Exit from Super Rugby?

[Omar Comin']

Where's the money going to come from?

The same places it comes from for any sport. Where did it come from for the Brumbies or the Force or the Rebels? These are all established teams now with decent fan bases that compete in a tournament with a poor financial model. I am optimistic that a competition with a better model would be more valuable to local broadcasters and attract private interest for new team ownership and sponsorship. Why? Because it works for every other sport in Australia and every major sporting league in the world. Unfortunately the world's one test of a lengthy sporting league crossing the Indian Ocean and a 10 hour time difference hasn't been a raging success for us.

Braveheart, good post, all fair points. There'd definitely be risk in any change and you're right about capital needing to be raised from sources outside the ARU (though the ARU does have some cash now after the Lions tour). And perhaps teams in Asia might be too big a risk at this point if we were forced to go alone. There is always a risk of teams folding though. It happens in every sport and people get on with things. Hasn't hurt the A League much.

I just feel when the current model is not working what choice do you have but to try something different? At the very least all avenues should be explored as much as possible. Unfortunately rugby administrators are very stuck in their ways.

 

[Blue]

Thank goodness the world is not full of CEO's who just "try something different because the existing model isn't working."

Any changes to any business model involves some assumptions and models of potential future revenue streams. Market demand happens to be a MAJOR driver in any such models. Seems Omar and a few others here know of some untapped market demands that the entire ARU has never even though about or expertly hidden so they can pull a major coup.

Omar, no offense. It doesn't stack.

I doubt Pulver will be as stupid as to just change something because he doesn't like it.

I don't think comparing to the A League is valid at all. It's a fledgling league with obvious growth potential. Not so obvious with rugby I'm afraid.

 

[Braveheart81]

I don't think comparing to the A League is valid at all. It's a fledgling league with obvious growth potential. Not so obvious with rugby I'm afraid.

Australia also has vast numbers of football fans which were well known prior to the A-League due to Australia's ethnic diversity and following of the previous NSL and overseas football leagues.

The premise that a second pro rugby team in Sydney would get adequate levels of support because "there are plenty of rugby fans in Sydney who don't like the Waratahs" is drawing such a long bow.

I do not for one second believe that there are an extra 15,000+ people desperate to attend the games of a new pro rugby team in Sydney but will only do so if it isn't the Waratahs.

 

[Train Without a Station]

There could be BH. But right now there certainly isn't. However many there are you have to consider what percentage you actually get to attend/follow.

Long term investment would surely see it a success, but really we all know the ARU is in no position for that.

I strongly believe a Trans Tasman competition is a better/more valuable sell to Foxtel and Sky Sports NZ than Super Rugby. NZ are in better financial state and can afford to consider the implications of not playing SA teams regularly in Super/Provincial Rugby that will affect their international team though. If we could, we should to.

 

[Omar Comin']

I don't think comparing to the A League is valid at all. It's a fledgling league with obvious growth potential. Not so obvious with rugby I'm afraid.

It's not just the A League. It is literally every single major sporting league in the world. There is no other example of a lengthy cross-continental league in world sport with a 10 hour time difference between locations. What evidence do you have that suggests more local content doesn't work?

We can all only speculate in a forum like this. You can't see all the way down a road that hasn't been taken.

But what do you propose? Pray the Wallabies win the Bledisloe this year and the world cup in 2015? If we stick with a model that's not working and has long been trending down then we risk not only going broke but joining basketball and swimming on the scrap heap of once mainstream Australian sports.

Perhaps we should stick to the status quo and just hope to magically get a much bigger broadcast deal with some FTA coverage ... despite no increase in the games that rate, a 10 year decline in the sports popularity under the existing model and fox no longer paying for exclusive rights.

 

[Braveheart81]

But what do you propose? Pray the Wallabies win the Bledisloe this year and the world cup in 2015? If we stick with a model that's not working and has long been trending down then we risk not only going broke but joining basketball and swimming on the scrap heap of once mainstream Australian sports.

Perhaps we should stick to the status quo and just hope to magically get a much bigger broadcast deal with some FTA coverage . despite no increase in the games that rate, a 10 year decline in the sports popularity under the existing model and fox no longer paying for exclusive rights.

Your proposal is to take a massive punt that if unsuccessful could easily send make the ARU insolvent in a single year.

