Over the last few months, rugby – careering through its first 25 years as a professional sport – found it had arrived at a crossroads.
On one path, a £500 million bid to acquire a 30 per cent holding in the Six Nations from CVC Capital Partners, which would effectively ring-fence that competition and reaffirm the status and commercial presence of the three major northern hemisphere club leagues.
On the other path, a 12-year £6.1 billion guarantee from leading sports marketing agency Infront Sports and Media, backed by Hong Kong-based parent company Wanda Sports, where ownership of a new Nations Championship would have been retained by the world’s national unions and World Rugby, without any sale of equity in the game.
With World Rugby decreeing the Nations Championship viable only upon unanimous acceptance of all of its member unions, power and responsibility in the decision-making process invariably settled upon Ireland, Scotland and Italy.
It is now apparent that sticking points emerged as to division of the spoils. That these nations have ultimately chosen to feather their own nest should come as no surprise – self-interest is Sports Administration 101, and why should rugby be any different?
It is true that the Six Nations competition – first played in 1882 – is not in need of tinkering with. It is also unremarkable that administrators charged with running rugby in these nations have taken no chances when it comes to securing the future of their constituencies.
The year 2035 might seem like a long way off, and the prospect of Ireland diminishing as a rugby power to the point where they might be relegated from the first division of rugby nations seem ridiculous, but why even risk having that as your legacy?
No matter the justification – and the incongruity that a rent-seeking, geographically blessed Italy, having achieved little in their history by way of rugby outcomes can determine the future of other traditional rugby super powers – two outcomes seem assured.
Firstly, the existing commercial imbalance that exists between the northern hemisphere nations and southern hemisphere nations will now grow even wider.
And secondly, the primacy of international rugby over club rugby will be eroded even further, with the leading club competitions set to reap huge commercial benefit, initially from reinforcement of the status quo, followed by revaluation of its competitions, not to mention an accelerating influx of the southern hemisphere’s best players.
What was a crossroads is now a busy six-lane highway heading north, an attractive, newly-widened arterial route to Japan, and to the south, a dead end.
How the SANZAAR unions react will be fascinating to observe.
Anticipated funding from the World Rugby/Infront deal would have bought them time and also provided them with the financial means to keep their best players at home, and with it, the capacity to maintain the quality and integrity of Super Rugby as a leading rugby competition.
The next TV deal will be crucial to NZ and Australia. (Photo by Cameron Spencer/Getty Images)
With that deal now off the table and a new round of negotiations for broadcasting rights gathering pace, Rugby Australia and NZ Rugby are about to find out exactly how much money they will have at their disposal for the next five years.
As a bargaining chip, they will point to a more competitive and interesting Super Rugby competition in 2019, which has come about because they listened and acted upon the requests made by broadcasters.
But there are many more downwards pressures than they have chips. South African broadcaster Supersport will point to weakening fan interest and no local team with a home final, thus no match to show live in their prime viewing time. Australia’s Fox Sports is going through a cost-cutting and rationalisation process at exactly the wrong time for rugby. And New Zealand, too, is suffering from fan fatigue and general dispirit about the health of the game at the grassroots level.
Increased competition and fragmentation of broadcasting revenue via the emergence of digital and social media channels is a potential blessing, but – here’s the rub – even if SANZAAR were somehow able to collectively negotiate an increase in their funding, the quantum of that funding would pale into insignificance relative to the increasing amounts of money flowing into the game in the UK, France and Japan.
Hopeful fans waiting for UK and French clubs to collapse shouldn’t hold their breath. Clubs continue to be underwritten – either as the vanity projects of wealthy owners or via the conversion of debt to equity – all in the name of attracting the best players and paying them ever-increasing salaries.
And it is, of course, the world’s best players who are the big winners from this battle. Not because of spurious player welfare concerns that were never a real issue, but because we know from other professional sports that the vast majority of wealth generated by those codes ends up in the pockets of players and their managers.
Over the coming years, we will almost certainly see a readjustment in player movement trends.
