Go broke or grow: where to now for Australian rugby?
Roar Rookie 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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- Explore:
- Australian rugby, John ONeill, Rugby Union, Western Force
February 12th 2009 @ 11:18am
Lazza said | February 12th 2009 @ 11:18am | Report comment
“the success of Brisbane and Sydney helped the AFL achieve massive TV deals”
That’s not entirely correct. TV ratings in NSW and QLD are still very weak and the only AFL games that can get any kind of audience are the local teams. Tha’t why the AFL is or was trying to get two new franchises up there. Without significant ratings in 55% of the Australian TV market the next deal may not be as lucrative.
Remember the big stand off with Foxtel? Basically they got everything they wanted since there was no-one else the AFL could negotiate with. The current deal with the FTA broadcasters is still very profitable but not nearly as much as they thought after having to make so many concessions to Foxtel.
February 12th 2009 @ 11:56am
Michael C said | February 12th 2009 @ 11:56am | Report comment
Sheek -
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.
I reckon you’re being a bit harsh (on Adelaide in particular)……
Might I suggest that there are some very good reasons the game hasn’t gone anywhere.
A. the game is entirely in appropriate for southern Australia. The grounds are too dry and hard. That was the main thinking behind folk such as Tom Wills (a Rugby old boy and an advocate for the inclusion of his preferred aspects of the game from the school of Rugby – - – but also cognisent that the full transplant of that game was NOT appropriate).
Sometimes, it just has to be accepted that you can’t swim in the desert – so to speak. Sydney and northern east coast of Australia is a tad bit wetter and more lush. Rugby thrives.
B. the game itself, was NOT that attractive – - many in the Aust Footy states preferred by far their own brand (as did many neutral observors – I refer to published Englishman Richard Twopeny as a quotable source). In Sydney, Aust Footy was on the verge of squeezing Rugby out – - – it seems by many accounts that without the onset of Rugby League, that Rugby was facing decline (and did so anyway, but due to RL).
C. the lack of footballing vacuum. i.e. Australia, esp the Aust Footy states – we amongst the leading football uptake regions in the world. i.e. football as recreation for adults. Rugby was not the prefered version and other forms of contact football became well entrenched.
D. the whole RL/RU divide in Sydney especially.
So, I reckon, don’t go the ‘disgraceful’ path and perhaps aim to berate the administrators of the time. I’d suggest that they never had a hope. Other than to go professional – - – perhaps that’s the basis of your ‘disgraceful’ judgement????
Now – - the modern era, well, perhaps anything is possible. But, I might suggest that climate change, global warming, warmer and drier climates in southern Australia will serve to make either Rugby code all the more unsuitable. If RUgby want’s to seriously expand………it might need to engage in carbon trading.
February 12th 2009 @ 12:09pm
Remy said | February 12th 2009 @ 12:09pm | Report comment
Left arm, I perhaps should have expanded my commentary to include my views on the current ARU administration.
JON and his team have done a great job since last year. He’s cut competitions, costs and shown initiative – and thats the point of my article. JON is also on the record as being very pro about expansion in to Asia and particularly Japan. He’s smart. He knows that Japan offers enormous benefits to rugby in the Southern Hemisphere.
As for the AFL, of course they’re not perfect but they have done a few things well. Smart businessman keep an eye on your competition and learn from them. I’m sure JON has some similar views to Demiettrio.
What concerns me most about the ARU is Queensland. Clearly the ARU has lost the battle in this state over the last decade as AFL has grown and league has been successful there. Its time to rediscover a few more Tim Horans and John Eales’s in Queensland and claw some ground back in this territory. As many a Queenslander has boasted, when Queensland rugby is strong, so too are the Wallabies. Simple, but perhaps true?
My point is, unless super rugby does expand Australian rugby does face some challenges. I guess you agree with this. Now is the time for growth and initiative. Lets hope the ARU can lead the charge – they’ve got the smarts to do it.
Lazza, I can assure you that Brisbane, a few years ago, was getting better AFL TV ratings than Adelaide. This is a fact and you’ll find this printed. These results, in early 2000, helped the AFL achieve their great TV deals at the time.
Potale, you raise some really interesting points. I’m actually opposed to a ‘third tier’ rugby competition in Australia. This blurs the lines between professionals (super rugby) and club rugby and costs far too much. The solution? Let the cities develop their own suburban competitions with grass roots support. The sort of rugby we loved as kids and the sort of clubs we used to identify with. But, of course, grass roots rugby should be rewarded, so I’m all for annual under age national tournaments and the states playing games against each other on a bi-annual basis.
I notice there also appears to be a general disliking for SA teams being in the Super comp. I have mixed feeling about this too, but the cold hard facts are important. Rugby in SA is big, they get massive crowds and big pay tv audiences. This is crucial to a TV deal being done. Having SA teams in the competition would be far more attractive to foxtel than the NZ teams. I know that hurt some to hear this but its a financial based argument. Replacing the SA teams with teams out of the Pacific Islands and Adelaide would decimate the financial rewards from a TV deal.
Make no mistakes about it, a city that packs 30,000 people in to a stadium with 100,000 pay tv subscribers is far more financially lucrative to pay tv owners than a city that gets the odd crowd of 50,000 but struggles to sell pay tv….
