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Declining participation and ARU plans for the future

half

Alan Cameron (40)
7083 If its money then we are doomed. Dru has a point, but equally our community engagement seems when compared not at the level of other codes.

Back to money and it is important, our earnings per Super team are when compared to League and AFL low.

60 million over 5 teams is 12 million per team plus Internationals.
League 360 million over 16 teams is 22.5 million per team
AFL 400 million per team over 18 teams is 22.2 million per team.
AFL crowds over 6 million at say $ 25.00 is 150 million
NRL crowds over 3 million at say $ 25.00 is 75 million.

If we compare to Soccer its different they run a low cost league, and 9 national teams, a 700 + club knock out competition, and an Australian men’s and women’s, league.

Soccer does this on a 40 million dollar media deal or 4 million per team and a 2 million gate using the same $ 25.00 per ticket is 50 million.

So where does leave Rugby.
What’s our Super Gate say 500, 000 @ say a premium to the others say $ 35.00 per ticket
AFL gate 6 million at $ 25.00 is 150 million.
NRL gate 3 million at $ 25.00 is 75 million
Soc gate 2 million at $ 25.00 is 50 million
ARU gate .5 million at $ 35.00 is 17.5 million

From an article I read last year and recall. Sponsorship direct to the governing bodies
AFL 57 million
Soc 48 million
ARU 29 million
NRL 27 million

Plus individual Club sponsorships which I understand the AFL average over 5 million per club.

We suffer because of our low number of local games and our cost base is on the high side.

Whatever way its measured, if money is a measure, the lack of teams has a huge is to weak a word effect. We have not even discussed shirt sales, caps etc.

At some point we need to expand or become too tiny to care about. Full page article in today’s Herald about a new RL Perth team, when added to Perth Glory who have re-found their former self meaning the cough cough cough strong Force will have more competition for the non AFL fan.

TWAS I do appreciate all your logic. However for me we have 5 teams with the Force and Rebels in trouble. We can’t go back anymore to less teams but we need to add them.

League a second Brisbane and Perth is being talked about, that will help the Force and Reds for sure, as will if as predicated the A-League expands to southern Sydney around Kogarah and a second Brisbane team.

The other thing is Soccer is in the middle of their next media deal the 40 million could increase.


Every bone in my body says, expand, and take over ourselves.
 

7083

Allen Oxlade (6)
half,
thanks for your articulate input. Gotta say it's much better than dru. Totally agree we must have teams increased in Super rugby. More exposure equals more participation. But if the ARU are only going to harvest from the upper end of town that can afford the massive participation fees for rep programmes we're not going to go anywhere. we need to break back into the public schools and the only way to do that is with players going to them and the ARU chasing more sponsorship to throw the money required at said schools. and that's not horse shit! ;-)
 

Strewthcobber

Andrew Slack (58)
The problem being that the ARU make the bulk of their money from the Wallabies, not the Super Rugby teams.

The national team subsidise the other pro teams.

(See the 2012 annual report for details under the previous TV deal - they haven't split the current one as far as I know, so it's anyone's guess.) Back then it was 60/40 Wallaby v Super Rugby TV revenue split.

So increase the number of (less popular) teams, costs go up more than revenue does and you actually have less money for development etc.
 

kiap

Steve Williams (59)
Every bone in my body says, expand, and take over ourselves.

Suspect I would part ways fairly quickly when you start drilling down on some of these plans. :)

But I'm giving you a "like" as another rugby fan looking at ways for Australian rugby to move ahead.
 

half

Alan Cameron (40)
Most would be aware of my thoughts in that we need to take back control of our domestic competition. Run the Tri nations and other international as we do now. I am not alone in this view although I admit to be being very much in the minority.

The current ARU position is to work through SANDAAZR with Super Rugby and the Tri Nations providing our structure. Beyond this having a number of smaller clubs who are self-funded develop and via the NCR responsible to develop a national domestic competition that in time will be similar to the Curry Cup [that’s the hope anyway].