It’s happening already, but the moment New Zealand and Australia concede to picking their Test sides from all domiciles, the best players will move accordingly into the richest leagues – the English Premiership, France’s Top 14 and parts of the Pro 14 – with corresponding adjustments in the next tier – Pro 14 and Japan’s Top League – with some displaced players shuffling back into whatever is left of professional rugby in Australasia.
Because it is South Africa where the player drain has already reached a tipping point, it is they who will determine SANZAAR’s relevance and future.
They are now in a position whereby they can honour their historic alliance with New Zealand by retaining the Rugby Championship – this relationship is important to both countries – while at the same time, continue to bail from Super Rugby, as many of their fans have done.
South Africa holds the key to SANZAAR’s future. (AAP Image/ David Rowland)
Because of the position in the broadcast cycle, it is reasonable to expect the SANZAAR nations to battle on for the foreseeable future. But almost certainly, they will need to urgently rejig their financial models and re-establish at what level and to what extent rugby in this part of the world can operate professionally.
It was interesting to note a difference in tone by the respective CEOs of New Zealand and Australia, Steve Tew and Raelene Castle, in the reaction to World Rugby’s announcement.
“Disappointed but not surprised,” was Tew’s official reaction, adding that, “SANZAAR would now go back to the broadcasters with their original product offering around the Rugby Championship and Super Rugby.”
Castle meanwhile, said, “While these discussions have been happening at World Rugby level, we have had a Rugby Australia project group working extensively in parallel with our SANZAAR partners on the Rugby Championship and other international opportunities for the next broadcast cycle. We look forward to continuing our detailed work on this and continuing our positive discussions with our broadcasters.”
Tew has been a fine soldier of the game in New Zealand with respect to battling against the commercial odds. But with a foot out the door and a retiring eye towards Central Otago’s golf courses and Pinot Noir, “original product offering” sounds tired, uninspired and – dare I say it – defeated.
By comparison, Castle’s comments imply that Australia is further down the contingency path, and offer more hope. Australian rugby can only trust that this is borne from substance rather than exuberance.
One potentially positive outcome is that it will probably be a trigger for both administrations to return to a more grassroots-based focus, even if that’s on reduced revenues and for the reason that much of their professional player development and management will be abdicated to Japan, France and the UK.
Unquestionably, the jobs of the next All Blacks and Wallabies coaches will be made much harder. But even if New Zealand’s incredibly successful model of stage-managing their professional rugby competitions to ensure the success of the All Blacks is compromised beyond recognition, what is important is how quickly they recognize this and transition to a new professional model that retains their competitiveness at the very top level, while simultaneously replenishing a damaged amateur game.
For Australia’s part, potential domestic solutions seem crippled by chronic parochialism and lack of money. But ultimately, the game here will have no choice but to cut its cloth according to whatever funds it has at its disposal.
If a domestic professional competition, such as the NRC or any new hybrid franchise/club model, that pays Australia’s leading players to train and play as true professionals is unsustainable today, then, it will be unsustainable in the future in the wake of this announcement, barring a miracle.
In that context, a consensus and commercial arrangement with Andrew Forrest re-emerges as a potential outcome that makes more sense outside of SANZAAR than it did within SANZAAR – albeit without Australia’s best players.
Will we be seeing more of Twiggy? (AAP Image/Richard Wainwright)
The statement from NZ Rugby also acknowledged the work of World Rugby, firstly in bringing an enticing proposal to the table, and for trying to reach consensus with all member nations.
Rugby’s history is not exactly littered with examples of men of the north taking up cudgels on behalf of rugby nations of the south, but World Rugby chairman, Englishman Bill Beaumont, has continued to advocate for rugby’s greater good. The failure of this project is not his personal failure.
But it is failure nevertheless, and World Rugby will have to find another way, on another day, to convince some member countries that accelerated development of the game in second-tier nations like Fiji, Japan and Georgia is a worthy objective, no matter how small and how heavily mitigated the risk to themselves.
Is it over-dramatising the situation to consider this New Zealand and Australian rugby’s Apocalypse Now moment? A messy war fought on two fronts, between north and south, and club and country? Like most wars, ultimately senseless and deleterious beyond the point of purposeful gain?