Rugby is in a difficult position in Australia because it doesn't attract the number of fans it used to and is struggling to generate the matchday revenue as a result.

Arguably, club rugby is the biggest basket case of the lot so I don't think you can point to Super Rugby as the primary area that isn't working. If anything, the SANZAR agreement has been the only thing in Australian rugby that has worked reasonably well in the last decade.

I think the ARU is going down the right path of trying to get a sustainable NRC off the ground and trying to get a game a week on FTA as part of the next broadcast deal. This to me is the smart move because it is less risky but presents strong opportunities for growth both in terms of supporters and broadcast deals.

 

[Omar Comin']

I do not for one second believe that there are an extra 15,000+ people desperate to attend the games of a new pro rugby team in Sydney but will only do so if it isn't the Waratahs.

Who would have thought the Force could have attracted such a strong local following straight off the bat in an AFL mad city featuring a team with (originally) no local players!?

Western Sydney has a population of 2 million people. That's bigger than Perth. It has established rugby clubs and history. Its most popular sport is rugby league, the most similar sport to rugby union there is.

If a well run Western Sydney team playing in a top tier professional tournament with a few star players couldn't gain a foothold and a decent fan base then we may as well given up on being a mainstream sport in Australia. I happen to believe rugby is the best game there is and if taken to people in the right way has a chance to be very popular.

 

[Braveheart81]

Who would have thought the Force could have attracted such a strong local following straight off the bat in an AFL mad city featuring a team with (originally) no local players!?

Western Sydney has a population of 2 million people. That's bigger than Perth. It has established rugby clubs and history. Its most popular sport is rugby league, the most similar sport to rugby union there is.

If a well run Western Sydney team playing in a top tier professional tournament with a few star players couldn't gain a foothold and a decent fan base then we may as well given up on being a mainstream sport in Australia. I happen to believe rugby is the best game there is and if taken to people in the right way has a chance to be very popular.

The Perth population features a lot of expats from the eastern states and South Africa.

I think there is potential for a Super Rugby team in Western Sydney eventually but currently it is a very difficult proposition. The club rugby sides in that area struggle for players and support and without someone with very deep pockets commiting to bankroll the team for a long time it wouldn't be a possibility anytime soon.

Let's remember that the ARU had plenty of funds remaining from the 2003 RWC to help get the Force off the ground. The same doesn't exist now.

I think your intentions are noble and like you, just about everyone on the forum is passionate about rugby union, but if converting rugby league fans into rugby union fans was an easy thing to do, we'd already be achieving that in far greater numbers.

The ARU is taking a chance on the NRC and that is about the biggest chance they are in a position to take at the moment. Unless someone comes to the ARU and says here's $50m let's shake things up and create new teams etc. I think most of what you're suggesting is wishful thinking at this stage.

 

[Omar Comin']

Your proposal is to take a massive punt that if unsuccessful could easily send make the ARU insolvent in a single year.

I think the ARU is going down the right path of trying to get a sustainable NRC off the ground and trying to get a game a week on FTA as part of the next broadcast deal. This to me is the smart move because it is less risky but presents strong opportunities for growth both in terms of supporters and broadcast deals.

Basically I'm just saying what the original article in this thread is saying: the ARU need a plan B in order to get a trans tasman competition happening. And a trans tasman comp wouldn't be a big risk. A NZ/SA only competition quite obviously wouldn't work but we have no leg to stand on at the negotiating table without a back up plan that could at least tide things over for a season or two if needed.

And btw, I'm not suggesting the ARU go off and announce out of the blue we're going to leave SANZAR and then start trying to sell a new vision. They should be speaking with broadcasters now about it. Find out if there would be interest from private investors in a new concept and in starting new teams.

You wouldn't do anything like what I'm suggesting without a serious partner or 3 on board from the get go. Just like how the NRC became a reality only after Fox backed it.

I agree the NRC is a good thing btw. But with regards to super rugby, while a game or 2 on FTA will have long term benefits, in the short term it will reduce the money Fox would pay for rights. They pay for exclusivity. That short fall will almost certainly not be covered by whatever 10 or 7 would pay for one game a week.

 

[Braveheart81]

I agree the NRC is a good thing btw. But with regards to super rugby, while a game or 2 on FTA will have long term benefits, in the short term it will reduce the money Fox would pay for rights. They pay for exclusivity. That short fall will almost certainly not be covered by whatever 10 or 7 would pay for one game a week.

