Go broke or grow: where to now for Australian rugby?
By Remy, 12 Feb 2009 Remy is a Roar Rookie
- Tagged:
- Australian rugby, John ONeill, Rugby Union, Western Force
The cold hard facts suggest that everyone in Australian Rugby seems to be losing money at the moment. Like any business that hemorrhages cash, it can only keep bleeding for so long.
I noticed an article recently that mentioned that New South Wales is likely to post a loss for 2008, and so too is the ARU. I can’t imagine that the ACT or Queensland are likely to startle world share markets with any ‘profit upgrades’ in the next few weeks. And the Force seem to be losing members (and probably money) quicker than Tim Johnston sailed out of Perth in his firepower fuelled private jet.
So, it begs the question. How long can the rot continue?
Before I focus on the big picture and suggest a few solutions, I really can’t resist asking how long the Western Force are likely to survive? Any sporting team that has its membership halved, its crowd reduced and looses sponsors quicker than it recruits them is on a very greasy slope to insolvency.
A quick review of the Force’s website tells you that they have lost 10,000 members in three years and, by my calculation, that’s a loss of income of around $2.5m – $3.0m per annum!
Granted, some of these members will pop up at the odd game, but surely this loss of income is catestrophic?
I notice the Force announced a profit of around $1m for 2007. How are they looking for 2008 and 2009?
Which brings me back to the ‘big picture’.
Sports development and growth is a little like the chicken and egg scenario. It’s really hard to work out which comes first.
In order to get growth, you need to invest in grass roots development. But in order to have the cold hard cash to do this, you need a TV rights deal.
Now don’t jump up and down and disagree on this point – it’s true. Look at basketball and its slow death as a good example.
The AFL produced the perfect model for game development and growth during the last seven or so years. How? By helping Sydney and Brisbane to be successful.
Was this fair?
Well, that’s another question, but the success of Brisbane and Sydney helped the AFL achieve massive TV deals. They took a punt and the chicken hatched a beautiful double yolk.
All credit to the brains behind the AFL.
So, how can the ARU learn from this?
There’s no secret that an expanded TV rights deal is CRUCIAL to the expansion of the game in Australia. The ARU have pretty much exhausted their cash reserves and can only spend so much on development, so its going to take a very strategic push into the unknown to convince broadcasters to write out some bigger cheques.
And what sort of ideas might excite a broadcaster? One thing: big populations that like watching rugby on TV.
Forget Perth.
The ratings of rugby in Perth are appalling and the ARU know this – think Melbourne, West Sydney and Japan. Big markets, big populations and lots of LCD’s in homes.
The ARU must convince their friends in South Africa and New Zealand that an expanded competition to include teams in Japan, Melbourne and/or West Sydney must be established and set up soon.
In addition to this, the season must simply be extended to a 18 round competition with a top eight finals program.
More games, more TV, more money!
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True Tah said | February 12th 2009 @ 7:10am | Report comment
Remy
18K packed into Members Equity to see a trial match recently – whilst memberships may have been reduced, Im amazed they still average over 20K at a shit ground for watching rugby and without making a finals appearance. So maybe its not all doom and gloom in the West. They have had a sponsorship deal fall through – a timely reminder for everybody to do their research before doing business with an unproven business, although the Force were not alone there. They have had problems with player discipline and the coach being a dictator.
Where to now for Australian rugby – well its no secret the Air NZ Cup is bleeding cash from the NZRU, South Africa has got big $$$ and pissed off with us for trying to get a Japanese team in and Australia really needs a longer domestic season with fewer tests – get a team in Melbourne and look at creating a Trans-Tasman comp and dissolve Super Rugby in its current format – for the time being.
Yikes said | February 12th 2009 @ 8:22am | Report comment
Actually, TT, I hear that Members Equity is a rectangular ground, and that part of the disillusionment of the Force fan base is that Subiaco is so very very crap to watch rugby from – hence the good crowd at a real football venue.
The Force might regain a lot of those members if they find themselves a rectangle home.
sheek said | February 12th 2009 @ 9:01am | Report comment
Remy,
I think we’re killing this to death, but as stakeholders, we’re entitled to keep asking questions.
With respect to the problems of the Force – what’s the alternative? Cut our losses & run? I would totally oppose any withdrawal from WA.
I keep pushing a national comp. Why? You need to plant a tree in each separate garden (state) & nurse it to full health. Put the provincial team in the capital city to act like a beacon. Then go out & build your numbers form the ground up (juniors).
And you confirm the strategy arguing how having a footprint in both Sydney & brisbane helped AFL nationally, & with its TV deals. I don’t think it’s rocket science.
I agree with disbanding the Super series in its current format. And providing both Perth & Melbourne (& Adelaide also) with rectangular stadiums will obviously help them. Nor do I think including Japan is the answer.
