In just a few days the 2014 Super Rugby season kicks off as the South African conference gets underway, with last season’s surprise packets the Cheetahs facing this season’s newcomers, the Lions.
Meanwhile, the Australian conference kicks off on February 22 with a crunch clash between the Reds and Brumbies in Canberra, with the New Zealand conference also starting that day.
But with the arrival of a new season in the Southern Hemisphere there is worry within Australian club rugby about the state of the game – most notably when it comes to finances.
In terms of 2013 the Australian Rugby Union gained $100 million in revenue for the year but merely received a turnover of $10 million.
That is despite the Lions tour which, although ending in defeat for the Wallabies, was a success financially with travelling Lions fans generating an estimated $150 million for the Australian economy.
Current chief executive of the ARU Bill Pulver does not hide the fact that their financial situation “would have been very precarious” were it not for the Lions tour.
Moreover, at the provincial level the five franchises that make up Australia’s contingent within Super Rugby aren’t doing well financially. Of the five franchises, only the Reds posted a profit last year.
The other four Australian teams are haemorrhaging money, though the Brumbies’ surprise and heroic run to the final has left them better off than the other three Australian franchises.
Melbourne Rebels have struggled despite funding from the ARU since their founding in 2010, while the Western Force have lost their main sponsor Emirates leaving up to a $1 million hole in their budget.
The Waratahs’ poor attendances are hurting them financially, as is losing HSBC as their main sponsor. Waratahs chief executive Jason Allen said the impact of losing HSBC’s sponsorship has led them to be “50 percent worse off” than they were this time last year.
Adding to the gloom Bill Pulver has admitted 2014 could be tough and this season’s Super Rugby season will run at a financial loss.
So just why are the ARU in such financial strife?
“Poor results plus poor rugby by both the Wallabies and Australian Super Rugby teams hasn’t helped,” journalist John Davidson explains. “The Force and Rebels have been poor for years while the Waratahs have under performed. The only teams to have done well in recent years are the Reds and Brumbies.
“But sport is a very competitive market in Australia with rugby union struggling, particularly with the rise of the A-League. Player salaries are high with many Wallabies overpaid. Rugby needs to grow its fan-base, better engage with them and better market its game.”
Davidson is certainly right when it comes to the salaries of players. Quade Cooper’s deal with the ARU, which reportedly runs out at the end of this year, is worth $800,000 per season.
The ARU noted just how high the salaries are and acted upon it in October. As part of the Collective Bargaining Agreement (to last 10 years) between the ARU, the rugby union Players’ Association and the five Australian Super Rugby franchises, the Wallabies Test match payments given to centrally contracted players is cut for the next two years from $13,100 to $10,000 per Test match.
But in a difficult environment where rugby union is competing with a multitude of sports in Australia, the game has found it difficult to fend off other competitions like the NRL, A-League and AFL.
Davidson lays the reasons why that is the case in a social but also geographical context.
“Rugby remains a private school, middle to upper class game, mainly restricted to New South Wales and Queensland,” he says. “Both the NRL and AFL have grown massively in the past few years, gaining bumper TV deals.
“Regarding the A-League it is starting to grow, heading towards an upward curve, backed by soccer being the biggest participation of sport in the country. Worryingly from the four codes mentioned above it is rugby union that is smallest of those codes.”
The TV deals for the three codes battling rugby union are extensive. The NRL in August 2012 announced a five-year TV deal with free-to-air broadcaster Channel Nine and pay subscription channel Fox Sports worth $1.025 billion dollars.
For the AFL, their five-year TV deal announced in 2011 goes even higher – worth $1.253 billion and lasts until the 2016 season– and represents a 24 percent increase from its previous deal. The broadcasters are a mix of subscription-based channels (Foxtel) and free-to-air networks (Seven) along with digital content provider Telstra.
The A-League pales in comparison with the AFL and NRL television rights deal, but its four-year deal lasting until 2016 is worth $160 million and includes games broadcast primarily on Foxtel but also shown on free-to-air television (SBS) for the first time.
Super Rugby’s five-year TV deal lasts until the end of the 2015 season and when it was negotiated with the SANZAR nations of South Africa, New Zealand and Australia is worth $437 million overall.
Super Rugby in Australia is exclusively shown on Fox Sports – more of a hindrance than a positive. When the new TV rights are up for negotiation come 2015, the outcome is vital for Australian rugby.
