Private ownership in rugby

Winters

http://www.irishtimes.com/sport/rugby/irfu-highlight-threat-of-france-s-greater-financial-muscle-1.1871217

The IRFU reaffirmed that one the biggest threats to financing the game in Ireland is competition from teams in France with greater financial muscle. The fear is that Irish teams may become less competitive, which would have a hugely negative effect on union income.
The IRFU are also exploring the possibility of attracting private money to aid the funding of the sport.

I felt this deserved its own thread.

It's rather concerning that the IRFU feel the need to also explore this model which I believe will only do more bad than good in the long term. Private revenue never comes without strings attached at some point.

Sadly it seems that the IRFU are looking at the French and English models with a degree of "if you can't beat 'em join 'em".

It indeed worries me that the lapse regulation by the RFU and FFR and also the WRU have allowed the private ownership model get out of control and start to unbalance rugby in other countries.

The damage will only get worse.

twinytwo

Winters wrote: »

http://www.irishtimes.com/sport/rugby/irfu-highlight-threat-of-france-s-greater-financial-muscle-1.1871217



I felt this deserved its own thread.

It's rather concerning that the IRFU feel the need to also explore this model which I believe will only do more bad than good in the long term. Private revenue never comes without strings attached at some point.

Sadly it seems that the IRFU are looking at the French and English models with a degree of "if you can't beat 'em join 'em".

It indeed worries me that the lapse regulation by the RFU and FFR and also the WRU have allowed the private ownership model get out of control and start to unbalance rugby in other countries.

The damage will only get worse.

Ironically for all the finanical weight that france and england have..Munster should have made the last 2 HC finals. The majority of English clubs are a farce and outside of Toulon all the French clubs are easily beatable... I'm totally against the privatisation of rugby... If the irfu goes private they might as well just sell the whole lot.

bilston

twinytwo wrote: »

Ironically for all the finanical weight that france and england have..Munster should have made the last 2 HC finals. The majority of English clubs are a farce and outside of Toulon all the French clubs are easily beatable... I'm totally against the privatisation of rugby... If the irfu goes private they might as well just sell the whole lot.

The English haven't really had any financial weight up until now. I'd say this coming season will be the first time we've seen them able to show off the results of their new found financial muscle thanks to BODs mates at BT. It will be interesting to see the results.

former legend

This is a non - story, the IRFU are no more likely to allow private ownership of the provinces than I am to grow a third leg.

19543261

Attracting private money doesnt necessarily mean private ownership.

former legend

19543261 wrote: »

Attracting private money doesnt necessarily mean private ownership.

Yeah you're right. But if the story is that IRFU want to attract more sponsorship, sell more naming rights or get other streams of commercial revenue going, that's hardly news either.

19543261

It's kind of significant for them to publicly express concern about the money in France/England, I'd have thought. Unless they've said so before now.

thomond2006

I think the handbags and warring in Welsh Rugby serves as a warning to us.

Risteard

thomond2006 wrote: »

I think the handbags and warring in Welsh Rugby serves as a warning to us.

WRT to financial troubles or a possibility of provinces wanting more autonomy?

spillit67

Private ownership would only come underneath the umbrella of the IRFU and any sane investor will look at sports and see that is the only profitable route for a league as a whole. The IRFU system works, as a pyramid it feeds development of players and attachment of stakeholers to the professional game. This is the case in England too- the clubs have come together as one and negotiate as such. Sharing cash and making the sport even is the best way. The problem in rugby is that unlike the NFL we don't have an even system. I do think Irish rugby would still be an attractive investment for a person who has their eyes open and doesn't look at a team like a toy. That means the current IRFU model, top down, all 4 provinces working together. A strong national side (i.e. ownership not going the Top 14 route). All of that feeds interest in the game in Ireland and brings punters in.

former legend

thomond2006 wrote: »

I think the handbags and warring in Welsh Rugby serves as a warning to us.

Not really tbh, it's possibly more a vindication that the IRFU got their model right and Wales didn't but that's an accident of history and geography as much as anything else.

As I said above, the IRFU won't be interested in getting private equity owners on board and there's nothing in that article that suggests they are.

thebaz

in the 1990's , before the Heineken Cup, when the AIL league ruled, there was a fair bit of private investment in the game , certainly in Dublin - Dennis O'Brien loves his rugby ; there were rumours recently that Rory was financing Ulster - - the likelihood is that private investment will creep into the game , I would think , especially if we want to keep the best at home.

phog

thebaz wrote: »

in the 1990's , before the Heineken Cup, when the AIL league ruled, there was a fair bit of private investment in the game , certainly in Dublin - Dennis O'Brien loves his rugby ; there were rumours recently that Rory was financing Ulster - - the likelihood is that private investment will creep into the game , I would think , especially if we want to keep the best at home.

