The Wrap: Is Super Rugby dead? Don’t bet on it just yet

In the aftermath of the ARU’s decision to ‘discontinue’ the Western Force from Super Rugby, and Andrew Forrest’s promise to establish an Indo-Pacific rugby competition while also supporting the NRC, concerns have been raised.

Many people have been quick to extrapolate this into a new landscape for professional rugby that, after expiry of SANZAAR’s current broadcast deal in 2021, will not include Super Rugby.

I wouldn’t be so hasty to write off Super Rugby just yet.

From Australia’s perspective, in recent years Super Rugby has proved increasingly problematic. Suffocating competition from other sports that are staunchly domestic, financial cost and chronic lack of success have all fed into a landscape for Super Rugby that is overwhelmingly negative for Australian fans.

In that context, the emergence of Forrest – and the prospect of him working constructively with the ARU – is seen as a ray of light in a very dark tunnel.

The very nature of professional sport implies that success is tied to money and, in the EPL, La Liga, NBA, Major League Baseball, F1, pro cycling – a fair chunk of the world’s major professional sports competitions – there is undeniable correlation between spending and success. Thus it is because Forrest has money, (which the ARU doesn’t), that there are bubbles of excitement and raised expectations.

Optimistic fans, however, are potentially letting what they wish for get ahead of the realities that actually inform decision-making in rugby in the SANZAAR region. This comment is made without any scepticism towards Forrest himself.

I have no way of knowing what is true motives are, the level of financial investment he is prepared to make and for how long, but there is nothing to suggest that he is anything other than genuine, and that his involvement in rugby is anything but good for the game.

But in all of the excitement, there are two things being glossed over. The first is being drawn into a ‘fool’s gold’ scenario of relying on one solution to fix two separate problems; i.e. the state of Australian domestic rugby, and achieving a solution for regional rugby that is more fan-friendly and engaging. These are entirely separate matters.

The second, more important point, is that irrespective of Forrest’s involvement, even if his IPAC competition gets off the ground, decisions about the game in our region are made by the national unions of South Africa, New Zealand, Australia and Argentina, as a collective, via SANZAAR.

Be assured that the important strategic decisions that are made are only those that will benefit the partners. And in an era where these southern hemisphere nations are increasingly seeing their best talent picked off by northern hemisphere clubs, this invariably means decisions only that will protect or potentially grow the revenue base of each member nation.

(Photo by Daniel Carson/Getty Images)

The proposed IPAC competition might be sustainable if Andrew Forrest bankrolls the whole competition, making up any shortfall in broadcast revenue not achieved, meeting the enormous costs involved with rugby in the Pacific Islands and maintaining salaries at competitive levels.

A very rough estimate might place this investment at around $150m initially, then $100m annually. Is this the intended scope of Forrest’s intended involvement?

If so, it seems a long way from his initial objective of providing West Australian players a pathway into top-level rugby. Hence the growing expectation that, once the IPAC is underway, and with Super Rugby so unpopular, a joining together of the two competitions will provide a neat solution.

But even if Forrest is encouraged to extend his involvement into helping underwrite or assist Australian rugby over the next few years, are we to believe this now extends to all of Asia, the Pacific and New Zealand?

The New Zealand Rugby Union has worked very hard to establish income streams that enable it to be fairly self-sufficient. But their position remains tenuous because, just like Australia, their primary revenue source remains SANZAAR broadcast revenue.

Despite the problems with Super Rugby and the failings of Australia and South Africa, New Zealand still has too many eggs in the SANZAAR basket to let it fail or to leave its future in the hands of a businessman from Western Australia that it knows little about.

South Africa too remains a crucially important player. The widespread assumption that the expiry of the current SANZAAR broadcast deal will see them shift allegiance to the northern hemisphere is unsubstantiated.

Once again, what might look good on a whiteboard, or make sense to fans over a few pints, is not the basis on which traditionally conservative rugby governing bodies, desperate to maintain their financial viability, make business decisions.

SARU CEO Jurie Roux has made it clear that South Africa has no intention of withdrawing from either SANZAAR or Super Rugby. The reasons for that are obvious; the northern hemisphere unions and club competitions cannot easily accommodate such a large, wholesale move, and it is not automatically in SARU’s best financial interest to do so.