I fear not. For Martin Sheen’s Captain Benjamin Willard, hallucinating alone under a Saigon hotel ceiling fan, insert New Zealand or Australian rugby, slowly coming to the realisation that this is a war that cannot be won.
There are choppers cutting their way through a napalm-laden haze to the strains of Jim Morrison. This is not The End of rugby in New Zealand and Australia but, almost certainly, it is the beginning of the end of professional rugby as we have come to know it.
Mishnz
Guest
I say we in the south refuse to play Scotland and Italy. Pay those average and waste of time country’s back... they may not notice it but it sends a message. No NZ Aus SA Argies.. then they no we unhappy at the top level. We doomed either way.. do something to stop the drain of our players going north.. do nothing our top teams days are number.
GibbonRib
Roar Rookie
I think most 6N fans would disagree with you. SA are a quality team and Cape Town is an amazing pace to visit, but getting there is not exactly like the ferry to Dublin or the train to Paris. But that's not the reason it'll never get of the ground. A 7N would mean clubs would need to release all of their internationals for a 10 week period (currently it's 7 weeks for the 6N). Why on earth would they agree to do that? The 4th Autumn International only requires English/French clubs to release English/French players ( not the Welsh, Scottish, Irish etc.), so removing that one game is not much of a trade off. The Celtic and Italian unions could push it through because they control their clubs, but the English and French leagues would kill it dead.
FunBus
Roar Rookie
I can see you, Jacko, stripped to the waist performing a spellbinding Haka in front of your bedroom mirror. This belief that the world hangs on every word and action of the ABs is hilarious. I think you might be quite surprised about what a huge splash the ABs boycotting the EOYT DIDN'T make. Best of 9 Bledisloes and an intra-AB squad series of matches in June it is then. I've got a few hundred pounds in the bank - I might buy the NZRU in 2025.
FunBus
Roar Rookie
I love the way that Kiwis debate various options for how they should throw their weight around and 'demand' this and that without ever considering likely reciprocal 'measures.' The two things that have bailed NZRU out financially in the last decade has been the 2011 RWC and the Lions tour. I can't see NZ ever getting a RWC again (or at least not for 20 years at least). Wrong time-zone, too small, doesn't make commercial sense. The plan to shaft Ireland and Scotland (apart from the ludicrous belief that England, Wales, France and Italy would go along with it - why would they?) would certainly mean NZ was off the Lion's itinerary. What's the 'plan', Jacko, to play best of 9 Bledisloe Cup every year? That will get the money rolling in.
FunBus
Roar Rookie
I think SA joining a 7 Nations would be very attractive. The time zones means it's a totally different scenario than Argentina. Believe me, many would fancy a few days in Cape Town every other year or so. The trade-off would be one less Autumn international. You could sell that to the clubs easily.
GibbonRib
Roar Rookie
I can see SA choosing to move north for the purposes of club / provincial rugby. But there is almost zero chance of them joining a 7 Nations. This would extend the tournament by a minimum of 2 weeks, possibly 3, which just doesn't fit. Most fans wouldn't be in favour - a huge part of the 6N is the travelling fan element, and bring back the bye weekend would be a big no-no. All the same reasons that meant Argentina were never going to be admitted when that was raised 15 years or so back. I think some SH fans don't appreciate that in the north the unions don't control all elements of the game the way the do down here - clubs are much more independent, and generally hold player contracts and power
Derm
Roar Guru
“Well I guess we will have to disagree…I say the Abs should not bother playing Ireland until it becomes an equal partnership……Eng, Wales and Fra could have the EOYT games every year after its reduced to 2 games (as you want the mid year tours to be reduced to) and the ABs should just 100% ignore ireland, Scotland and Italy” In the last twenty years, Ireland have played against New Zealand 2001 Dublin 2002 Dunedin & Auckland 2005 Dublin 2006 Auckland & Hamilton 2008 Wellington 2008 Dublin 2010 New Plymouth 2010 Dublin 2012 Auckland, Christchurch & Hamilton 2013 Dublin 2016 Chicago 2016 Dublin 2018 Dublin That’s 7 home matches, 9 away and 1 neutral but hosted/owned by NZRU and its sponsor – effectively 10-7 in favour of NZ income generating matches. What equal partnership are you looking for?