A Trans-Tasman comp makes sense. Australia has the money & NZ the teams & players. 12 teams, 6 each country, province & capital, as follows:
1. Auckland (NZL), Auckland.
2. ACT (AUS), Canberra
3. Canterbury (NZL), Christchurch.
4. Hawke’s Bay (NZL), Napier.
5. New South Wales (AUS), Sydney.
6. Otago (NZL), Dunedin.
7. Queensland (AUS), Brisbane.
8. South Australia (AUS), Adelaide.
9. Victoria (AUS), Melbourne).
10. Waikato (NZL), Hamilton.
11. Wellington (NZL), Wellington.
12. Western Australia (AUS), Perth.
35 players per franchise. NZL franchises can recruit 5 AUS players, AUS franchises can recruit up to 10 players initially. Pacific Islanders (non NZL/AUS nationals) restricted to 5 per franchise. Obviously, these figures would be reviewed & revised over time (hopefully as Australia especially increases its quality playing numbers).
Pippinu said | February 12th 2009 @ 9:09am | Report comment
Going back to the AFL example, it is worthwhile noting that the then VFL was pretty much broke when it first sent South Melbourne to Sydney in 1982. They slowly got their act together during the rest of that decade, created the national comp, and then grew from strength to strength from the early 90s onwards.
So competitions can definitely turn things around, but there are key differences between the two contexts (by the way, this is not to suggest that RU is in as bad a state as the VFL was back in the early 80s, that’s for the experts to determine, I honestly wouldn’t know something like that):
1. The VFL only had to worry about Australia, and it only had to worry about domestic issues. These were a chanllenge in their own right (recalcitrance of South Australia for example) – but they had a bit more control over their destiny than perhaps the ARU does.
2. Following on from the last point, the Super 14s are a strength (high quality competion, international profile, etc) but the involvement of other unions does slow down the capacity to plan strategically and to pursue quick wins – very difficult to make quick changes (whereas the AFL is quite adept at change).
3. Related to both points – any problems that do exist in Australia, are generally not shared by the other major rugby playing nations. So every time someone suggests a change that necessarily involves other countries, I have to shake my head and think to myself: why would other countries want to embrace that change – they are not facing the same issues?
Above all else – this last point is the biggest challenge of all, and certainly a far bigger challenge than anything the then VFL faced in the early 80s.
True Tah said | February 12th 2009 @ 9:10am | Report comment
Sheek
I like your thinking re: Trans-Tasman comp, Im going to send some correspondence to the ARU and NZRU to seriously consider this. I would put a team in Western Sydney before Adelaide though, Sydney/NSW is simply too big for one team, even if the Brumbies have captured the South…the last think we would want is the Reds and their useless management taking everything north of Sydney too!!
I too oppose any withdrawal from WA, the Force have achieved a lot over there, even by playing out of Subiaco, not winning much and plagued by off-field issues.
sheek said | February 12th 2009 @ 10:29am | Report comment
True Tah,
I understand the argument about Western Sydney, but it’s simply not practical to have teams everywhere you would like to. I agree Sydney is capable of two provincial teams, but not until after SA is up & running.
But I like the provincial concept of one team/one city/one region. This allows that Province to harness all the players, fans, sponsors, media, etc into the one entity, all with the same purpose in mind (hopefully) – success for that Province.
Western Sydney would still be represented by Parramatta, Penrith & West Harbour in the Sydney Premier Rugby.
Meanwhile, we need to get the game flourishing in Adelaide, the country’s 5th largest city. Just 15 years ago, Adelaide was our 3rd largest city, since overtaken by Brisbane & Perth.
The game’s been in Australia since the mid-1860s, while a comp was started in Adelaide in the mid-1930s. It’s disgraceful that 70-75 years later, the game in SA has hardly gone anywhere.
For the game of rugby union to flourish in Australia, we need to reach into every corner of the country (with player participation). IMHO, that’s an imperative.
Pip,
I agree. I made the Trans-Tasman suggestion in the spirit of co-operation, although it’s never been my first or second preferred option. But you have to have an open mind about (most) things.
Sooner rather than later SA & NZ are going to wake up to the fact that OZ has been getting a free ride (in a manner of speaking) at their expense re the S14. Perhaps for the moment it suits their own purposes. But as soon as they no longer need our input – financial or otherwise – they’ll cut us adrift.
And what is the ARU’s contingency plan? Japan?
I don’t have a problem with developing Japan. But we can’t even develop our own backyard at the moment. And that ought to be our priority.
Remy said | February 12th 2009 @ 10:32am | Report comment
True tah, thanks for the feedback and I agree with your comments on the Aust/ NZ style competition. However, I feel this simply would work with TV broadcasters. Why? Again, its population and the potential to sell pay-tv. A ‘super’ competition must exist and include teams in large cities with potential for big revenue. Whilst its not completely pallatable to the purist, its pure economics. And in the world of finance, its all about the bottom line.
In relation to Members Equity, its actually an Aussie Rules Stadium with a few temporary stands on the east and southern side. Whilst this creates the right rugby setting, the standard of facilities is very sub standard. Its amazing that a state like WA, with all its perceived wealth and cowboys, cant build a few decent stadiums?