I'd be shocked if JP McManus hasn't invested in Munster Rugby or Thomond Park and hasn't Leinster a benefactor that coughed up for their training base or such like.

I doubt the IRFU are considering letting a province go it alone but selling the likes of stadium rights, individual player sponsorship and other sponsorship would probably be welcomed with open arms.

Kirk Van Houten

phog wrote: »

I'd be shocked if JP McManus hasn't invested in Munster Rugby or Thomond Park and hasn't Leinster a benefactor that coughed up for their training base or such like.

I doubt the IRFU are considering letting a province go it alone but selling the likes of stadium rights, individual player sponsorship and other sponsorship would probably be welcomed with open arms.

McManus put 4 million towards the redevelopment of Thomond Park.
David Shubotham put 2.2 million towards the new training and gym facilities in UCD.
Most of the money that people were attributing to Rory in Ulster was in fact additional funding from the IRFU. I believe that additional funding is no longer in place and according to Paul McNaughton was used primarily to fund signings.

former legend

The more I think about this, the more convinced I am that it is a warning shot to the public about the possibility of TV coverage of internationals being sold to the highest bidder.
Current TV deals for Six Nations and November games expire in 2017 but the list of events that must be free to air is up for review I think, so a warning to our new minister for sport too perhaps.

twinytwo

thebaz wrote: »

in the 1990's , before the Heineken Cup, when the AIL league ruled, there was a fair bit of private investment in the game , certainly in Dublin - Dennis O'Brien loves his rugby ; there were rumours recently that Rory was financing Ulster - - the likelihood is that private investment will creep into the game , I would think , especially if we want to keep the best at home.

I dunno about you but I wouldn't want O'Brien affiliated with any of the provence's in any way.

justsomebloke

Unless the provinces find ways to keep winning the top level European competition the gulf in spending power is going to keep getting wider and wider. The IRFU will have see it's spending budget go down at a time when the cost of everything is sky rocketing around it and this is just the IRFU letting people know that their expectations of things may have to change.

Either they this is just the IRFU letting people know that they will have to come up with 'novel' ways of getting more money into the game that people mightn't exactly be kosher with, or people have to lower their expectations of the level that we can compete at.

thomond2006

Improving interest and attendance in the Pro12 is one way of getting in some money. Munster must have been raking it in when 20,000+ were attending league matches in Limerick.

Do Ireland season tickets exist? Putting the autumn internationals and Six Nations matches in a bundle with a discount, say 25%, could be a good way of getting some cash in before the season begins. I think they would be quite popular, in particular for the Six Nations years when we host France & England.

Heroditas

thomond2006 wrote: »

Improving interest and attendance in the Pro12 is one way of getting in some money. Munster must have been raking it in when 20,000+ were attending league matches in Limerick.

Do Ireland season tickets exist? Putting the autumn internationals and Six Nations matches in a bundle with a discount, say 25%, could be a good way of getting some cash in before the season begins. I think they would be quite popular, in particular for the Six Nations years when we host France & England.

They don't need to offer discounts because the 6N games always sell out anyway.
I'm sure they can manage the cashflow for each individual season so they don't need to flog tickets at a discount up front to get some early cash in.

thomond2006

Heroditas wrote: »

They don't need to offer discounts because the 6N games always sell out anyway.
I'm sure they can manage the cashflow for each individual season so they don't need to flog tickets at a discount up front to get some early cash in.

Yeah fair point.

thebaz

twinytwo wrote: »

I dunno about you but I wouldn't want O'Brien affiliated with any of the provence's in any way.

he's helped Irish cricket and Irish soccer - he polarises opinions , and I've heard good & bad - one thing for sure he has financial muscle , which might help as the game becomes more professional , just a fact of life - for better or worse.

justsomebloke

thomond2006 wrote: »

Improving interest and attendance in the Pro12 is one way of getting in some money. Munster must have been raking it in when 20,000+ were attending league matches in Limerick.

Yes but the problem is public interest wanes, especially at pro12 level, when European crowns aren't being won. Munster are feeling that now and Leinster will start feeling it over the next season or 2.

jm08

justsomebloke wrote: »

Yes but the problem is public interest wanes, especially at pro12 level, when European crowns aren't being won. Munster are feeling that now and Leinster will start feeling it over the next season or 2.

You are always going to get a spike in attendances when you have a new stadium, especially from other clubs as well. Last season Leinster returned tickets for their game down in Thomond Park, whereas a few years previous to that, they couldn't get enough tickets.

I don't think the interest in European games has waned, bearing in mind the capacity of Thomond Park has doubled.

CIARAN_BOYLE

thomond2006 wrote: »

Improving interest and attendance in the Pro12 is one way of getting in some money. Munster must have been raking it in when 20,000+ were attending league matches in Limerick.