Surely this works counter to the argument you've continually run about the A-League getting a bigger TV deal than Super Rugby in Australia.

The idea is that the FTA broadcaster would also be paying for part of the rights.

 

[Omar Comin']

The Perth population features a lot of expats from the eastern states and South Africa.

Well I'm pretty sure a much larger number of people that live in Western Sydney are from the eastern states

It also contains a large number of Polynesian people that have an affinity with rugby union.

One of the problems rugby has is its perception of elitism. A western sydney team that helped change that perception could do wonders I think. Hopefully the Rams in the NRC can achieve that to some extent.

]Unless someone comes to the ARU and says here's $50m let's shake things up and create new teams etc. I think most of what you're suggesting is wishful thinking at this stage.

I basically agree with this. But the ARU shouldn't just hope someone comes to them.

If we're not right now in a position to consider this I really hope we don't sign up to a 5 year deal. 2 or 3 years would be okay. Would give us time to assess how the NRC goes. A new 2nd tier competition could potentially be built off the back of that (combining the stronger NRC clubs with the current super rugby franchises).

Surely this works counter to the argument you've continually run about the A-League getting a bigger TV deal than Super Rugby in Australia.

The idea is that the FTA broadcaster would also be paying for part of the rights.

You're assuming soccer wouldn't have got more from Fox with an exclusive deal. I'm not sure about that. I believe Fox were willing to test the theory that some exposure on FTA might increase the number of people subscribing to Foxtel to see all the other games. From what I've read this hasn't happened. And with the current (and proposed) model of Super Rugby there are only 4 games on every week that rate. So you take out one of them (and it'll be one of the 7:30 games, i.e. the best rating game), then they now only have 3 exclusive matches and only 1 Australian game. It's not a lot.

 

[Blue]

The Perth population features a lot of expats from the eastern states and South Africa.

And an captive audience who was starved live sport so they could tap into marginal rugby fans as well.

People in Western Sydney have lots of soccer, Loig and AFL to choose from already. It's a much harder sell.

 

[TahDan]

Thank goodness the world is not full of CEO's who just "try something different because the existing model isn't working."

Any changes to any business model involves some assumptions and models of potential future revenue streams. Market demand happens to be a MAJOR driver in any such models. Seems Omar and a few others here know of some untapped market demands that the entire ARU has never even though about or expertly hidden so they can pull a major coup.

This may be so, but if the ARU accepts the nonsense being put forward by South Africa, they've effectively signed their own death warrants. The game simply can't sustain itself if things stay as they are, let alone if they add in more SA teams, Argie teams and a Spanish one.

The question really becomes one of "do I gamble on an unknown option that could destroy me, but may save me, or choose a certain and slow death".

On soccer - people talk about the A-League now like it was always going to work, but before it launched the commentary and expectation for it was the opposite. All people could see was a long history of failures by soccer administrators in Australia, with the only thing standing out being the ethnic violence that surrounded their game.

 

[Braveheart81]

This may be so, but if the ARU accepts the nonsense being put forward by South Africa, they've effectively signed their own death warrants. The game simply can't sustain itself if things stay as they are, let alone if they add in more SA teams, Argie teams and a Spanish one.

The question really becomes one of "do I gamble on an unknown option that could destroy me, but may save me, or choose a certain and slow death".

Or perhaps the reality is that without SANZAR, the ARU wouldn't still be afloat today.

During Super Rugby, the ARU has gained two extra teams and home and away local derbies every season. If anything, Australian Rugby has been given more by the two other countries than either South Africa or NZ has got in return.

If anyone is due to do a little more giving and a little less taking in the next SANZAR deal it would be the ARU.

Rugby's competitive advantage is that it is a truly international sport and interest is increasing in most jurisdictions except Australia. Personally, I think whilst it might cause more pain in the short term, Australia's continued status as a rugby powerhouse will most likely be retained if we consistently remain one of the top three nations in the world and are part of the strongest or close to the strongest test match and 2nd tier competitions in the world.

I think a local approach of trying to come up with the best formula to suit the domestic TV market is a recipe for turning ourselves into a rugby backwater. We aren't going to take ground away from AFL and League by trying to produce a similar competition with a far lower level of support.

NZ and South Africa are in a far better position to call Australia's bluff than for Australia to follow through with a threat of leaving.

