User:Mvest/The Global Expansion of Rugby Union
The presentation can be found at this link.
In a constantly changing global market where sports must compete against each other to promote and develop their 'brand' across the globe, the International Rugby Board utilises a number of different methods to do so. These methods involve initiatives that relate closely to both business and politics on both a global and local scale.
The International Rugby Board (IRB)’s mission to expand rugby union globally encompasses the funding and development of the sport worldwide. The IRB strives to achieve its goals of promoting rugby union worldwide while competing in a constantly changing global market. It does so through a number of strategies such as the staging of the Rugby World Cup tournament, providing financial support to rugby playing 'minnow' nations and getting Rugby Sevens involved in the Olympic Games. Finally, the IRB has a Strategic Plan in place to serve as an outline for the IRB’s core objectives leading into the future. Each of these involves a relationship with both business; on a local and national scale, and politics; either within rugby, inter-sport politics or government politics.
Rugby World Cup
The IRB’s showcase international tournament, the Rugby World Cup generates the vast majority of the Board’s income. This income is generated through the surplus funds of the tournament’s ticket sales, broadcasting rights, merchandising and sponsorship deals. Throughout Rugby World Cup history, each tournament has seen a vast increase in total surplus funds – giving the IRB the means to fund the game globally. From comparatively small figures of $M17.6GBP ($M27.2AUD) surplus generated by the 1995 Rugby World Cup in South Africa, the tournament’s surplus skyrocketed to a massive $M122.4GBP ($M189.3AUD) in the 2007 tournament held in France. Despite these massive gains, the IRB faced a dilemma in granting New Zealand the rights to host the 2011 tournament; because of its dependence on the World Cup for revenue, the board must elect host nations based on the financial viability of the bid, because of its responsibility to continue to fund and develop rugby union globally. There is evidence to suggest that rugby union is continuing to gain support globally. The number of viewers worldwide for the 2007 tournament in France exploded to 4.2 billion people watching from more than 200 countries, an increase of over 800 million people from 193 countries on the highly successful 2003 tournament in Australia. The growth in revenue is expected to continue into the future, with the 2015 World Cup in England expected to be the most profitable tournament in history. The tournament is not only the main source of funding for the IRB, it is also the main event for world class rugby union to be on display to a demanding and constantly changing global market. It is a significant opportunity for the IRB to garner interest in the sport worldwide by ‘advertising their product’ to potentially interested investors and other nations who may be interested in introducing the game into their national sporting system. The Rugby World Cup presents an excellent, high quality brand of rugby that no other tournament in the sport can compare to, which provides the IRB with its main selling point for potential customers. While the tournament is an enormous financial asset to the IRB, it is also an opportunity for potential host nations to place a bid for hosting rights. The incentive for governments to host the Rugby World Cup extends from the tourism boost that comes with hosting the tournament, to the great amounts exposure the tournament brings to such countries. The boost in tourism in turn has a positive impact upon the economy of the host nation, as tourists tend to purchase souvenirs and other merchandise while in foreign countries. Tourism also provides a significant financial boost on a local scale as small businesses can benefit from the boost in tourist numbers. Estimates put the total figure injected into the French economy during and in the weeks after the 2007 Rugby World Cup at around $M163GBP ($M252.8AUD) after deducting the outgoing costs of TV rights fees, sponsorship deals and ticket transactions.
Along with the privilege of playing host to a major sporting event, the economic benefits provide excellent incentive for countries to bid to host the Rugby World Cup.
Funding & Development
The IRB has a vision ‘...to grow the Game in developed and emerging Rugby markets around the world over the next 10 years and we have a tremendous opportunity to do so with three Rugby World Cups and two Olympic Games within the period.’ This vision encompasses the IRB’s goal of developing and exposing the sport of rugby union to a bigger global audience. It is a product of the IRB’s desire to make their ‘product’ as marketable and exciting as possible, a core factor in achieving financial goals in the modern world. The Strategic Investment Programme is one of the IRB’s main initiatives in funding the development of rugby union. Its aim is to assist Tier 2 and 3 nations financially to help such countries be more competitive against the higher ranked Tier 1 nations. The Programme is the basis for major projects in improving the standards of lower ranked rugby-playing nations; for example the High Performance Centre that was established in Samoa, towards which the IRB contributed over $M1 GBP ($M1.5 AUD). In accordance with the Programme the IRB plans to spend over $M2.2 GBP ($M3.4 to fund the Samoan Rugby Union’s High Performance Programme from 2009 – 2012. This funding will assist the country of Samoa in developing quality rugby players at a grass-roots level as well as strengthening the performance of their national teams. Another minnow nation that has flourished with the assistance of the IRB’s Strategic Investment Programme is Georgia; from two High Performance Centres opening in the country to winning the European Nations Cup title to qualify for the 2011 Rugby World Cup, the improvement of the standard of rugby union in Georgia is evident. The nation’s recent success is proof that the continued involvement of the IRB in funding minnow nations’ rugby union developments has been highly successful. The heightened sense of interest in rugby union was highlighted in Georgia when it became recognised as the country’s national sport. This underlines the fact that rugby union is continuing to evolve as is its fan base, with more and more countries expressing an interest in becoming Member Unions of the IRB. The rise of Argentina in recent years is a testament to the IRB’s willingness and desire to help all Member Unions succeed. The continued improvement of the standard of rugby in Argentina was underlined when the Pumas made their first ever World Cup semi-final appearance. Along with extra funding of $M10 AUD to help the country retain their status as a Tier 1 rugby nation, the Board has granted Argentina entry into the Tri Nations tournament usually contested by heavyweights Australia, New Zealand and South Africa. From 2012, the tournament will feature Argentina’s Pumas in a revamped four team competition. This will expose Argentina to much more top level rugby and help to develop interest and participation in the country. In turn it may also have a positive effect in the rest of the Americas, particularly in South America where there is currently very little interest in rugby union.