“The ARU needs an increase from what it currently receives and also has to find a way to get Super Rugby on free-to-air television,” Davidson says. “That is a must, even if it is just one game per week. Being just on pay TV restricts the audience massively.”
When comparing with the AFL, NRL and A-League it is likelier for the average sports fan to watch a sport being broadcast live on free-to-air TV than a sport solely exclusive to pay TV. At least Bill Pulver has recognised this, leading him to harbour hopes that one day Super Rugby games involving at least the Australian franchises will be on free-to-air television.
One small respite for the ARU is the possible expansion of Super Rugby in 2016 to Argentina, opening up the market to the Americas.
Asia has been mooted as a possible route of expansion but it is more likely an Argentine team will be admitted, plus a seventh South African franchise – probably the Southern Kings.
Though an Argentine team in Super Rugby could prove to be a logistical challenge in itself, the value of the new Super Rugby TV deal when up for negotiation in 2015 can increase when factoring in Argentina.
Ever since Argentina entered the Rugby Championship in 2012 their revenue has skyrocketed making profits of 100 million pesos ($14.1 million) in two years. It’s an impressive result for a country whose game is amateur, only now trying to move to professionalism while using the amateur game as a means to finding and developing young talent.
Added to that, several sponsors such as Renault, Nike, Samsung, Dove, Deloitte and Visa (the latter being their shirt sponsor) have signed deals with the Pumas merely increasing their revenue.
UAR board member and legendary scrum half Agustin Pichot has indicated that an Argentine Super Rugby franchise would be 51 percent funded by the UAR and the rest by private investors.
That means income will be generated via sponsorship deals at an increasing rate, boosting the coffers of the UAR.
It is a far cry from Australia where Bill Pulver has recently implemented a levy of $200 on every club team in Australia, including junior clubs, in a bid to stop the game going broke.
This move by Pulver has been lambasted, leading to many rugby clubs in New South Wales refusing to pay the levy.
Former Wallaby coach John Connolly aired his disapproval for the levy: “If you compromise the development of your juniors at some point you will pay for it.”
In its attempt to improve the country’s depth of players and unearth young talent, the ARU has launched the National Rugby Championship. Kicking off in August, it is Australia’s version of New Zealand’s ITM Cup and South Africa’s Currie Cup.
Pulver has pointed to the fact it is Fox Sports and Foxtel that will cover the costs of the competition via a two-year sponsorship deal, shielding it from any potential losses.
The ARU hope to generate some sort of profit from this (or at the very least no financial losses) but also improve the level of depth within Australian rugby.
But will it work? Davidson highlights one problem and that is where the NRC is being broadcast.
“I hope it will be a success but doubt it will be,” he says. “Its predecessor, the ARC in 2007, was a huge failure.”
Davidson’s assessment of the ARC being a huge failure is an understatement. The Australian Rugby Championship was scrapped after one year after the ARU made a $5 million loss on it.
It did not help that they had to pay the ABC just to broadcast the event, which is never a good sign of a competition’s prospects.
But if the NRC doesn’t work and just deepens the financial woes of the ARU, could the ARU be forced to bin one of its Super Rugby teams in the future to cut costs?
“I wouldn’t be surprised if they do,” comes Davidson’s telling response.
Cutting costs in an attempt to ease the financial problems plaguing Australian rugby at the moment seems a short-term measure.
To solve the financial malaise in the game, an inquiry needs to set out permanent measures to improve the financial situation in Australia for good. That way the game in Australia can take steps forward to safeguard the future of the game.
Only time will tell if this will happen. If not there will be genuine fears for the code.
michael gardiner
Guest
it is not popular because the game will not give up its elitist image and refuses to change negative boring rules, RU has always criticised rugby league and AFL as inferior sports,and that people should follow the game played in heaven and follow the game which is played in Australia's' most elitist schools and should follow the game because it is played in more countries, this is arrogance , not only is RU boring it can't shake off that elitist ( I am better than you ) image, ( maybe many people like it ) that is why it is unpopular and that is why it will die. Unless RU admits that RL and AFL are exciting great fast games superior to RU and that RU is slow , negative and boring and that RU could learn a great deal from them, unless it admits these things, it will die.
michael gardiner
Guest
it might be fun to play but many people I know while watching RU ask, what is more exciting, waiting for a bus or watching this game?