I doubt the Force will be moved, though there is no doubt they are facing a financial crisis like never seen in Australian rugby before. The ARU needs to assist and I’m sure they will. Some on field results and some off-field maturity would probably help the Force too.
Sheek, I like the idea but I have mixed feelings about a few of those teams. Again it comes back to the level of exposure and ‘uptake’ of the game in each city. Is Foxtel really going to sell that many subscriptions in Adelaide from die hard rugby fans? I think not. Japan looks far more exciting. And, frankly, I really do think we need SA teams involved. In fact I think its crucial.
Pippinu, thanks for the feedback. The AFL have the advantage of being the national sport but are also constrained by their ability to grow.
Whilst some may see this as an advantage, the international flavour of rugby poses a risk to rugby in Australia. Cashed up European teams could easily strip our best players and I’d hate to see the Super competition reduced to something that resembles the ‘A-League’.
Which is part of my point.
By growing our game and expanding the Super competition we’re also potentially safeguarding our players from being lured to Europe. If there are truly big bucks to be spent in Japan, why not invite them to join the club? And even better, they can have two teams if they can bring Sony and Samsung (as sponsors) along.
True Tah said | February 12th 2009 @ 11:03am | Report comment
Remy
I really disagree that the SA are essential – quite frankly they are what is holding Super rugby back – say you follow the Tahs or whatever Australian team and they are winning and you like watching them on TV – then they go to South Africa for a few games and effectively disappear into a black hole – sure you can follow them on the Net and even watch reruns later on, but the momentum of watching your team is gone.
Its not so much a problem for NZ because they are in a better time zone than SA.
If we need to SA teams, we may well have a Heineken style tournament with teams from South Africa, Japan, Aust/NZ and maybe Argentina. I feel if Argentina got a decent pro comp going then it wouldnt be too long until they’re competitive, as their club competition seems bloody strong, definitely stronger than Sydney club rugby…sadly there is a chance the Japs could be the whipping boys, unless they stocked the side full of Kiwis and Islanders. This comp would not be the bedrock of domestic comp.
Have the Kiwis ever realised that by giving Australia a free ride, they are reducing their chances of ever winning the WC…in 1999, if there was no super rugby, Australia would not have won the WC, in 2003, no super rugby, and it would have been an England-NZ final…are the NZRU that stupid, or are they that starved for cash they are willing to sacrifice their chances of winning a World Cup?
LeftArmSpinner said | February 12th 2009 @ 11:05am | Report comment
remy, I think that your initial premise is not sufficiently grounded in fact to use as a basis for the article. Sure things are tight, but no surprises there. Further, and in the same vein, AFL is a local sport and should not be held out as the beacon foe every one to follow.
20 Years ago, the Japanese economy was held to be the greatest. That myth exploded.
Sports like rugby are driven by the success of the team, be it Tahs, Force or Wallabies. It has been a fallow few years and it is remarkable that things are not worse. In such times, competent senior management is critical. JON and his team are the best in the business. Rugby is in good hands. AUs and NZ seem to be getting on and hopefully SA will get together on things such as the extended finals series in years to come. Watch Rugby continue to expand into the vacuum that is being left by the NRL. Super rugby will become a seies of local derbies in sutiable grounds, and with strong tribal support. Just look at the crowds that the derbies get now. NSW V QLD.These games have appeal because they are local and because the players know that it is an informal Wallabies trial, man on man. The International component will then follow as a finals series.
So relax, it is all okay. The future is secure as long as a No9 bus doenst take out JON!!!!!
pothale said | February 12th 2009 @ 11:14am | Report comment
Am curious about this debate, although I will say first off, it is not something I’m familiar with living on the other side of the globe. Why is the automatic assumption to grow the game, mean more teams?
Australia is a big country, diverse, and with discrete population bases. Different sports are popular in different regions/cities. Why not focus primarily on the areas that like rugby union and support it? Would reducing and concentrating the teams be a possible option to counter the slowdown in financials? A smaller amount of teams would potentially provide greater resources and salary inducements for players.
Ireland and Wales – albeit much smaller countries and playing populations – went the provincial route, and concentrated its players into a small number of provincial teams. Even for those, getting good gates for their weekly matches can be difficult. Munster and Leinster probably fare better than most.
You say that grass roots development is needed to enable growth. However, you haven’t identified – in this article – why numbers are falling, why gates and membership are down, and sponsors are leaving (though the answer to the latter is more obvious). Are some of the teams not good enough? Is a relatively small amount of talented players spread too thinly across too many teams? Is lack of success in S14 beginning to disenchant fans?
Trans-Tasmaan comp may be the way to go since SA have said they would be interested in joining up with 6N as the time zones and travel are easier. Bringing in another country – such as Japan – could be very risky from a geographic and language point of view. It has a drawback, however, in that it isolates the two countries further. Unless, of course, there was value in getting Fiji, Samoa, etc involved as well – maybe initially as a PI team but with the ability to develop separate teams if growth and development happens over time. And that’s an essential ingredient – time. Difficult to put a value on that, or persuade a sponsor to back it.
Are there international examples that Australia could usefully study and adapt for their own purposes?