It's simple: Australian rugby needs more money

By Elisha Pearce / Expert

Just days away from the start of Super Rugby – kicking off with a South African-only round this weekend – Bill Pulver has told the press Super Rugby will not make money for Australia this year.

Despite the fact this competition arguably produced its best rugby in years last time round the business model isn’t able to turn that into enough cash to go round.

I’m not quite willing to let Super Rugby go the way of our car-making or food processing industries just yet, so I’ve detailed a few areas that are worth exploring for revenue options.

More teams
This is the most talked-about idea out there and one Pulver mentioned in his discussion with the ABC. He mooted the possibility of an Argentina team and possibly an Asian one (presumably from Japan) joining the competition in the near future.

I won’t go over the for and against of this, there are obviously some people who love this idea and some who are sick of new entrants now. Instead, I’ll direct you to my longer assessment and my conclusion that it is simple math that the people in charge (need) want expansion .

Something I will point out is that Bill Pulver would have been part of the group that met in Sydney last year as I wrote that article and discussed the possibility of adding teams. Then he said this yesterday: “There is talk of new teams with the possibility of a team from Argentina and a team from Asia adding a little more interest.”

Obviously he’s not allowed to straight out say they’re adding teams, but the guy running rugby in one of the three current SANZAR partners dropping that quote just after admitting the product must be improved isn’t insignificant.

Renegotiating the television deal including free-to-air nationally televised games
Ideally Super Rugby should attract a higher dollar value for broadcast rights at the next round of negotiations, as other leagues have done without changing much.

If executed well sporting leagues have the ability to extract higher prices because they are able to offer the most lucrative television content in the market: live, event driven viewing hours.

Every television executive is trying to find the right combination of event TV to build their programming around. Procedurals, regular dramas and long-running series have never been harder to build audiences for.

Sport is one of the few remaining must-see-live corners of the market, along with news, event dramas such as topical biopics and a reducing pool of reality TV franchises.

This is even truer for Fox Sports at this stage as they come out of a summer with a Big Bash League 03-sized hole in their program and ratings. They will be acutely aware of how important a few event television building blocks are. Rugby must exploit that need.

On top of that market reality rugby must force its way into free-to-air television.

I’ve written before how rugby needs to learn from other successful leagues, in that case the A-League’s continued growth and consolidation. Now rugby must also consider the growth for the Big Bash because of its national exposure on Network 10.

Business-people talk about growing the pie. Free-to-air is a massive dose of bi-carb soda waiting to happen to rugby.

The best way to get rugby on free-to-air would be to negotiate a weekly “Game of the week” slot for a broadcaster to start with and get the general public used to seeing either a high-profile or high-importance rugby game on their TV each Friday or Saturday night.

Ideally you’d schedule many of the best Australian conference derbies but might also pitch some of the big New Zealand and SA matches as well, such as Reds versus Chiefs, Waratahs versus Crusaders, Rebels versus Bulls etc.

Launching an online service
In the age of smart TVs, swifter mobile data services, smartphones, tablets and home media centres an app and a streaming service is becoming the norm for a progressive sporting code.

Whether this is developed by Super Rugby, which would help rationalise the cost, or by the ARU it needs to happen.

Launching an app that costs a few dollars for a basic version – say $4 – is a reasonable revenue raising option across three nations. If 500,000 South African, 200,000 Australian and 100,000 New Zealand fans download that you’re looking at over three million in revenue.

That could be achievable depending on what service you offer.

Live scores, tracking player movements, statistics, tipping comps and fantasy rugby could all be included in the basic version. I’d even be tempted to include a live-stream of press conferences after each match for die-hard fans.

In the digital environment providing content for a real but unvoiced demand can be a boon.

I know for a fact that many people on the live blogs here at The Roar are interested in the short chat between captain and sideline commentator directly after matches. There would probably be some demand for seeing the more in-depth press conference as well..

Now, the next step is the real revenue-raiser of the future although more relevant to Australian audiences: a premium option should allow viewers to live-steam all Super Rugby matches and replay previous ones on demand.

The back-end cost the on demand catalogue will cost a fair bit to implement so could come down the track, but the livestream option can be done at a lesser cost initially.

A lot of casual fans I know watch many sports online already, from NBA to EPL and can’t afford the high cost of Foxtel with Fox Sports in Australia. For those people an option at $20 per month for a live stream of all games would be an attractive proposition.