Joe King
Guest
A sobering article full of realism. Thanks Geoff. It almost makes me want to go for the AB's against some of those Northern Hemisphere countries... almost. On a more serious note, one possible way to bring more revenue into NZ and Oz is to create a new league with Australian and New Zealand teams, but with the AllBlacks able to be chosen from any of the teams. The big downside for NZ is it changes the current set up, where AB's can only be chosen from their own 5 SR teams, allowing NZRU to have much greater control of their players, and how to best prepare them for the AB's. The upside would be, while NZ would continue with their current 5 SR teams, it potentially opens up more teams in Australia. The Australian market is far from saturation point and has far more potential than currently. Our problem is we aren't competitive enough to sustain that many teams to to maintain interest in them under the current structures. However, if the new league were set up in a similar way to the NRL, with some sort of control to spread the playing talent evenly across all teams, then with NZ's players and coaches (and even culture) spreading to to the Australian-based teams, it potentially taps into a whole new market in Australia, and thus, brings in new revenue. It could even start to compete with other domestic competitions in Australia. Yes, it would benefit rugby in Australia, but that would also drive interest in the Bledisloe Cup, taking that to its former lofty heights of yesteryear. It could actually save the professional game in both countries and give us a fighting chance. Thoughts?
jacko
Guest
Ooops.....Hi Geoff...read my post to derm
Jacko
Guest
They may well have been ...i didnt ask them....mind you I would be shocked if the crowd in NZ between NZ and Tonga was an Aus crowd....
Derm
Roar Guru
Ah - on re-reading your comment, I see what happened. You read my quote from Geoff: "but the moment New Zealand and Australia concede to picking their Test sides from all domiciles, the best players will move accordingly into the richest leagues " thinking that I had written it. So your response above should be to Geoff, not me.
Istanbul Wingman
Roar Guru
One thing rugby union needs to be mindful of is the fact its league counterpart is currently making a huge bid to win over Pacific Island hearts and minds. The Australian government has thrown its weight behind this as it sees the sport as a means by which to offset the growing influence of China in the region. The relaxed eligibility rules, increased contacts, sundry tournaments and multitudinous war dances are all part of a concerted effort to usurp union as the primary sport of the Pacific Island community. A fifth of the players at the last rugby union World Cup were Pacific Islanders, with more than half the teams present including at least one in their squad. This is a tremendous asset to union, which we ignore at our peril. The time has come to bring the Pacific Islands fully on board. Including both Fiji and Samoa on the World Rugby board was an important step in the right direction. Now it's time to start treating them as equals on the playing field.
Derm
Roar Guru
Hi Geoff. Yes I agree with you about the status and the age profile of the players. That’s what I’m including in my analysis this time round. Birth country, moved early or in teens, parentage, what comp they were playing ITM, NPC, School, Currie, SR, age when they went OS first and what country/league they went to. That will help to refine and whittle down the numbers to see more clearly the different types of foreign born players - from Tier 2 countries as well such as Georgia and Samoa not just the three Sanzar ones.
Derm
Roar Guru
I’m sorry but none of that makes any sense to me or connects to the point I was making to Geoff, Jacko. Maybe try it with someone else who might understand. Try writing English, French or Japanese clubs if that’s what you’re referring to. “NH clubs” doesn’t make any sense as there’s 66 of them and it’s too broad.
Machooka
Roar Guru
Apologies G... late to this one. Excellent piece... I could smell the napalm ;)
Jacko
Guest
but the moment New Zealand and Australia concede to picking their Test sides from all domiciles, the best players will move accordingly into the richest leagues......................They cant buy them all Derm.......there is 500+ plus pro SR players in NZ ,Aus, SA...What clubs are they all going to play for? Are the NH clubs not going to have locals anymore? Its a terrible thought but its also a fantasy...The Nh clubs only chase the best and the Sh unions are retaining most they want to so is the Nh club scene going to be lower quality than it already is? I just cant see how its possible to integrate all these SH players into the Nh club comps without having 10-15 OS players per 35 man squad and it will reduce majorly the players from the ACTUAL NH international sides...Doesnt the brexit deal also change the qota's of OS players allowed?