 

[TahDan]

If anyone is due to do a little more giving and a little less taking in the next SANZAR deal it would be the ARU.

Super Rugby helped put the game in a great position here early on, but we always needed a strong third tier, and that has not been developed.

The question is, now that interest in Super Rugby is dwindling in Australia, how do we survive with the mess the SARU are proposing? The sad reality is that, one way or another, Super Rugby won't involve Australia in a few years time if things keep on as they are.

Rugby's competitive advantage is that it is a truly international sport and interest is increasing in most jurisdictions except Australia. Personally, I think whilst it might cause more pain in the short term, Australia's continued status as a rugby powerhouse will most likely be retained if we consistently remain one of the top three nations in the world and are part of the strongest or close to the strongest test match and 2nd tier competitions in the world.

I think a local approach of trying to come up with the best formula to suit the domestic TV market is a recipe for turning ourselves into a rugby backwater. We aren't going to take ground away from AFL and League by trying to produce a similar competition with a far lower level of support.

NZ and South Africa are in a far better position to call Australia's bluff than for Australia to follow through with a threat of leaving.

Soccer's competitive advantage is its international nature, yet it manages to do alright with the A-League...

From what I've read about the ARU's current position in the AFR and the Aus, it seems pretty clear that we're on the fast track to 'backwater' status unless we start making some bold decisions. The status quo will turn us into Tonga.

 

[Braveheart81]

Soccer's competitive advantage is its international nature, yet it manages to do alright with the A-League.

From what I've read about the ARU's current position in the AFR and the Aus, it seems pretty clear that we're on the fast track to 'backwater' status unless we start making some bold decisions. The status quo will turn us into Tonga.

The A League plays a 27 game regular season (9 more games than Super Rugby) and features a dramatically lower wages bill due partly to lower average salaries but mostly due to having about 10 less people in each squad.

Football is the biggest international sport there is. The financial success of the A-League despite being a backwater competition is a sign to me of how popular the sport is here. 95,000 went to see Liverpool play at the MCG.

The ARU is going the right way regarding cutting staff costs both from office staff and players. They had been paying far above the 26% of player generated revenue to the players and that has come home to roost in a market where revenues are falling. It is just unfortunate how much of a hit this is to player salaries due to previous largesse. It's the double whammy of paying the players a percentage of decreasing revenue and lowering the amount they spend to the actual percentage agreed upon. The players will largely suck it up and deal with it. The lure of playing for the Wallabies, particularly with a World Cup next year looms large and not many players will want to miss out on that opportunity.

 

[TahDan]

The A League plays a 27 game regular season (9 more games than Super Rugby) and features a dramatically lower wages bill due partly to lower average salaries but mostly due to having about 10 less people in each squad.

Football is the biggest international sport there is. The financial success of the A-League despite being a backwater competition is a sign to me of how popular the sport is here. 95,000 went to see Liverpool play at the MCG.

A lot of that is novelty value I reckon. The NFL got 90k to watch them at Wembly in London last year, so I don't know if those one off games against world famous opposition tell you too much... Soccer is doing alright, but I reckon that stat is misleading given a lot of the other ones (over-all crowd averages, TV viewing figures for the A-League etc)

The ARU is going the right way regarding cutting staff costs both from office staff and players. They had been paying far above the 26% of player generated revenue to the players and that has come home to roost in a market where revenues are falling. It is just unfortunate how much of a hit this is to player salaries due to previous largesse. It's the double whammy of paying the players a percentage of decreasing revenue and lowering the amount they spend to the actual percentage agreed upon. The players will largely suck it up and deal with it. The lure of playing for the Wallabies, particularly with a World Cup next year looms large and not many players will want to miss out on that opportunity.

None of that explains how they'll make themselves financially sustainable if they end up getting dragged into a ruinous deal with SANZAR... player pay cuts and admin cuts aren't going to save the ARU at this stage.

 

[Braveheart81]

A lot of that is novelty value I reckon. The NFL got 90k to watch them at Wembly in London last year, so I don't know if those one off games against world famous opposition tell you too much. Soccer is doing alright, but I reckon that stat is misleading given a lot of the other ones (over-all crowd averages, TV viewing figures for the A-League etc)

None of that explains how they'll make themselves financially sustainable if they end up getting dragged into a ruinous deal with SANZAR. player pay cuts and admin cuts aren't going to save the ARU at this stage.