Rugby Sevens in the Olympic Games
The decision made by the International Olympic Committee (IOC) in 2009 to include Rugby Sevens in both the 2016 and 2020 instalments of the Olympic Games was a massive boost in terms of advertising the game of rugby union. The Committee was very supportive of the IRB’s pitch to have Rugby Sevens established as an Olympic event, with 81 out of a total 90 members voting in favour of welcoming the sport into the Games. As the Olympic Games is the premier sporting event in the world; with over 200 countries participating in the Games and millions of viewers worldwide, the exposure that Rugby Sevens will generate for the sport is immense. It will also provide many nations with an opportunity to experience Olympic glory and in doing so could help to establish rugby union as a major sport in countries dominated by other sports.
Sport is increasingly becoming more of a lucrative business than simply a pastime or hobby. In recent years this has led to major world sports such as soccer, cricket and rugby union into competing against each other in an effort to increase participation and revenue on both a local and global scale. Competition between sports is one of the main features of sport in the modern world. In the professional era of sport there is a constant necessity to improve the ‘product’ to provide a better spectacle for the fans. This is where the fast-paced, entertaining version of rugby union known as Rugby Sevens excels. The shorter format of the game allows for plenty of excitement while meeting the needs of today’s on-the-go spectators. It is a sport that is perfectly suited to the Olympic Games and will undoubtedly generate a large amount of interest in both formats of the game.
In 2007 the IRB implemented its Strategic Plan, one of its most significant political and financial initiatives. The Plan consisted of the Board’s ideas for bolstering development of the game in established rugby-playing nations as well as its ideas for expansion across the globe. The Plan was developed in conjunction with the IRB Member Unions, who worked closely with the Board to ensure that the matters addressed were relevant and met the needs of all those involved or affected by it. The Plan identified key areas in achieving its goals, and outlined the requirements for it to succeed. One of these areas was the necessity that the IRB find ways of increasing the profitability of its assets, including tournaments and broadcasting deals through the use of effective marketing. Maximising profit is a huge factor in any business in the modern world, and is at the heart of the IRB’s Strategic Plan. The profits gained through tournaments, sponsorship and broadcasting deals allow the IRB to continue to support and fund rugby union at all levels of the sport. Another of the goals outlined in the Plan was to increase the number of people – both men and women, participating or getting involved in rugby union. The specific numbers the IRB set out to achieve in the Plan were to have over 6 million players worldwide, with over 400,000 women participating in the game. This was to be achieved by developing programmes which encouraged participation in rugby union, having rugby union taught in IRB Member Union schools and the general promotion of rugby union as an exciting worldwide sport.
The strategies that the IRB employs in helping the game of rugby union to prosper and grow around the world have a great impact upon the game on a local and international level. Each of these strategies involves some degree of business and politics, and are important in helping the Board achieve success in the modern world of sports. These strategies are the driving force behind the IRB’s ongoing mission to make rugby union a truly global sport.
- Rugby World Cup Limited, Financing the Global Game, viewed September 13 2011 http://www.irb.com/mm/document/newsmedia/0/090904webfinancingtheglobalgame_8964.pdf
- Delloite & Touche LLP, Potentional Economic Impact of the Rugby World Cup on a Host Nation, viewed 16 September 2011 http://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/UK_SBG_IRB2008.pdf
- International Rugby Board, Year in Review 2010, 2010, viewed 16 October 2011 http://www.irb.com/mm/document/newsmedia/mediazone/02/04/21/65/2042165_pdf.pdf
- Federation of Oceania Rugby Unions, Ground-breaking Work To Begin on Samoa High Performance Centre, 2010, viewed 18 September 2011 http://www.oceaniarugby.com/101213_ground-breaking_work_to_begin_on_samoa_high.html/ref/267
- International Rugby Board, Year in Review 2010, 2010, p. 15, viewed 17 October 2011 http://www.irb.com/mm/document/newsmedia/mediazone/02/04/21/65/2042165_pdf.pdf
- International Rugby Board, Year in Review 2010, 2010, p. 15, viewed 16 October 2011 http://www.irb.com/mm/document/newsmedia/mediazone/02/04/21/65/2042165_pdf.pdf
- CNN, IOC adds rugby sevens and golf to 2016 Olympics, 2009, viewed 24 October 2011 http://edition.cnn.com/2009/SPORT/10/09/olympics.golf.rugby.ioc/index.html
- International Rugby Board, Strategic Plan 2010-2020, viewed October 9 2011 http://www.irb.com/mm/document/aboutirb/irborganisation/02/04/18/08/2041808_pdf.pdf