Interesting perspective from Sports Business Newslines regarding sponsorship and the Rugby World Cup currently taking place in New Zealand. Could this be the last World Cup? Most unlikely you would have to say but something will have to be done to address the issues raised by the New Zealand Rugby Union Chief Executive, Steve Tew.
New Zealand Rugby Union (NZRU) chief executive Steve Tew has warned that the country’s participation in future editions of the Rugby World Cup could be under threat unless changes are made to the commercial structure of the tournament.
Tew has outlined that participation at this year’s World Cup has cost the Union NZ$13.2 million (US$10.4 million) due to the International Rugby Board’s (IRB) regulations. Incoming tours are stopped in a World Cup year and competing nations are not allowed to grant presence to their sponsors for the duration of the tournament. The IRB is set to complete a review of how the World Cup is run by May and the NZRU chief has warned that New Zealand’s place at Rugby World Cup 2015 in England could be in jeopardy if the current system remains intact.
“We think we are at a really important juncture,” Tew said, according to The Guardian. “We want a couple of things taken very seriously around the IRB table. One is the money that flows through and out of Rugby World Cup. It is well publicised that the major unions lose a significant amount of money net by participating in the tournament and that makes absolutely no sense. We lose $13.2 million worth of revenue after income from Rugby World Cup and costs are adjusted. It cannot carry on.”
Tew added: “We said at the last board conference that we needed a full review of the IRB’s financial model, Rugby World Cup commercial rules and Rugby World Cup money flows. We are waiting with some anxiety what the IRB are going to do about it. The IRB did put an extra £1 million on the table for the major unions six months ago which helped and which was appreciated, but frankly the prospects of us going to England in 2015 under the current model are very slim. We cannot continue to sign on for an event that costs us so much money.”
Tew highlighted the IRB’s protection of its official sponsors as particularly strict. The regulation is designed to drive maximum revenue from commercial deals, allowing nations outside the top 10 to secure greater funding. The NZRU is not seeking to cut into the smaller countries’ share, but Tew added: “The commercial rules for the tournament for participating unions are, we believe, far too tough, much tougher than FIFA’s.”
Tew continued: “If this was a soccer World Cup, the All Blacks’ hotel would be decked out with our sponsors until Thursday (before a Saturday game). In a Rugby World Cup, our sponsors do not get a look-in. They are very excluded. All we want is what is best for world rugby.” An IRB spokesman said: “We will continue to work with our unions to ensure that the tournament continues to balance the strategic needs of our unions with the global development of the sport.”
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