I think European football has a huge following in Australia. I would guess that I see more Man U, Liverpool and Chelsea shirts than any Australian sporting team on the street.

If you go into Sydney or Melbourne on the night of the FA Cup Final (for example the 2012 one where Chelsea beat Liverpool) there are massive crowds waiting to get into venues to watch the games.

What is this supposed ruinous deal that SANZAR will do? SANZAR might be looking to expand but they'll also be looking to increase their TV rights deal. There is nothing to suggest that the next deal won't be substantially bigger than the previous deal as has happened previously in Super Rugby and in every other sport.

You are making it sound like SANZAR is trying to go broke and the ARU needs to distance themselves from that. The ARU is the only entity that is in financial distress. The other parties are doing fine.

You could argue that much of Australian rugby's problem is that the ARU has been significantly overpaying players and administrators for a decade and that problem has now come home to roost.

 

[TahDan]

I think European football has a huge following in Australia. I would guess that I see more Man U, Liverpool and Chelsea shirts than any Australian sporting team on the street.

If you go into Sydney or Melbourne on the night of the FA Cup Final (for example the 2012 one where Chelsea beat Liverpool) there are massive crowds waiting to get into venues to watch the games.

There is quite a bit of it these days isn't there? As a kid in the early 90s it was all NBA, but it's shifted to the Premier League for some reason now. Funnily enough it's one of the reasons a lot of people thought the A-League would fail too; that people wouldn't bother watching a 'lower league'.

Personally I can't stand seeing random Aussies wearing Man-U or Liverpool jerseys... just the very definition of bandwagoners. Sport is about identity, and you ought to support where you're from and/or where you get your bread and butter. Those soccer clubs have absolutely nothing to do with anything in Australia, and I just roll my eyes when I see people wearing those jerseys here. There's seriously an element of cultural cringe in it I reckon.

What is this supposed ruinous deal that SANZAR will do? SANZAR might be looking to expand but they'll also be looking to increase their TV rights deal. There is nothing to suggest that the next deal won't be substantially bigger than the previous deal as has happened previously in Super Rugby and in every other sport.

You are making it sound like SANZAR is trying to go broke and the ARU needs to distance themselves from that. The ARU is the only entity that is in financial distress. The other parties are doing fine.


You could argue that much of Australian rugby's problem is that the ARU has been significantly overpaying players and administrators for a decade and that problem has now come home to roost.

The problem is, with viewing figures and crowds on the decline here, how do you justify a bigger TV deal? Which network is going to look at the falling figures and say they think its worth more? Particularly when the SARU are looking to dilute the product further ...

In terms of their overall strategic position in the Australian Football landscape, it's currently a massive disadvantage that the ARU not only has a product to sell for less of the year, but when Super Rugby IS on, it's effectively on for half the time the NRL, because there's only prime time games on Friday and Saturday for the most part.

 

[Braveheart81]

Personally I can't stand seeing random Aussies wearing Man-U or Liverpool jerseys. just the very definition of bandwagoners. Sport is about identity, and you ought to support where you're from and/or where you get your bread and butter. Those soccer clubs have absolutely nothing to do with anything in Australia, and I just roll my eyes when I see people wearing those jerseys here. There's seriously an element of cultural cringe in it I reckon.

The problem is, with viewing figures and crowds on the decline here, how do you justify a bigger TV deal? Which network is going to look at the falling figures and say they think its worth more? Particularly when the SARU are looking to dilute the product further .

In terms of their overall strategic position in the Australian Football landscape, it's currently a massive disadvantage that the ARU not only has a product to sell for less of the year, but when Super Rugby IS on, it's effectively on for half the time the NRL, because there's only prime time games on Friday and Saturday for the most part.

I think you'd be genuinely surprised how many people in Australia actually care about the EPL and/or European Football. I think to a reasonable degree, the A-League gets fans attending based at least partly on their love of European football and it being the closest thing they have available live.

The flipside of Super Rugby being on for less of the year is that test rugby is where the ARU actually makes money. The long test season is the driving force behind the ARU's revenue.

Whilst average crowds have dropped in the last few years, TV ratings have increased in SA and have remained fairly steady in NZ and Australia from what I can gather. When the status quo in every sports broadcasting deal around is that the same content is selling for more year on year, SANZAR should be expecting more money next time around.