Front Row Grunt

Rugby … with cauliflower ears

IRB cash in while Kiwis pay

Yesterday the organisers of last year’s Rugby World Cup in New Zealand reported a loss of NZ$ 31.3 million.

It was also reported that the NZRU will cover NZ$10 million of the loss, with the balance coming from the tax payer, i.e. the man in the street. The man who paid top dollar for tickets to the games and splashed out on a few cold beers and a pie before the game …

This after the IRB declared the 2011 Rugby World Cup to be the second most commercially successful edition of all time earlier in the year – In a statement issued from its Dublin headquarters, the IRB said the tournament was on course to achieve a “net surplus of more than NZ$ 176 million!

Obviously the land of the long white cloud, having welcomed 133 000 visitors to their shores, will continue to benefit economically from successfully hosting the event for years to come. And the huge television audiences and extensive media coverage generated by the tournament will have boosted the country’s international profile. Some suggesting that the event is estimated to have boosted economic activity in New Zealand by more than NZ$ 500 million …

And of course the IRB do a huge amount in the ongoing development of rugby worldwide, with 92% of the global governing body’s profits, coming from the World Cup.

But one can now understand why the NZRU moaned about the financial structure of the tournament at the time. Sure New Zealand benefits from hosting the event, but they are still out of pocket, as is the man in the street. This even though more than 1.35 million fans attended the games, with revenue from ticket sales surpassing NZ$ 268.5 million.

Should the IRB not be picking up the NZ$ 31.3 million tab? Are the IRB heading the way of FIFA, who quite clearly bullied South Africa into spending more money than it needed to in order to host the Soccer World Cup in 2010?

Or perhaps it is for New Zealand to find a way to utilise the money made via tourism to cover the costs?

Author: Tank

Ex WP prop with a fair amount of experience in all things media ...

4 Comments

  1. Nothing new in these world events be it football, athletics or rugby. I am interested to see what comes out of the London Olympics in 2013 when the bean counters have finished their job. They are already ±50% over budget.

    • Aggreed Neil.I do however believe that for the reasons of marketing their countries ,towns and cities aouthoritiez spend a lot on fixing and ‘polishing’ up their places..so much for sport and conferences as this seems to be the only time they put brooms up their backsides and sweep the streets and then they complain they have spent too much money on their stadiums cities ,roads, security etc after having benefitted hugely in other ways..they should be doing this anyway for their people..so at the end who is all benefitting or making huge profits out of sponsorships licence agreements,administration,etc etc.Thank goodness that events such as this lead to all kinds of upgrading,building,spit and polishing etc etc.

  2. After all the ticket sales and beers and pubs and accomodation places and service accounts for electricity ,water and sewerage, and TV channels making money,and a few countries getting aid for there countries teams to attend etc,who is eating up the money..administrators who are splurging on hotels ,moét and cognac or what???they need to open there books.this is the case with many sports such as cricket ,soccer,notor racing ,athletics and tennis too..check it out and you Will be surprised…something is wrong….???!!!

  3. Those numbers can be misleading. Probably deliberately so.

    The World Cup did not make a loss, so forget about that. The IRB profit from the tournament included TV rights, sponsorships etc. and a guaranteed hosting fee paid by New Zealand. The New Zealand accounts get only the ticket sales less the cost of the tournament and the abovementioned fee paid to the IRB. It’s the hosting fee that turned the New Zealand profit into a loss, and this was always the expectation and the budget.

    I can’t remember what the fee was, but the minimum acceptable bids for 2015 and 2019 were £80 million (England) and £96 million (Japan) respectively. SARU guaranteed more than that, I think they bid £130 million. Clearly, there is taxpayers’ money in that calculation, hence the need to keep the government onside.