Instead, the SARU is in the process of trying to establish firm footing in both camps; the Cheetahs and Kings in the Pro 14, another two newly constructed sides entering the knock-out Anglo-Welsh competition, and the Lions, Sharks, Stormers and Bulls – the four strongest sides – remaining in Super Rugby.

Roux, along with the New Zealand Rugby Union’s Steve Tew, clearly sees the best outcome for the SANZAAR nations to be to shore up the Super Rugby competition, to make it as attractive to broadcasters and fans as it can be, so as to extract maximum value from the next round of broadcasting rights negotiations; discussions which are scheduled to begin next year.

(Photo by Gallo Images/Getty Images)

It is no more or less this factor that drove the decision to revert to 15 Super Rugby teams, and the construct of a new fixture, announced last week, that provides for more home derby games in Australia, and the remarkably low number of four ‘graveyard shift’ matches for Australian teams in South Africa.

It is interesting to note too how early clashes between Australian and New Zealand franchises have been avoided – another subtle move to try to prevent starting the competition off in another cloud of ‘here we go again’ negativity. Incredibly, Australian and New Zealand franchises don’t meet for the first time in a round until Round 7 – no accident.

It is not that tinkering of this nature suddenly fixes all of Super Rugby’s ills – there are still imbalances and inequities in the draw. The Jaguares and Sunwolves remain problematic, and perhaps too much damage to the brand has already been done.

But the SANZAAR unions will feel that this will at least provide them with a fighting chance. As Tew told me recently when we met in Wellington, despite all of the negative sentiment towards SANZAAR and Super Rugby, it was SANZAAR who provided the four semi-finalists for the most recent World Cup – proof that they can’t be doing everything as poorly as what some might make out.

It is not a revelation to say that New Zealand takes its rugby seriously. And to point out that the New Zealand Rugby Union takes its responsibility to safeguard and maintain New Zealand’s presence in the game extremely seriously.

That objective is achieved primarily through the revenue it obtains from broadcasting rights, and provision of a suitable product with which to provide broadcasters. In that respect, New Zealand offers schools rugby (low value), Mitre 10 Cup (low value) and the All Blacks (very high value, but limited by the number of matches/opportunities).

Somewhere in the middle sits Super Rugby: moderate to high value, offering around 20 weeks of regular content across a number of different markets. While the value of the respective component parts isn’t split out in the overall SANZAAR broadcast deal (which is worth approximately $50m per year each to New Zealand, Australia and South Africa), it is undoubtedly a substantial piece.

The notion that the New Zealand Rugby Union would turn away from this in favour of joining an almost certainly inferior Indo-Pacific championship, full of countries who have little ability to generate revenue but great capacity to add cost, is laughable. Ditto the idea that New Zealand rugby’s future lies in a solely trans-Tasman league.

The emergence of new media into the sports broadcast space – companies like Amazon, Facebook, Google, Apple and others – appears to have come at an opportune time. The New Zealand Rugby Union’s recently announced partnership with Amazon potentially opens up a raft of revenue possibilities for the future.

Most importantly, however, Sky TV’s whole business model in New Zealand is so reliant on sport – rugby in particular – that they will almost certainly fight hard to retain the rights. In South Africa, the retention of the four leading franchises in Super Rugby will also help ensure that the rights value is not diminished.

(AP Photo/Mark Baker)

While fans might continue to groan about Super Rugby they shouldn’t forget that the primary factor which determines the value of broadcast rights for sport is not the content itself (and much of it remains excellent by the way), but the motivation and degree of competition from bidders in a contestable situation.

With that in mind, while Super Rugby may indeed have a terminal slow puncture, to borrow an old phrase, its death appears to have been greatly exaggerated.

To finish this week, I note the efforts of NRC referee Will Houston, who was either slyly swigging Kava from his water bottle or was enjoying the play of the Fijian Drua so much that he let the first half of their match against the Perth Spirit run for just over 45 minutes.

Or perhaps the conspiracy theorists will have us believe that, considering the pasting the Drua were giving the Spirit, Houston was under instruction from the ARU to continue to make life difficult for the WA boys.

To reference another old saying – when faced with a choice between conspiracy or stuff-up, go for the stuff-up, every time!