RFU predict RWC windfall
July 16, 2009
The Rugby Football Union are hoping to bring the Webb Ellis Cup back to England in 2015 © IRB
The Rugby Football Union is confident it can deliver a £300million boost to the game if awarded the right to host the 2015 Rugby World Cup.
England's bid to host the sport's showpiece event received the significant backing of Rugby World Cup Limited (RWCL) last month but still face competition from rivals South Africa, who were angered by the RFU's nomination and are lobbying hard before the International Rugby Board (IRB) Council make the final decision on July 28 in Dublin.
The RWCL recommendations were based on a 71-page analysis into all the bids compiled by consultants Deloittes, sports marketing giant IMG and leading law firm Clifford Chance.
The 2011 Rugby World Cup in New Zealand is reportedly heading for a substantial operating loss, while moving the tournament to a new rugby market in 2019 - Japan have received the support of RWCL - would also test the IRB's marketing potential. To ease fears, the RFU are confident they can deliver a vital windfall for the IRB who earn 98% of their income from the tournament.
A successful tournament in England is expected to generate at least £300million for the IRB. On top of the £80million tournament fee, the "mature" UK market would attract a further £220million in commercial returns from broadcasting, sponsorship and merchandising - which is understood to be around 20% more than the RFU's nearest rival and 50% greater than France 2007.
The European television rights are yet to be sold for the 2011 tournament in New Zealand, where breakfast kick-off times are a turn-off for broadcasters and sponsors. The detailed bid analysis, which has been circulated to all council members, indicated that adding an England World Cup in 2015 into the package would maximise the IRB's rights income.
England's rival bidders South Africa were angered by the RWCL decision to back the RFU and asked the IRB for a number of "clarifications". One of South Africa's chief complaints was that they managed to secure government support totalling £130million - £50million more than the tournament fee - compared to the £25million that Westminster has made available to the RFU.
However, it is understood the South African bid is budgeted to make an operating loss of £28million, with that additional government money designed to make up for the shortfall.
In contrast, the RWCL bid analysis shows the RFU would produce a surplus - ticket revenues minus the £80million guarantee and operating costs - at least double that of any other bidding nation. The RFU bid includes the highest number of available tickets (2.8million) at the second-lowest average price.
South Africa have vowed to keep lobbying in the hope of persuading at least 15 of the 28 IRB council members to overturn the RWCL recommendations. In reality it is 15 of 26, because the RFU's two council members are permitted to vote for themselves.
The RFU have not forgotten their heavy defeat in the race to host the 2007 World Cup - a failed campaign which cost them in the region of £650,000 - and Twickenham delegates are also hard on the campaign trail.
In related news, the IRB is reportedly unlikely to allow European broadcasters to bid on rights to the 2011 Rugby World Cup until next year with tournament officials waiting to see if economic conditions improve.
British broadcaster ITV have shown every Rugby World Cup since 1991 but the continuing advertising slump and the ITV spending on soccer broadcast rights meant it might be reluctant to bid and could face competition from a joint bid by the BBC and Sky.
Rugby World Cup Ltd (RWCL) announced in April that Sky Television New Zealand would be the host broadcaster for all matches at the 2011 tournament. Sky will provide coverage of all 48 matches, for distribution to the organisers' broadcast partners around the world -- such as ITV or the BBC or Sky in Britain.
Sky will also provide an international broadcast centre in Auckland for other licensed broadcasters to process tournament footage.