Some issues bubbling away in the back ground is quality players moving to Europe, the revenue and growth of new competition i.e soccer and netball and basketball, revenue of the NRL and AFL, GPS / CAS / Selective schools losing ground

The attached vid is roughly a year old and from Ch 9 in Melbourne, its essentially about AFL / soccer, however it shows what we are up against and in one part of the story the head of the AFL says they will spend 80 million at junior level to counter soccer. Funds we could only dream of

I would be interested in where people see the future say 15 year out i.e. advantages in the SANDAAAZ model especially to the point of getting the best young players into rugby. Also the views of those who think I am right, what can taking back control do for us.


In a way our own little Brexit, stay or leave .

PS
kiap
Thanks for the reason for the like
 

Gnostic

Mark Ella (57)
The problem being that the ARU make the bulk of their money from the Wallabies, not the Super Rugby teams.



The national team subsidise the other pro teams.



(See the 2012 annual report for details under the previous TV deal - they haven't split the current one as far as I know, so it's anyone's guess.) Back then it was 60/40 Wallaby v Super Rugby TV revenue split.



So increase the number of (less popular) teams, costs go up more than revenue does and you actually have less money for development etc.



Indeed in the short term it would be a increase in costs with an at best modest rise in revenue from TV type deals as we have had. It will be very interesting to see what happens next year. I regard myself as a total rugby fanatic, but by midway of the Super Rugby this year I was only watching the NZ sides and the Australian sides. I haven't watched a game of the SA and Direwolves (TM) and Jaguares not involving those sides in a decent time slot since. I have stopped even recording them. The NZ sides I watched for quality and the Australian sides from a sense of parochial pig headedness. However last weekend I found myself doing my fourth quarter BAS with the game in the background I had gotten so bored.

So if I as a rusted on fanatic have lost interest because of the woeful quality what will be the outcome with further expansion? I wonder if the current expansion will actually result in the increased sales the broadcasters need to sustain their increased purchase price for the product. Does expanding the market to new areas increase the sell enough to compensate essentially destroying the old base? This is on top of a environment where the Reds have collapsed back to their pre-2010 levels of support, the Tahs haven't recovered from Foley/Hickey and the Force have again been terrible while the Brumbies have done what they can to disillusion their locals with their questionable financial dealings.
 

WorkingClassRugger

David Codey (61)
Indeed in the short term it would be a increase in costs with an at best modest rise in revenue from TV type deals as we have had. It will be very interesting to see what happens next year. I regard myself as a total rugby fanatic, but by midway of the Super Rugby this year I was only watching the NZ sides and the Australian sides. I haven't watched a game of the SA and Direwolves (TM) and Jaguares not involving those sides in a decent time slot since. I have stopped even recording them. The NZ sides I watched for quality and the Australian sides from a sense of parochial pig headedness. However last weekend I found myself doing my fourth quarter BAS with the game in the background I had gotten so bored.

So if I as a rusted on fanatic have lost interest because of the woeful quality what will be the outcome with further expansion? I wonder if the current expansion will actually result in the increased sales the broadcasters need to sustain their increased purchase price for the product. Does expanding the market to new areas increase the sell enough to compensate essentially destroying the old base? This is on top of a environment where the Reds have collapsed back to their pre-2010 levels of support, the Tahs haven't recovered from Foley/Hickey and the Force have again been terrible while the Brumbies have done what they can to disillusion their locals with their questionable financial dealings.


You should really have tried to watch the Sunwolves. Particularly their early to mid season games before all the travel and inexperience caught up with them. They played some outstanding Rugby.

As for the losing interest thing. I'll freely admit I've had a bit of a down year with all Rugby this season. If as has been the case several times this year, I had to miss a game opposed to previous years I haven't been all that bothered. I will freely admit that a lot of that stems from the high of the RWC and the lacklustre performances from the Aus Super Rugby franchises following it. Personally, I think as a fan I'm only now really overcoming the funk left by the RWC being in general so fantastic while our domestic performances haven't quite built on it.

It's why I'm looking forward to the NRC. Something positive.
 

Gnostic

Mark Ella (57)
I have been watching the Shute Shield and have generally enjoyed the rugby. My thoughts on the NRC are very well know so I won't bother reposting them here again.

My malaise isn't just the bad Australian results but the manner of them, the backroom rubbish at three out of five franchises, the rubbish structure of Super Rugby this year as well as the very poor fare from the SA conferences.

