Credit crunch bites at IRB
November 26, 2008
IRB Chairman Bernard Lapasset has listened to the pleas of potential RWC bidders and dropped the asking price for the 2015 and 2019 tournaments © Getty Images
The International Rugby Board has cut the cost of hosting Rugby World Cup 2015 and 2019.
The minimum guarantee required to host the 2015 tournament has been reduced from £100m to £80m while any union hoping to host the 2019 event will now need to guarantee a fee of £96m - down from £120m.
The sport's governing body has announced the new fee structure in order to give an added boost to the competitiveness of the tender process. The decision was made to reflect the current economic environment and subsequent feedback from the nine Member Unions who are tendering to host these tournaments.
"The IRB has also agreed to incentivise the Host Unions by building in a profit share formula for any tournament surplus it generates that exceeds the minimum guarantee," International Rugby Board chairman Bernard Lapasset said in a statement.
"We are still looking to achieve a tournament fee of £100 million from 2015 and £120 million from 2019. The revised minimum requirements are just that, minimums. There is nothing to prevent one Union bidding the minimum guarantee of £80 million for RWC 2015 and another bidding £100 million."
"That would lead to a very interesting decision making process next year when the host Unions for Rugby World Cup 2015 and 2019 will be decided in July," added Lapasset who also underlined the economic boost provided by the tournament.
"A recent independent Deloitte report on the economic benefits of hosting Rugby World Cup highlighted the fact that it is one of, if not the most, cost effective major sports events in the world. RWC is estimated to have the potential to generate up to £2.1 billion in economic benefits while capital expenditure costs are among the lowest for an event of this magnitude," he said.
"These economic benefits make the tournament a major attraction to host. Of course an event as large as Rugby World Cup does require a certain level of financial underwriting upfront. We have been in constant touch with the nine tender Unions and have taken on board their comments on the current economic environment they are operating in.
"We have also had meetings with government officials from several of the potential host countries which have been very encouraging. However, in light of the current economic environment the IRB has decided to take a pragmatic approach on the tournament financial modelling to assist Unions in their future discussions with their respective governments and their delivery of competitive tenders."
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