Potale, you also raise a good question about other sports as an example for growth, internationally. Soccer (football?) in Europe is a good example. Its massive, has huge support everywhere and is driven by….. you guessed it, pay -tv.
But there is one other important thing that helps European and particularly English soccer – private ownership.
Should Australia embrace private ownership? Should the ARU sell off licenses for $3m – $5m per team, establish a salary cap and other rules? It sounds simple, but I really think its something we need to explore.
What does the Roar think?
Lets just ignore any submissions from the “Melbourne Firepower” team……………
February 12th 2009 @ 12:13pm
Lazza said | February 12th 2009 @ 12:13pm | Report comment
Remy,
Football, Basketball, Tennis, Golf and Motorsports are always going to have their best talent going overseas. The money is one reason but they have to go to play and compete at the highest level and improve.
Rugby, League and Cricket players do it simply for the money. They can play at a high level in this country.
If all the best talent is playing in our small country then it just means there is not a lot of interest out there.
February 12th 2009 @ 12:22pm
Remy said | February 12th 2009 @ 12:22pm | Report comment
Hi Lazza
Good point, but Super rugby is a little different. I believe its the best competition in the world and players going to Europe and Japan are more likely to be motivated by the cash than the opportunity to improve. But of course there are a few exceptions. Though I’m still not sure why Elsom went to Ireland. The opportunity to improve or the cash?
As opposed to Football, Tennis and Basketball where the competitions are on another level overseas.
February 12th 2009 @ 12:35pm
Woody Warambel said | February 12th 2009 @ 12:35pm | Report comment
Remy
The AFL TV Ratings in Brisbane a few years ago may have been better than Adelaide’s. But last year they were coming last in their timeslot & rarely topped 100,000 even for Lion’s games.
February 12th 2009 @ 12:40pm
Lazza said | February 12th 2009 @ 12:40pm | Report comment
Hi Remy,
I’m glad you love your Super Rugby but its people like me you should be trying to get interested. Coming from a Rugby desert like Adelaide I was only exposed to Rugby in the 1980′s. After watching the Wallabies Grand Slam and Campo in particular I became interested.
Since then I have to be honest and say the sport has stagnated a bit. Tri Nations becomes stale after a while and playing NZ all the time just devalues the games. Super 14 with their non-geographic names is just incomprehensible to anyone outside the sport.
I’m sure you can give me all sorts of reason why this can’t happen but I think you should make the most of what you’ve got. A Super 10 every year involving ALL the Rugby nations with their best players would interest me a lot more.
A club based competition similar to Europe as the 2nd tier would be more interesting as well.
February 12th 2009 @ 12:55pm
Westy The Real Rugby Fan said | February 12th 2009 @ 12:55pm | Report comment
The Western Force are in alot better situation than most NRL clubs in Sydney . How long did the Western Reds NRL team last in Western Australia ?
Melbourne will come soon rather than later and then we will finally cover most of the main cities in Australia . Western Force are here to stay and good on them . Some A-League and NRL clubs wish they had 10,000 members on their list .
February 12th 2009 @ 2:52pm
AndyS said | February 12th 2009 @ 2:52pm | Report comment
Just a couple of points:
1. The Force lost Firepower, but replaced them with Volvo. The issues with player sponsorships are, by definition, resolved. The last of the affected players will decide this year what that means to them going forward, but it is not an issue that threatens team viability.
2. I’ll start worrying about Force memberships when they fall below the numbers for the other three Australian franchises. They work elsewhere, I don’t see why it will be different in the West.
3. I think you may need to differentiate between “team” and “rugby”. All of the S14 teams make money – that is why they are capable of funding the amateur game below them. When a union posts a loss, that currently means they have spent more on the grass roots than they made + received from the ARU. Any loss of revenue will be felt at the grassroots level, but the team will survive.
4. Any S14 replacement better therefore make at least as much money. Grassroots development and surburban competitions are all well and good, but they need money from somewhere. If they are self funding through subs and the like, they are a totally separate entity – go nuts, what is stopping anyone from getting on with it now? However, if the expectation is that money will magically appear from somewhere above, then where did the new income come from? As it stands now though, the grassroots can only grow as the professional game grows and the sooner people stop looking at them as opposing concepts, the more likely it is that a solution will be found for the game as a whole.
5. If you want to know what the AFLs big success was, it was this: They managed to convince several separate but individually thriving amateur competitions to combine, creating a single professional entity and relegating the amateur game to feeder competition status. It was a bitter pill for the amateur game, I still remember the recriminations and predictions of disaster, but they are apparently now and “elephant in the room”.
February 12th 2009 @ 2:57pm
Remy said | February 12th 2009 @ 2:57pm | Report comment
Westy, I didnt want to compare rugby teams to other sports but our Super teams are, in the main, in better shape than some league teams. League has its place and I admire their connection to heartland, but I wonder if there are just too many teams these days.
The Force are great and they’ve done a great job. Its not their fault memberships have fallen. I guess the novelty value helped their enormous numbers in years 1 and 2 as well. The Force must stay and I imagine they will.
Hi Lazza, I agree with the points about tri-nations. It is a little tiring. I’d personally like to see 2 Bledisloes a year and 2 teams tour Aust each year for 2/3 tests each. Full strength Welsh and French sides would be great to see here.
As for non-geographical names, I must admit it took me around 6-7 years before I decided to pick up an atlas.