Mike
Guest
Meh. The ARU knows what the solutions are. They have been discussed on the Roar many times. And the ARU might even start implementing them now. But whatever it does, should have been started 5-6 years ago.
Sharminator
Roar Rookie
Argentina are never going to hold their players to central contracts, or "prohibit" them from playing in Europe if they want to play for the Pumas. They simply dont have the financial muscle to do so, and the article about Pichot dosnt say this anyway. I live in South America and this has never been mentioned by anyone as a serious possibility. An Argentina Super team also will not be the same as a test side, it will be like the Pampas XV, who played in the Vodacom Cup and who this year are playing in the Pacific Cup. Even with revenue from a Super side, Argentina will not be able to pay the salaries European clubs can offer, or the have the best coaching or training facillities, so the best Argentinian players will probably always go to Europe. Generally Argentina players get signed to european clubs from the Under 20 team, or after they make the Pumas, and for them it is a good step to help them develop into better players, rather than staying at home. Argentina currently have their a national championship played between provinces, as well as a national club championship (currently only played by the best non-Buenos Aires clubs), and the URBA championship of Buenos Aires (which a few years ago banned Pampas XV players from playing as they were profesisonal). What they really need to do is not just contract the best 40 players, which happens already anyway with the Pampas XV program, and will happen with a super rugby team, but develop at least a semi professional provincial championship. At the moment the national provincial championship is tacked on to the end of the season (it used to be at the start) for 4 to 6 weeks. Instead they need a national championship where regions can sign players (at the moment players play for the region they play in or the region they developed in) and which lasts at least a couple of months. Chile and Uruguay could also be included. URBA wont like this but it is the only way to deepen the elite player pool which is necessary to be competative.
Kezablonde
Guest
I would like to add that, (as somebody mentioned) RL have most of the talent. I would like to see if there was a way Australian RU could work with the RL in a way that would benefit both codes. The very fact that they were co-operating as allies would lift both codes' kudos. If this happened loyalty would strengthen toward both codes. It is ironic that the RL would give anything for RU's international profile while domestically it is the opposite case.
John Davidson
Roar Guru
Not an oracle, that's for sure.
Kezablonde
Guest
I grew up on Rugby League but saw the light once I grew up. Please dont say that RU is boring - fact is it is superior than RL. Every game of RU is different - every game of RL is the same. Get the ball for six tackles, try to make break; if not, kick in-goal on the 5th tackle in an attempt to retain possession from the dropout. WEAK! I've seen the same game a thousand times. Admitted the players are skilful - but it is airhead kinda stuff (believe me). And its a blatant money-making club venture with players swapping loyaties constantly. There is tension before and during a big international RU match. There is no tension before a RL international - 'cause you know who's going to win 95% of the time. And there is no battle for ball control in RL - you just wait your turn for the ball. There are no great enemies in RL either, because England rolled-over years ago and NZ are colonials. The biggest problem with RU are the bougeois - agreed; along with greedy bourgois Colleges that play it - who take but dont give back. I find most people who dont like RU simply dont understand it - for if they did they would know it a better product. Most people dont really understand cricket either but thanks to free to air, and inovation via KP, it is much loved.
Nobrain
Guest
Do notbeleive everything that AP saids, he is always saying things for his own benefit or personal interests. The good young guns in Argentina will still play abroad since money is a secondary issue for most of them, they value the experience of being in a different country for some time more than the money. But you will find out some of the players that have played in Europe, most from Top 14, and not taken into consideration any longer by their teams because they are in RCH which is played when the top 14 and Aviva is arlready underway. the UAR should put its money into paying the salary of 30 to 40 players distributed in the SR teams, an agreement that they do not count as foreingners shoud have to be made, and that should be the platform for having a competitive SR team in Argentina in the future. In the mean time I think that the capeonato Argentino is a good idea as you mention. The UAR also should finance coaches to spend sometime abroad learning tecnics, strategy, physical preparetion as well as psycological, and then take them back to Argentina Piadars that are being set up around the country. Marketing SR should start asap, for example having 2014 final in Argentina will slowly build the flavor and taste of the competition. Another idea is an incentive for local newspapers ,paper and digital, to follow the competition with good and extensive coverage. Television of matches is a must if you want some type of local hype about SR. With two to three yaers of these, and many more actions, you will have the terrain ready for Argentina to have a competive franchaise.
