A business like any other business?

The Rugby World Cup in Japan this year is, more than ever, the source of many challenges. It is first and foremost an opportunity for World Rugby to promote a sport that is not very popular on this continent. But this opening to Asia obscures major commercial issues such as making television rights profitable for broadcasters. decoding.

Does rugby work like any other business? One only has to look at the impressive budget numbers of the top 14 clubs to understand that the answer is yes. Professor Jerome Poisel, Professor of Marketing at La Rochelle Business School, sums it up quite simply:Fans think it’s a sport, but when matches became paid, it became a business like any other “.

Rugby World Cup action

Born in 1987, the first Rugby World Cup propelled the sport into the professional sphere. Thirty years later, a real work was organized around this event. ” To obtain the right to organize this competition, the organizing committee must pay 170 million euros to World Rugby. This is a guaranteed minimum revenue. This amount does not cover the costs of developing stadiums and infrastructure. »

In 2015, the Rugby World Cup allowed the Rugby world to make €210 million in profits. And England, the country organizing this event, estimated the economic benefits at 1.1 billion pounds.

In France, the organization of the event is preparing for 2023. The commission will donate 172.5 million euros in royalties to World Rugby. Communities should put on the table about 90 million euros (including only 25.5 from the state). France’s 2023 operating budget is estimated at 146 million euros. In terms of revenue, the ticket office should bring in around 370 million euros. The expected net profit is about 68 million euros.

The legacy of sporting events

But all of these expenditures pose a global problem that affects many events of this scale: equipment sustainability. Everyone remembers the case of Greece, which hosted the Olympic Games in 2004.

And while the state was planning to spend only 4.5 billion euros, it will pay 8.95 billion (almost twice the amount) just for the construction of sports complexes! This amount does not take into account infrastructures such as the highway, trams, or the construction of new metro lines. Training pool, canoe course – kayak…Finally, the majority of infrastructures are no longer used after 2004.

In Japan, the question of the profitability of sports equipment is not raised. ” The size of the stadiums is at a human level, between 30,000 and 50,000 seats. They already host national and international baseball and rugby competitions ‘,” identifies Jérôme Boissel.

World Cup: a powerhouse for amateur practice?

More than investing in infrastructure, these events make it possible to promote the sport and significantly increase the number of members. At the end of summer 2019, many football clubs saw an increase in the number of female players after the FIFA Women’s World Cup.

On the rugby side, a portion of the profits will be redistributed to amateur sports, particularly in regions where the sport is less developed such as Africa, but also in Asia where rugby is less played.

This continent is also an arena of challenges for global rugby that has a hard time seducing the inhabitants of this part of the world. ” World Rugby has chosen Japan to take back the Asian market. When this country applied, one of its strong arguments was that it represented the gateway to Asia. Unlike football, rugby is rarely played in China or India. This still represents nearly 30% of the world’s population! »

Rugby: an unattractive sport?

If the practice is very common in many regions of the world, such as England, rugby is sorely lacking in international fame. Already in Japan, Rugby is a fairly college sport intended for wealthy families. And so the question arose about the popular success of this competition Jerome Possel notes. However, it is important to note that matches are running out (even if the capacity of the stadiums is lower than in previous editions of the Rugby World Cup).

And the question of the popularity of rugby is now also being raised in France, the country of rugby until now. This is an important issue, especially in France, when we know that the TF1 group, the sole broadcaster of the event, spent 45 million euros. It is enough to compare audience results between the football quarter-finals and the Rugby World Cup to understand that the investment is not necessarily interesting to a group that has refused to sublicense its rights to other channels.

The quarter-final matches, broadcast this weekend, with France at the top of the list, drew 6.7 million viewers and thus had 62.9% audience share for the match broadcast on Saturday morning, in a schedule where programming is not very competitive. The soccer World Cup quarter-final matches, broadcast at noon on Friday, drew 12.9 million viewers (nearly double that number, for a match broadcast in the middle of a working day). In total, this event achieves a PDA of 76%.

So it became difficult for the TF1 group to justify the €85,000 required for 30 seconds of first screen ad space during the first half of the final, if France did not qualify (double more than TF1’s most popular programmes). For comparison, in the 2015 Rugby World Cup Final, the channel earned €43,000 for the same slot. Finally, the group will step back and now offer 30 seconds of advertising space at a price of 50,000 euros.

Reduction in the number of insiders

More than viewers, rugby is also beginning to attract less practitioners. In fact, among insiders, there is no “World Cup” effect. Even the number of registrants has been declining in France for several years. The 2019 World Rugby Report is useful: the French Rugby Union has lost a significant number of club players for two years. For the 2016-2017 season, there were 290,000 licensees compared to only 258,247 during the 2017-2018 period.

Jerome Possel notes several problems. First of all, the image that sport holds in the general public, with all the concern in particular associated with injuries and other concussions. Another issue is the ruling between the National Rugby League, which operates professional rugby clubs, and FFR, which deals with amateur clubs.

Another observation is the lack of investment by public authorities in promoting the sport. If football had a rather bad reputation, rugby could have benefited from being introduced by the municipalities. ” It’s a missed opportunity. Next registrations will be within eleven months. If we put a ball in the hand of a child or even organize an interschool tournament during the World Cup, the children will be informed, and they will want to watch the matches and participate in the sport the following year. »

Japan World Cup: Rugby kicks off in the 21st century

Unlike previous editions, this year’s competition will be heavily influenced by technology. ” Marketing reflects the country. It leans on tradition, but showcases completely renovated stadiums for consumers in 2020. »

The competition will be marked in part by heritage, which is one of Japan’s values. Thus, one of the World Cup hosting stadiums is located in the heart of Kamaishi, a city completely devastated by the 2011 tsunami.

But Japan is also a high-tech hub and puts it in the 4.0 World Cup finals. In addition to courts with retractable surfaces, rugby players play in a complex where the pitch, laid on a hovering system, allows organizers to choose between synthetic ground and natural grass that grows off the court.

The World Rugby team would like to take advantage of this competition to offer viewers a new experience. ” With a smartphone, you can watch the restarts almost in real time. The goal is to push rugby into the postmodern era and no better than a show like the World Cup to spread these innovations. The Canon brand also got in on the action by introducing a highly immersive device, allowing viewers to be in the center of the action.

Lots of innovations that are a way for Japan to attract fans in a country that was not originally rugby. Another major issue for the country: tourism. Indeed, the nation of the Rising Sun intends to take advantage of the World Cup, and then the Olympics next year, to revive tourism in regions that were still affected until recently, such as Kamaishi.

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