Do Ireland season tickets exist? Putting the autumn internationals and Six Nations matches in a bundle with a discount, say 25%, could be a good way of getting some cash in before the season begins. I think they would be quite popular, in particular for the Six Nations years when we host France & England.

10 year season tickets are around, other than that no.

cp

I'm often bemused about the panic Irish rugby fans exhibit whenever private money is mentioned. The IRFU is in itself a private members organisation and private investment isn't objectively a bad thing.

Not all investment needs to come in the form of megalomaniac robber barons who see owning a sports team as an extension of their manhood. The challenge here is in finding a model that fits Irish rugby.

Look at what the Chiefs in super rugby have done; as I understand it, the organisation is run in a partnership between he local union and a consortium of local investors who can see the financial benefit of having a professional sports franchise in their local community.

No reason not to explore models like this for the IRFU, whilst also being open to the kind of philanthropic injections that some of the provinces have been able to secure in recent years.

I suspect that's what's really being explored here. There's no chance of the IRFU ceding control of their carefully managed and developed structure. Not just yet anyway.

padser

twinytwo wrote: »

Ironically for all the finanical weight that france and england have..Munster should have made the last 2 HC finals. The majority of English clubs are a farce and outside of Toulon all the French clubs are easily beatable... .

I think it's naive in the extreme to think that in the medium term having more money than your competitors and then using that money to attract more and better players doesn't lead to you being a better team than your competitors.

It would be nice to that teams can remain competitive by being "better run" and having a strong "culture" etc but the reality is that (occasional and normally short lived deceptions aside) the teams with the most money in sport eventually start coming out on top....

Winters

This is a topic intrinsically linked with the European Cup issues and caused greatly by financal doping by private owners.

A new article by David Kelly today:

http://m.independent.ie/sport/rugby/champions-cup/anglofrench-arms-race-threatens-to-leave-provinces-in-hapenny-place-30658468.html

former legend

While it's not sustainable in the long term to have private benefactors underwriting operating losses, the increasing values of TV deals might mean it's no longer needed.

Pump more money in > sign more superstars
> get more people watching > increased value of product > get return on investment.

If beIn are back in the game for Top 14 rights now, the clubs might be seeing another jump in their income.

The other side of it is that we have no idea what the provinces' wage bills are so direct comparison is difficult, but the counter argument would be that they are effectively subsidised by the union which is an unfair advantage for us.

former legend

former legend wrote: »

While it's not sustainable in the long term to have private benefactors underwriting operating losses, the increasing values of TV deals might mean it's no longer needed.

Pump more money in > sign more superstars
> get more people watching > increased value of product > get return on investment.

If beIn are back in the game for Top 14 rights now, the clubs might be seeing another jump in their income.

The other side of it is that we have no idea what the provinces' wage bills are so direct comparison is difficult, but the counter argument would be that they are effectively subsidised by the union which is an unfair advantage for us.

That's akin to the mortgage advisor's advice in 2005/2006.
Bubble building

The TV companies are paying more than the value of contracts in order to battle each other for subscriptions. Is that to be an eternal struggle with bottomless pit pockets?

I think not, and I think that Gamepass/League Pass (NFL & NBA) and its' derivatives and followers will scare the ****e out of the TV companies from breaking the bank over the next 8-10 years.

Now, a direct competition broadcast service might actually be more lucrative for the club owners and league executives as by removing the middle man (broadcasters) they can extract more value than they currently can (without the OTT competition spend included). But that's a pretty big maybe.

irishbucsfan

I agree that there is a bubble, in that there are guys who show up and expect a return on their investment within a short space of time and could easilly leave the next day (Wasps ownership, Lorenzetti etc.). I don't think that necessarily applies to Craig but it is certainly true of others. It's definitely not a sustainable model to just keep spending and spending like Lorenzetti or Boudjelal, but the likes of Gloucester (maybe Bath, not sure about their bottom line) are spending money while breaking even so they should be OK. That's the model of successful and responsible private ownership and those are the types of clubs who will be able to sustain. More common in the Premiership than the Top 14 currently, possibly because the Top 14 is more attractive to the playboy billionaire types.

As for direct media subscriptions, I fully expect EPCR to at least pursue that as a possibility in a couple of years time.

former legend

Deleted User wrote: »

That's akin to the mortgage advisor's advice in 2005/2006.
Bubble building

Ugh.

Deleted User wrote: »

The TV companies are paying more than the value of contracts in order to battle each other for subscriptions. Is that to be an eternal struggle with bottomless pit pockets?

I think not, and I think that Gamepass/League Pass (NFL & NBA) and its' derivatives and followers will scare the ****e out of the TV companies from breaking the bank over the next 8-10 years.

Now, a direct competition broadcast service might actually be more lucrative for the club owners and league executives as by removing the middle man (broadcasters) they can extract more value than they currently can (without the OTT competition spend included). But that's a pretty big maybe.

