Cash cow must be nurtured and fattened

WE’VE ALL seen the photograph. The year is 1995 and Francois Pienaar of South Africa receives the William Webb Ellis Trophy from Nelson Mandela in front of 63,000 people at Ellis Park in Johannesburg. The Springboks have won a grinding, attritional final against the much-fancied All Blacks to win the third IRB Rugby World Cup, just three years after the country’s re-inclusion into the international game.

Mandela, the hero of the anti-apartheid era and of black South Africa, is wearing the dark green of the Springboks, a symbol of white supremacist rule. It’s a marketing man’s dream: The World In Union, such a powerful narrative that Clint Eastwood made a film about it.

But this is the official version of rugby history. And like all histories, it has been written by the winners: the official governing body, the IRB, and by extension, the Unions of Ireland, England, Scotland, Wales, France, Australia, New Zealand and South Africa.

It could have been very different.

In 1995, as that photo was taken, the IRB were fighting a battle for their own survival and one of the chief architects of the revolt was the man at the centre of the picture, Francois Pienaar.

Behind the scenes, the Springboks captain was acting as a recruiting sergeant for Kerry Packer, the Australian media mogul who was intent on doing for the then still amateur game of rugby union what he had done for cricket nearly two decades before.

Packer’s World Rugby Corporation (WRC) had spent the ’95 World Cup signing up players to break away from the official ranks and join his gang. This process was not difficult, given the amateur status of the players and the size of Packer’s cheque book – like “shooting fish in a barrel” was how the job of signing up disgruntled rugby players was later described.

“We are in a wild west situation with a lot of cowboys in town,” said Edward Griffiths, chief executive of Sarfu, the South African union, which faced the threat of a mass player exodus, either to Packer’s breakaway or Rupert Murdoch’s Super League. The official board responded with cash and threats, which came to a head in a hotel room in Sun City.

Pienaar, on a €200,000 promise from Packer, had persuaded 25 of the 28 Springbok squad to go to Packer. But they were faced down by the intimidating figure of Louis Luyt, the Sarfu president, who persuaded the players their futures lay in the official game.

This was the point where the rebels were defeated, and effectively marked the moment when rugby turned pro, a fact recognised officially by the IRB in August of that year.

Today the IRB’s place at the heart of the game is relatively secure, as long as they keep the money coming in. To this end the Rugby World Cup is the game’s cash cow, the value of which was revealed in those harem scarem days of 1995.

Behind closed doors, Luyt offered the would-be rebel Springboks a hike in pay. But he also employed another lever: history, and what the advertising industry likes to call the authentic experience.

Rugby players in every country grow up wanting to play in THAT shirt, in THAT tournament and for THAT trophy, all of which are the intellectual property of the official unions, the same IP that has proved so alluring to fans, sponsors and TV.

The last World Cup, in France in 2007, turned over €230 million (the 2011 event is expected to fare less well due to the unhelpful time difference between New Zealand and the big European media markets). By comparison, the revenue gained by the 1995 tournament was €35 million.

This growth in income over the last decade or more mirrors that seen in other sports: as media channels proliferate, the value of the live moment has risen exponentially. This year, sponsors pay between €285,000 for an entry level association up to €5.7 million for a worldwide partnership. Broadcasters contributed €93 million in rights fees in 2007 and ticket income was €167 million (France’s stadia are far bigger than New Zealand’s, so a fall in ticket revenue is expected this time around).

The commercial success of RWC 2007 allowed IRB to make a €140 million surplus.

The money flows through the board’s St Stephen’s Green HQ and is largely distributed to the unions, the game’s grassroots and international development programmes, youth and women’s rugby. The IRB are also pushing hard to grow sevens: a sustained lobbying campaign resulted in the game’s inclusion as an Olympic sport, which in turn releases funding from governments beyond the game’s core constituency.

Had events turned out differently in that Sun City hotel room, say the IRB’s supporters, it’s fair to assume Kerry Packer would not have spent his money on these things. Professional rugby union may have grown differently, detached from any responsibility beyond its own member teams, in the style of the NFL or Formula One.

However, another legacy of 1995 is a certain control freakery as to the policing of the IRB’s commercial inventory. If you’re going to New Zealand this autumn, try buying a ticket from an unofficial travel agent, or when you are in the ground, ask for a Guinness rather than a Heineken and see how you get on.

Heineken have paid around €5.7 million to be the official beer of the RWC, ensuring pouring rights at every venue. The anti-alcohol lobby is looking for any reason to ban beer sponsorship: using rugby to advertise lager at 8am – even if accompanied by calls to drink responsibly – would merely hasten this process.

The decision to hold the cup in New Zealand was done for “rugby reasons, not business reasons” said Mike Miller, chief executive of the IRB. To mitigate this problem, IMG, the board’s sales agency, have bundled together many of the rights to 2011 with those for 2015, in what might be called a “jam tomorrow” strategy. The 2015 event will be held in England, which will prove more sponsor friendly.

Most analysts agree that when it comes to attracting an upmarket crowd, rugby has few equals. “There’s very little wastage,” said one sponsor consultant, and the World Cup engages the general public far more than other “upmarket” sports such as sailing: It’s a rare day when someone’s late to the pub because they wanted to catch the end of the Volvo Ocean Race.

But the lesson of 1995 is that however permanent a regime seems on the surface, things change, and quickly.

It’s this thought that keeps sports new generation of well paid administrators up at night. The international calendar is looking full and future growth may come from the club game. Back then it was Kerry Packer talking revolution. Tomorrow the threat may be closer to home.