My own local Rugby crowd has further shrunk so that locally I am now the only person with a Foxtel subscription. Admittedly I live in a smaller sized country town, but even my extended business network around here has a lot of people who used to follow the game but it has steadily declined.

My views are obviously coloured from personal experience and without doubt my own demographic, but it all plays into the sustainability of the competition and ARU business model in the medium let alone long term.
 

wamberal

Phil Kearns (64)
The ARU really needs to do some market research. Gnostic's views are similar to my own.


I just cannot see a way forward. We were able to survive as an amateur code, and we did pretty well in the first phase of professionalism, partly because of the Super League wars, partly because the Wallabies were pretty successful, as were the Brumbies in particular, and we made the transition to professionalism better than any other nation.


The simple truth is that for a professional game to survive here, we have to generate enough revenue to meet the costs of running (and developing) the game.


No doubt we can still rely for a while yet on the free inputs of GPS schools and the district clubs. But these inputs are diminishing in quantity, and arguably in quality.


I was very optimistic that this year would be a turning point, led by a rising Wallabies side (and with the counterpoint of a dimished New Zealand, at both Soup and national level, with the turnover of star players).


It now looks as though New Zealand rugby, far from being dimished, has actually gotten much stronger after the post-RWC pruning. So we almost certainly cannot look forward to a successful RC.


We desperately need a turning point, some master stroke that will regenerate interest in the game. The last one was had was Izzy's signing, and that was accidental. Does anybody else lie in bed at night and wonder where we would be if he had gone to the Eels?


Market research might give the leaders of our game some insights into what the actual and potential playng and supporting market is, and what the market really wants. Not too radical a thought, is it?
 

half

Alan Cameron (40)
wamberal

You make some reasonable points.

I don't have faith in SANDAAZA to look after our local district issues and its from our local districts all else essentially flows.

I don't have faith neither in the ARU as it is currently to be in any position to develop pathways and quality players.

We are faced with a very difficult choice and both have fatal risks. The first is to hope what we are doing now will give time for the NRC to turn into a Curry Cup.

The second is to walk away from Super Rugby, keep the Tri Nations and for the ARU to set up a 8 to 10 team national competition. Arguably add 8 NZ sides as well.

My choice is two, big drop in revenue but that can be rebuilt.
 

Gnostic

Mark Ella (57)
Sustainably one has to ask the question from a macro economics viewpoint. Does trickle down economics work long term? That is the current ARU structure.

As an avid reader and fan of writings of Thomas Pickety and Joseph Stiglitz I am firmly of the view that trickle down does not work and the rising tide doesn't lift all boats long term.

Indeed if we look at Australian Rugby since 1996, has the game at the grass roots grown, and done so consistently and sustainably over that period? I think the answer like that for the economic arguments of the two authors I mentioned is pretty obvious. It is tied intrinsically to the success of the Wallabies, and to a lessor degree to the Super sides. In a very competitive environment in both the competitions themselves and the market the downside risks of this tactic are just horrendous and the short term gains from the successes we have seen cannot sustain the long term averages. The ARU has a fundamental problem with their top down model in that basically the roots have withered and are barely supplying the players to the squads now, and perhaps more importantly the fans are no longer spending their coin and watching the top tiers. This will eventually hit the broadcasting revenue even if there is a lag as the competition expands into new markets and gains new customers in those markets. How long that stagnant/minor growth offsets the contraction of the mature "old" market is a big question.

The fundamental disconnect between the pro game and its fan base and player development pool has the potential to be fatal.
 

Braveheart81

Will Genia (78)
Staff member
Sustainably one has to ask the question from a macro economics viewpoint. Does trickle down economics work long term? That is the current ARU structure.

As an avid reader and fan of writings of Thomas Pickety and Joseph Stiglitz I am firmly of the view that trickle down does not work and the rising tide doesn't lift all boats long term.


This is closer to a progressive tax system than trickle down economics though.

The ARU is generating it's revenue at the top and feeding down as much of that as possible to the levels that can't generate the revenue they need.

The challenge is to make sure they aren't spending too much of that revenue on the players at the top who generate it and that the money that does flow down is directed to the areas that will ultimately provide long term benefit (i.e. the grassroots).
 

papabear

Watty Friend (18)
comparing revenues of the aus rugby sides against afl/nrl isn't apples for apples though as aus rugby would have a much much lower cost side.