With the ability to either watch games on the go, on tablets or laptops and on smart TVs this is be a way to tap into a casual market.

Stop talking down the new national competition
I found it a little odd to see ex-Wallaby and NSW Waratah’s chairman Nick Farr-Jones voice that he has concerns about the financial viability of the new second-tier competition to the press, “I’m nervous about the affordability of the National Rugby Championship,” Farr-Jones said

It may be that the financial viability of this competition is in question at this stage. It probably is.

But to talk down something that is still in formation stage is a little odd and I can’t see why it would beneficial to do so.

The Waratahs would benefit more from a fully functioning national competition at a professional level than the current club rugby set up.

More people more interested in more rugby more of the time can only be a good thing for the Waratahs in their challenge to engage the wider audience in Super Rugby.

People watching games, paying for tickets, buying jerseys and becoming acquainted with players at the NRC level should funnel upward to tickets, merchandise and player affection at the Waratahs level.

The Crowd Says:

2014-02-15T23:35:04+00:00

Fred

Guest


There is already live streaming via Foxtel Play. Not sure if they structure it around specific sports or a range of channels. Having a super rugby only as a subscription option is a good idea. Personally, I don't see the cost of Fox as that burdensome, but I don't drink or smoke, so that frees up the $25/week.

2014-02-15T23:12:18+00:00

Fred

Guest


Why do you think that the NZRU will get rid of SA to further prop up the ARU's inability to develop it's grassroots? Why would NZ want to dilute it's proven world class domestic development pathways with an unproven, unfunded and as yet unseen Australian domestic comp? Are you suggesting that, like the NRL, Oz will graciously allow NZ to have one team in the NRC? Where is the benefit for NZ in your comment, since you are presuming to tell the NNZRU what to do.

2014-02-14T14:14:26+00:00

RobC

Guest


TV nego to include FTA: yes. Online: yes. Talk-up NRC: yes. Expansion: NO. More teams = more trouble Good ideas, but not critical to revenue base for Aussie Rugby,What is needed are: (i) NSW to do well ala Qld. It is a major market (ii) Find a formula to carve a bigger space in Australia winter sports. Brisbane is a good testbed. Then apply it in Melbourne. Or alternatively someone in Melbourne buys, then moves Brumbies to Melbourne. Or merges with them w/Rebs (and base it in Melbourne). Then the money will come Brumbies are a really fantastic club with a great team, but are wasted in such a tiny market

2014-02-14T08:29:27+00:00

Chivas

Guest


And my argument Biltong is the same as Chan's. Primarily that the SA perspective touted by many is one where SA adds more teams to the competition thereby diluting the overall quality because they don't wish to create another tier. Let us forget Australia for the moment. At the end of the day when we grew up we had very little exposure to one another except for the odd school tour, age group tourneys and internationals. However, with internationals we got to play the top provinces and vice versa. So at some level we were still able to pit ourselves against one another. These days it is all about commercialism. Sadly we have no more tours and the tours which do take place the international sides pick the softest teams they can for warm up; so it is rare to see Auckland, Waikato, Canterbury play against touring teams. In NZ those days are behind us and the landscape around the NPC and Randurly shield gas changed. I actually was AGAINST super rugby when it came out because I saw the demise of rugby as I knew it. There is still a part of me that misses those hedonistic days. But, be that as it may we have Super Rugby and as far as I knew everyone brought into it. But what you push which sticks in my craw somewhat is to ignore how the domestic structures of counties like NZ have adapted to this new commercialisation of the game at no small cost and SA's wants to have it as an extension of their current domestic competition. The argument that SA has a number of political issues and these teams have existed since day dor doesn't wash for me. Many teams in NZ have been around since the beginning of time and been cannibalised by the bigger unions, then been further screwed over with the advent of Super Rugby. Life has finally been breather back into the ITM and the shield matches while not quite as eye catching and tribal as once upon a time is making a come back. SA isn't 6, 7, 8 countries and I don't see why when they can't make the necessary adjustments as NZ has had to do rather than adjust the competition to suit themselves. And yes SA generated the most revenue so they can do what they like is a fair argument as I have previously acknowledged. So have your competition and see who wants to belong on SA's terms. If it was so simple and everyone was in agreement, don't you think it would have happened. Instead we hear all this bleating about how SA are the victims and are forced to dance according to what NZ and Ausrralia want. That is also pathetic. Then when I explain all this, I am told I don't like Soith Africans. It is like wtf?!? SA could work it out without destroying the underlying tenants of SR or all countries should agree to wash their hands of it and start afresh. But I can't see how you can say you are for SR when you have so many caveats. And I am not even entirely against any proposition put up. But it needs to be clear and stable. This continuous adding teams is simply BS. Come up with something, agree the revenue streams, each country reviews what adjustments they need to make then stick with it period. Many aspects of proposals put forward are self-serving (from all sides - JON is a past master). I would like to see a solution which works for all and overall sees the game continue to evolve in the SH. And no, I don't like seeing SA lose their elite to the European competition and if this means adjustments need to take place, I don't think anybody would deny that.

