sums paid to the clubs for TV revenues and the competition from other European leagues for an intercontinental supporter base who are marketed to ferociously to try and persuade them to buy a particular club’s shirt or watch their games on pay-per-view TV.
With each season comes another encroachment on the sport’s traditions. We have seen these commercial actions develop from the subtle sponsoring of corporate boxes or stands to the aforementioned multi-million pound sponsorship package for the naming rights of a stadium. This particular example is fast becoming a requisite for any Premier League club who wants to get close to competing for honours. We also see the very name of a team given over to sponsors (Airbus UK Broughton, Red Bull Salzburg, Supersport United), Wembley’s advertising hoardings displaying Japanese adverts (see the FA’s recently adopted ‘digital replacement advertising’), the disingenuous signing of East Asian players by top clubs (Dong Fangzhuo to Manchester United) and pre-season tours of America that mirror an Armed Forces recruitment drive (Chelsea).
What are the pressures on rugby?
In rugby, similar pressures are beginning to be applied, albeit on a smaller scale. In rugby it is more about survival. English and Welsh clubs will soon both operate with a financial handicap compared to some of their European rivals and so face an ever-increasing challenge to match them on the field.
Several English clubs are located in areas where they are forever in the shadow of a football team (Sale with Manchester United and Manchester City, Newcastle Falcons with Newcastle United) and this means that it is predominantly those outside of the catchment of a football club (Gloucester, Bath, Northampton) that can rely on solid revenue from ticket sales. Leicester Tigers are the exception.
With average Aviva Premiership attendances falling from around 13,000 per game, clubs are becoming more and more reliant on other sources of income to support their playing and commercial aspirations. In Leicester’s most recent annual accounts around 30% of their total income was attributed to their international hospitality arm, conferencing and events and hospitality; the same amount as that provided by ticket sales to actually watch the team play. The influence of the commercial side of the clubs is cumulative; as one club makes a bold move in ‘the market’, so the others are forced to react to keep apace. ITV1’s broadcasting of a national television advert for Leicester Tigers may well provoke similar reactions from other clubs.
 |
| (Source: leicestertigers.com) |
The Heineken Cup has been a huge success story for the commercialisation of rugby, but it could soon become the elephant in the room. The quality of the rugby can reach test match levels and the competitiveness with only 8 qualifiers from 6 pools is ferocious; Leicester’s recent double header against Clermont Auvergne is testament to that. The trouble is that it has been so successful on the field that the clubs involved have become desperate to ‘sweat the asset’ and gain even greater revenues. Clubs competing in football’s UEFA Champions League have gone through a similar experience and that once great competition has been watered down significantly to give the big clubs opportunity to maximise their revenues.
What’s happened so far?
Rugby is seeing some of the commercial developments that have happened in football become more prominent. They have already had clubs adopting a sponsor’s name (NEC Harlequins, Benetton Treviso, Coca Cola West Red Sparks), matches moved into neutral venues (The Big Game series) and, in a pioneering move that exceeds football, even a domestic cup game in Abu Dhabi (Wasps v Harlequins). In November of last year, Executive Chairman Peter Tom said that it was, “Only a matter of time,” before Tigers play a meaningful game abroad. Leicester fans will have noticed the club becoming much more prominent in providing an ‘entertainment package’ on match-days that supplements the on-field action.
Isn't it a good thing?
As with football’s Premier League, there are huge positives that can be gleaned from this commercialisation. As more money pours into the sport from other avenues the clubs can attract better players in the Premiership, Sky and ESPN show us 50% of the fixtures live on TV every weekend and the global audience grows. Next season’s marquee player rule will bring another wave of exciting international stars to the league. Is the addition of one luminary per club designed to make them more competitive on the field? Probably not, when Toulouse and Toulon add 3 or 4 more each year. What it does is give each club a beacon by which their commercial activities can be led. If next season’s Harlequins v Saracens game at Twickenham were to be marketed around the battle between Richie McCaw and David Pocock then maybe they could break the attendance record all over again.
So what's to lose?
Rugby is a game based on the foundations of its years as an amateur sport, but those traditions and stereotypical views of the ‘rugby player’ will start to dissipate as they move more and more towards their new status as elite professional athletes. With more matches broadcast live on TV and Premier Rugby’s new service showing full match replays for every Premiership game just 3 hours after its conclusion, there is a risk that attendances will fall. For clubs like Saracens, Sale and Wasps, this adds even more uncertainty to their search for a new stadium.
The definition of rich and poor clubs is more complicated with a salary cap, but, in the Aviva Premiership, the divide between the two is becoming more evident. At opposite ends of the spectrum are the relatively stable clubs financially (Leicester, Northampton, Gloucester, Bath) and those who cannot, with their current circumstances, hope to compete with them (Newcastle, Wasps, Worcester). Then there are the clubs that are risking heavy investment now in the hope of sustained success in the future (Saracens, Exeter). Though money flows evenly from the RFU, the richer clubs are able to capitalise on it more effectively. A boost in cash flow at Leicester may allow them to add Julian Salvi to the squad as injury dispensation; at Wasps, it may just keep them afloat for a little longer.
What might happen in the future?
The big question is: what might happen in the future? If the big rugby clubs competing in the Heineken Cup can put on a memorable display and get high attendances and Sky can draw significant viewing figures from it, then the next logical question commercially will be: why don’t we do more of this? Why compete in a league with the likes of Newcastle Falcons, with their 135 years of history but 4,500 average attendance when you could be playing the likes of Toulouse, Leinster and Northampton every week? We have seen already with the largely unsuccessful ditching of the Powergen Cup for the EDF Energy Cup that revenue-generating competitions will eventually take precedence over tradition. Saracens' announcement this week that they will play Fijian champions Nadroga Stallians in the UAE next month must surely challenge the future of the LV= Cup as they will probably view that trip as far more commercially valuable than another LV= Cup fixture with under 5,000 fans in attendance.
 |
| (Source: The Telegraph) |
Middle-Eastern investors are rumoured to be considering a bid to purchase London Wasps from current owner Steve Hayes and so if rugby as a ‘package’ starts to become more viable as an investment then we should expect to see more takeovers. This influx of new money may, over time, upset the traditional balance of the club game. Leicester have built their success sustainably over many years but a Rugby Lions club backed by businessman Michael Aland could well announce itself in the Aviva Premiership in a few years time and ruffle feathers by acquiring big-name players.
The Barclays Premier League is set to go to the market with the rights for the broadcasting of its games this year and the list of potential bidders has evolved to now include Apple, Google and al-Jazeera. New interactive viewing platforms are also opening up for rugby, such as Premier Rugby TV and the Sky Sports Event Centre. The increase in competition between broadcasters may mean fans have to subscribe to even more pay-per-view channels in the future but the viewing experience will undoubtedly be enhanced.
There are few areas of the game yet to be coated by corporate sponsorship’s wide brush but this will still be a fear for some fans. If Leicester cannot secure all of the investment they need to continue their expansion of Welford Road then one option has to be selling the naming rights to the stadium. Fans already sit in the Caterpillar Stand, the Goldsmiths Stand or the Holland & Barrett Stand, but would they find it palatable to have a comfier seat in the John Lewis Leicester Arena?
No comments:
Post a Comment