1 - the nrl/afl salary cap are going to blow out with the tv deals.
2 - aru only have to pay 5 squads as opposed to 16/18.

Honestly though, if I was heading up WR (World Rugby) I would be looking at ways to integrate all the competitions including rugby league, touch and tag under one banner, then moving to as homogeneous rules as possible for the three different levels of physicality in each game of touch tag and contact.
 

Strewthcobber

Andrew Slack (58)
[
The simple truth is that for a professional game to survive here, we have to generate enough revenue to meet the costs of running (and developing) the game.


No doubt we can still rely for a while yet on the free inputs of GPS schools and the district clubs. But these inputs are diminishing in quantity, and arguably in quality.
This is where I get hung up too, and it's why I have no optimism for rugby over the long term in this country - I think we will essentially have no international players in our domestic leagues in the medium term, and hence will be picking all Wallabies from OS.

We can get to that position relatively slowly and solvently by muddling along with the current setup and cobbling together enough money to pay the salaries to compete with Eurpoe/Japan (Which are going to go up).

Or we can reach that point quickly and bankruptly by blowing everything up and trying to set-up our own large scale domestic league.

Fundamentally, Australians aren't willing to part with enough money to pay the salaries that our professional players demand. And the pro players are the ones who earn the income that funds everything else. As they inevitably head OS to earn more money, where does that leave the rest of the sport in this country?
 

Gnostic

Mark Ella (57)
This is closer to a progressive tax system than trickle down economics though.



The ARU is generating it's revenue at the top and feeding down as much of that as possible to the levels that can't generate the revenue they need.



The challenge is to make sure they aren't spending too much of that revenue on the players at the top who generate it and that the money that does flow down is directed to the areas that will ultimately provide long term benefit (i.e. the grassroots).



It's revenue still comes from the fans and consumers and is distributed at the top, with much of the growth being totally absorbed by the top. The TV deals exist because of the consumers at the bottom. I understand how you would liken it to a progressive tax, but it is based on a shallow examination of the revenue source. How long will the TV deals survive the contraction of the revenue base for those broadcasters.

Do not get me wrong, the players must be paid, and paid competitively, but at the same time we must truly grow the base. Growth at the top is meaningless when it is not quality product.
 

Quick Hands

David Wilson (68)
It's revenue still comes from the fans and consumers and is distributed at the top, with much of the growth being totally absorbed by the top. The TV deals exist because of the consumers at the bottom. I understand how you would liken it to a progressive tax, but it is based on a shallow examination of the revenue source. How long will the TV deals survive the contraction of the revenue base for those broadcasters.

Do not get me wrong, the players must be paid, and paid competitively, but at the same time we must truly grow the base. Growth at the top is meaningless when it is not quality product.

You've correctly identified the shrinking base as the big problem facing the game. It's only just hitting the game at the elite level, but the base has been in decline for 20 years. It was masked for a while by success at the top and by some creative manipulation of participation figures by double and even triple counting the same players, counting players who participated in one-off gala days etc. Add to this that participation has been also declining (more slowly though) in the private school system.

Less fans at the bottom, less money spent on merchandise, fewer people going to and/or watching games on TV, fewer parents to introduce their kids to the game and an elite player pool drawn from an increasingly smaller and smaller base (which must affect the number of talented players available for higher honours). Difficult to see how we can beat countries like NZ (with their access to most talented athletes in the country) and England with their huge player base and multi million pound development programme.
 

half

Alan Cameron (40)
Strew / Wam / Gnos

If I am reading your posts correctly we are in a non reversible down-would spiral that can be slowed down but not stopped.

I guess I am saying we are heading towards this point and you are saying we are past this point. Or have I not fully understood your posts.
 

Quick Hands

David Wilson (68)
Strew / Wam / Gnos

If I am reading your posts correctly we are in a non reversible down-would spiral that can be slowed down but not stopped.

I guess I am saying we are heading towards this point and you are saying we are past this point. Or have I not fully understood your posts.

The jury is still out, but it will be a long hard road back from where we are now.
 
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