SAVAGE
Guest
How about forwards competing at the breakdown like they're supposed to? Did you not watch the Crusaders last year in their quater final against the Reds? Or the Sth Africans vs Wallabies at Suncorp? Like ABF said, you don't have to have the ball to dictate terms in a game of rugby.
In Brief
Guest
So get rid of two professional teams, as a way of encouraging more players? That's crazy. The participation numbers are higher now than ever. Aren't you excited to see guys like Kyle Godwin, a WA product, having the opportunity to play professional rugby in his home state? Let's not forget that the Western Spirit had the highest crowds during the ARC - there is a real passion for rugby in these states, and growing player numbers. Why kill this momentum? I much prefer the current system then the old days watching mad dog Waugh and private eye Crowley wrestling in the mud for 80 minutes.
In Brief
Guest
Oops, sorry John ;)
Lomax
Guest
yes agree with you on 7's. if i was Pulver the expansion of super rugby and 7's would be my top priorities. you go outside your market ad create new markets. its only the over crowded sporting market in australia which is the problem. after you expand super rugby and 7's then you promote the grass roots with new cash.
Rugger
Guest
Randwick Dave your view are so outlandish and backward its not funny. What do you think broadcasters pay for in mass entertainment sports - content and to do that you need more games not less. Super Rugby does not have enough content with 5 teams to compete against 18 AFL, 16 NRL team. Lomax is spot on we need to grow rugby in Asia/Pacific to get more money. Pulver talks about model not being right meaning over-reliance on Wallabies. Therefore bottom of the pyramid needs to grow - starting with Super Rugby, NRC and Junior Gold Cup and levels below that. Only issue to my mind that ARU is missing is Rugby 7s which offers single biggest growth opportunity to Rugby since rapid growth period since professionalism. Case in point NRL is jumping on 9s bad-wagon when ARU should have covered capital cities of Australia and New Zealand not to mention Asia with club-based 7s series (yes, not country-based, which is covered by IRB 7s series). All ARU had to do was get private sector involved.
Lomax
Guest
Super rugby needs to split into conferences with a final series. Add a team each from Argentina, Nth America. Add a Japanese team or 2, add a HK team. Add 1or 2 Pacific Island teams. Sponsorship and exposure would be huge and you would be reaching markets with literally a 1 billion people. Its a no brainer. Australia and the Wallabies would no longer struggle financially and you could pump the excess cash into grassroots rugby. Yes no money in the Pacific Islands but has huge fan appeal and adds variety to the comp. Japan and Asia are where the marketing and money making opportunities are. 20million people cant sustain 4 winter sports in Australia. Something will give unless expansion occurs. Soccer has been aggressive and we need to fight back.
a
Guest
The title of this article is "The financial malaise plaguing AUSSIE rugby"
Tigranes
Guest
Isn't the old saying the scots have short arms and long pockets...
Magic Sponge
Guest
Me too Will
Thunderguts
Guest
Randwick Dave, good gutsy comments. We should learn from past failures and look forward with a lot more foresight than the current ARU is doing. Pulver has specific skills which are more appropriate to an ARU which is bursting with cash and fan support. The ARU needs a CE who really knows the game and can relate to grass root supporters and is not afraid to make tough decisions for the future well being of the game we all love.
Thunderguts
Guest
30mm guess what, I am fortunate to live on the Sunshine coast and a proud supporter of the Noosa Dolphins, Noosa 7,s and all things Rugby. Rugby rules are no more complicated than say American Football which after going to several games with a die hard NFL fan I now really enjoy because you know the impact of specific rules. I don't believe the rules of Rugby get in the way of non rugby people supporting the game it is more a question of creating greater awareness of the game and that is what the ARU should be focused on. as they say "Build the game and the people will come"
Thunderguts
Guest
30mm, understand the point you are making but 7,s is such a different game to 15,s and most of the 7's players do not play 15,s. 7's appeals to a very different audience because of the quick turnaround and all the marketing hoopla. The women supporters go mad when the AB win because they get to see the bare chested Haka [doesn't do much for me] and that with Fijian celebrations etc is what makes 7,s a real opportunity As a Rugby purist I love the 15,s game but for entertainment and demonstration of athletic skills 7,s is a great game. Having had a close association with the Noosa 7,s and seen the flow on benefits for the local community I will be very dissapointed if the ARU don't grasp this opportunity with both hands rather than pursue a money and resource guzzling NPC competition.