Jacko
Guest
Well I guess we will have to disagree...I say the Abs should not bother playing Ireland until it becomes an equal partnership......Eng, Wales and Fra could have the EOYT games every year after its reduced to 2 games (as you want the mid year tours to be reduced to) and the ABs should just 100% ignore ireland, Scotland and Italy.....An ABs vSA 1 year....ABs v Aus 1 year...ABs v Barbarians 1 year then a WC the 4th year... So starting in ...EOYT... 2020 ABs v SA...ABs v ENG...ABs v France 2021...ABs v Aus.. Eng..Wales 2022 AB v Barbarians...France and Wales..... That way its not a annual thing the fans will get sick of as their is enough Expats from all of those nations to fill a stadium once (per team) every 4 years.....Shut out Ireland...Shut out Scotland and shut out Italy....In other words start setting our own agenda rather than just accept the NH agenda....AND...If SA goes North then that would add a 4th nation to play on the EOYT yearly and would also give an extra team to have tour NZ mid year......Ireland, Scotland and italy can hope to get NZ in their WC group if they want to play them ever again....Or maybe come up against them in the finals....Well the 1/4 finals anyway as they never get past the 1/4 finals......but it is definately time to start making decisions outside of the NH...Use them when it suits like they use us but then ignore them beyond that as its not an equal partnership...As for your wonderful 40Mil that the Lions tours brings......remember thats 40mil injected into the economy not 40 mil to NZRU......Find another lion...develop an alternative....Tradition is only something that has been done a long time...Maybe a combined England France Wales Georgia and Romania ...The NH ignores these last 2 teams so pick up in that area....And develop a relationship with the USA... Throw a match in against Japan on the way Nth every 2nd year.....Maybe have a EOY tournament of all the SH sides with the unwanted NH sides invited as well...In the end the SH sides need to do what is best for them...Not what has been done for years as we now see that that builds no loyalties and brings no favors and ireland Scotlan and Italy have shown that self is more important than development and growth for all....Just start showing the same traits as they are showing....
John R
Roar Guru
Budget cut is a misnomer. They have frozen the indexation of the funding provided. Which for all wants and purposes, adds up to a budget cut. That's the reason why the ABC are pulling out of paying Foxtel to broadcast some of their content, which costs them $4m per year.
Jacko
Guest
NZ rugby tourism is going to run tours of the school rugby comps for prospective scouts from OS and other sports....looks to be millions to be made
Derm
Roar Guru
“The primacy of wealthy northern club rugby was always going to dominate no matter the international schedule, too much cash always wins” Highlander – Geoff states that it was the unions of Ireland, Scotland and Italy that sought to block the deal. Coincidentally, those are the 3 unions that own their club teams lock, stock and barrel with only Benetton directly involving a private franchise, but nonetheless still dependent on the FIR for financial stability. That financial stability stems primarily from test rugby income. The TV income for the 14 clubs in PRO14 is, at its kindest, half of what the 12 clubs in the English Premiership receive, and about a third of what the French clubs in Top 14 generate. I don’t see how the “primacy of wealthy northern club rugby” dominated decisions at all. The PRL (England private club owners) and the LNR (French private club owners) had no vote in the decision. The vast majority of SH-born players are playing in France, Japan and England – all involving private, individual or corporate funders. That’s where the real wealth is. If you are arguing that the Irish, Scottish and Italian unions voted against the risk of relegation because of the primacy of wealthy English, French and Japanese clubs in dictating the player cost economics of the game, then I’d agree with you. A flood of money into the game for those unions (and the Welsh too I would argue) would not benefit them proportionately. It’s no coincidence that France has the least amount of domestic players playing abroad. I’ve yet to find any of note.