2014-02-14T04:55:14+00:00


Chivaz, I am not AGAINST Super Rugby, and as I have said numerous times before, if we do leave Super Rugby (as many have suggested we do for the benefit of a Trans-Tasman comp) then I would prefer not joining the North.

2014-02-14T01:25:56+00:00

Tony

Guest


FTA is key. Free tix to games is fine for city dwellers, but bush footy is the breeding ground for future growth. I live in a town 600 kms from Sydney where there are hundreds of kids who love footy. But they love the footy they can see - and it's on FTA TV. As such, there's a whole generation of potential rugby players who are being exposed exclusively to league and have no idea about rugby. They're playing junior league, buying NRL merchandise, and idolising NRL players. They hear that Israel Folau and Benji Marshall have switched to rugby and are keen to see how they go - but their parents don't have Foxtel. I hate the thought of watching rugby on FTA with constant ad breaks and am prepared to pay a premium for Foxtel, but in country Australia that puts me in the minority.

2014-02-13T23:25:22+00:00

sheek

Roar Guru


x

2014-02-13T11:10:09+00:00

sheek

Roar Guru


Storm Boy, Please understand this - the Kiwis don't want us tainting their NPC/ANZC. We're grown-ups now. Time to have our own national domestic comp. The NRC, like the ARC, is the right concept. Unfortunately, I can only seeing it burning in flames at present through disastrous structural implementation.

2014-02-13T11:06:04+00:00

sheek

Roar Guru


Rugger, No problems supporting a concept that will work. But so far the NRC (supposed teams) looks like one of those home made man-made model airplanes that falls straight into the water once the guy leaves the jetty. Combined Sydney University/Balmain? Or Randwick & Easts fighting each other to have University NSW as preferred suitor? I would love to know how that will work. Work successfully, that is. And NSW Country & Qld Country? Will these guys be 'globetrotters' playing their home games all over the state, or eventually be forced to find a single home town, like Newcastle & Townsville?

2014-02-13T11:00:29+00:00

sheek

Roar Guru


Well Storm Boy, As Midfielder sarcastically implies, your suggestion has been done to death, not least by me. Australians want to see Australian teams with mostly Australian players belting each other on the sporting pitch, just like AFL, NRL, A-League & dare I say it (at least through the media), Sheffield Shield. It would be boring at first until we built the player depth up, but ultimately, that's what I reckon the sporting fan wants. Playing teams from other countries is what international tests are for. There is a place for super rugby. It's when the minor premiers, or top two, or top four, from each of Australia, New Zealand, South Africa & Argentina come together to find the southern hemisphere provincial rugby champion. But for the most part I reckon Australian fans want to see Australian teams with mostly Australian players belting each other on the sporting pitch.

2014-02-13T05:44:28+00:00

Michael from NZ

Guest


I agree with this comment. Australians love watching there own play each other, which is fine. Living in Brisbane, I would rather see the Reds play a SA/NZ team any day. A lot of the local derby's are just boring low scoring slog fests.

2014-02-13T05:08:34+00:00

Argyle

Roar Guru


Sell me this pen!

2014-02-13T03:50:12+00:00

Die hard

Roar Rookie


Such a pity that the Kiwis first priority is against the SA teams then? Looking at the attendance/viewer stats point to this at least. Given the historical AB/SB rivalry the AB/Wallaby is a distant second. Nearly a third of the Aussie super teams players this year are born in NZ. Where are the local platers? I doubt the Kiwi public would turn on for it and the Oz teams would not fare well enough to encourage viewers here. Australia should be working for the best deal that keeps the comp together, not trying to go anything alone. Without super rugby the game would wither here very quickly. We need to cling to the Kiwis first, we are not in a dominant position here. With Super rugby gone the Force and the Rebels would be gone tomorrow.

2014-02-13T00:51:29+00:00

Brett McKay

Expert


Some Bill Pulver quotes about the finances in this ESPN article, Kane..

2014-02-13T00:43:17+00:00

Dogs Of War

Roar Guru


So if the fans have spoken and are prefer to attend inter conference games more in number, then make the games against other conferences cheaper. So event based pricing. THis way people who may not be able to afford to go, can as the price is better for them.

2014-02-13T00:11:44+00:00

Chivas

Guest


Well if it is so obvious to you Biltong, why hasn't it got traction with the SARU? I personally am not so bothered if SA disappears from the competition if that is what they want to do. I understand your response to Stormboy, but pretty sure this topic has now been done to death hasn't it? I am a little surprised that you think inter country provincial games mean so little to the development of rugby in SA and that it is all about other countries wanting to play the big tough lads from SA. But it is an opinion site and apparently everyone has one. As you say they are still involved and the top 23 players and a coach will be exposed to international rugby plus the age group Rodney's and tours. Apart from that SA for SA's hey. I would have thought being part of a wider rugby playing community might be good for SA as much as it is for others. Clearly I have that wrong. Maybe that is why players playing outside SA is a good thing. Bit more international exposure. But of course with video and stuff these days that should be enough?

2014-02-12T23:52:25+00:00

The High Shot

Roar Pro


I'm a league fan so anything critical I say would merely be fodder for a code war.

2014-02-12T22:45:40+00:00

Old Bugger

Guest


hog I agree it's a diificult situation at the mo' but it is the only game in town. And, I don't think there's any answer to resolve this matter until we see what happens in 2016. I also believe that the ARU is caught between a rock and a hard place. The rock is Sanzar and the hard place is home and how to satisfy both with the ultimate goal being to provide a sustainable product. ARU doesn't have any national rugby competition and is about to kick start the NRC. It has 5 teams in SR which I think, in hindsight, is perhaps a couple of teams too many....it is spreading its current income too far IMO whereas fewer teams would not only be sustainable but definitely stronger on the field. Strength on the field you would hope will then encourage fan support off the field when those teams enjoy successes that have become few and far between. Once broadcasters can see that fan support through attendances shows an upward trend and increasing each year, then I'm sure those guys will be scrambling at ARU's doorstep for broadcasting contracts. Of course, the downside is live broadcasts on pay-TV & FTA can also have a detrimental affect on the game attendance numbers - that's human nature - and those numbers start to decline....while TV numbers start to increase. It's a vicious cycle cos no team enjoys playing in empty stadia. So, where am I going with this - the future of Oz rugby IMO is solely and squarely in the hands of its administrators and its fan support base and I really can't see how you'd want to cut off your nose to spite your face by proposing to dump Sanzar at this present time. Maybe its time for ARU to reconsider its 5-team quota?? Anyway, that's my 5c worth but IMO, Sanzar needs all 3 unions to stay the course through to 2020 ( subject to 2016 negotiations of course) because any other option will probably spell the end of SH rugby and we will all be watching NH rugby on Setanta.

2014-02-12T21:37:00+00:00

Kane

Guest


I played in a tournament in the Gold Coast back in 2007 where they trialed the ELV's one was hans in ruck was allowed. As an openside I had a field day but ultimately it gave the advantage to the defending side and took the skill away from getting turnovers. Several players from each team spoke with Paddy O'Brien and Rod McQueen after the tournament and I expressed my concerns about that rule and they said that was the general concensus.

2014-02-12T21:17:40+00:00

Kane

Guest


As of 31 December 2012 (the last set of ARU financial statements I can get my hands on) the ARU had only $3million in equity a negative working capital (if all their short term debts came calling they couldn't pay) and total assets of only $25million (which is less than half of what the NZRU have in cash lying around). I hear there is a $10million profit this year from the lions tour but with 11 more years till the next major event staged in Australia (the next lions tour to Australia) that is less than Folaus salary each year. Bear in mind that since the last lions tour the ARU also held a RWC. This is particularily important as at the end of the 2002 the ARU had only $2million in equity and then made a $33million profit during 2003 and thus had equity of $35million. My question is where is their next windfall going to come from. With the lions tour just been and no RWC in sight insolvency is quite a possibility.

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