See, you've contradicted yourself there. The club owners won't sign up to a game pass system unless it brings in more money than the TV deals.

Also, the threat of such a service should, in theory, get the TV companies to pony up more cash to retain exclusivity, no?

The NFL is probably the best example of the 'game pass' system; their last batch of TV rights went for a 60% increase on the previous round, so it does not automatically follow that an on-demand service will lead to a collapse in TV revenue.
(Yes, I know the Top 14 is not the NFL).

thomond2006

I'd love a game pass system, particularly if the unions could come to an arrangement where all the domestic leagues as well as European matches would all be available.

former legend

former legend wrote: »

Ugh.

yes?

former legend wrote: »

See, you've contradicted yourself there. The club owners won't sign up to a game pass system unless it brings in more money than the TV deals.

Also, the threat of such a service should, in theory, get the TV companies to pony up more cash to retain exclusivity, no?

The NFL is probably the best example of the 'game pass' system; their last batch of TV rights went for a 60% increase on the previous round, so it does not automatically follow that an on-demand service will lead to a collapse in TV revenue.
(Yes, I know the Top 14 is not the NFL).

Not a contradiction whatsoever.

The TV deals are (currently) artificially inflated by virtue that their value (not their cost) is far below what the broadcasters are paying for them. The TV companies pay a massive premium in order to "beat" the other TV company to the deal. Sky lose money on the pro12 deal. BT definitely lose money on the Champions League deal. However, they absorb these losses in the short term in order to 'capture' a customer that they hope to extract value out of. (Guy who watches Champions league on BT might decide that for £8 more per month he may as well take their BB package on too).

Your contention is that TV companies will continue to pay this premium into perpetuity. However, competition between the providers will not allow that to happen. They're not idiots. At the end of the day there will reach a point where silly season must end, and one or more of the big players decide to be content with their content.

I'm not saying there's to be a massive fall in TV revenue. I'm saying that it's not an ever increasing amount. The market will stagnate. There is a saturation point amongst other issues. When the amount starts to diminish closer to ~ 5/10% is the risk bearable?

Secondarily (but also linked), the GamePass ideal of direct provision is a threat to the TV companies. (not rugby execs). Both TV companies will be threatened by the idea that the customer could pay less for the same production, and they'd have no middle man element to remove their pound of flesh. How might EPCR or Pro12 start a direct provision service? Perhaps if they were received a massive windfall above their running costs which allowed them to invest heavily in a direct provision service?

Both of these points suggest that the year-on-year increases on TV revenues (in their current guise - Sky v BT, BeIn vs Canal+) are unsustainable in any medium-long term outlook.

If/When the direct provision approach becomes the norm, there ought to be a far more stable year-on-year increase available as the subscription numbers (hopefully) increase as the entertainment gets better.
(I agree that the T14 is hardly the NFL but I think it's probably going to be the shining light in direct provision that competitions aim to copy. Makes sense to consider it)

icdg

It's an interesting proposition but it's worth noting that these GamePass type services work only because they are showing games that are being broadcast regionally. National games, which are broadcast on the networks or ESPN, don't form part of these services. Moreover the US leagues don't have any of the costs involved in broadcasting these games apart from distribution.

This regional/national broadcast split doesn't really exist in Europe. The ECPR Champions Cup already has contracts in all but one of its core markets involving TV broadcast of all of its games in those markets. If it were to move to a direct sales situation it would have costs that these US leagues don't in producing a broadcast, including all of the pre match, half time, and post match analysis viewers in Europe have come to expect. I'm not sure it wants to be a broadcaster.

One further thing. Watch what the FA Premier League does. It is the house upon which the whole sports broadcasting industry - indeed perhaps the whole pay-TV market - in the UK and Ireland is built. It gains huge money's from its sale of rights to Sky, BT and internationally. If anyone could make a direct sales model work, it could. It already has a partnership with IMG to produce programming, so it has the broadcast infrastructure already in place to go it alone without Sky or BT. But it would effectively be making a huge bet with itself that the profits from direct sales would be greater than the income it receives from rights. Get that wrong, and it could seriously dent its income. Also if it did go down that road Sky and BT's business models would effectively be destroyed.

Winters

An interesting article from Hugh Goodwin in the UK Indo.

It's concerning Wasps but references the 'light regulation' that the RFU have over their clubs.

http://www.independent.co.uk/sport/rugby/rugby-union/news-comment/hugh-godwin-wasps-didnt-have-to-send-themselves-to-coventry-9789348.html

As an aside, just because Bruce Craig has enough money to buy a rugby club, should that give him a say in how rugby is played, administered and scheduled?

irishbucsfan

Winters wrote: »

As an aside, just because Bruce Craig has enough money to buy a rugby club, should that give him a say in how rugby is played, administered and scheduled?

It should give him a 1/14th say in how PRL administer/play/schedule their rugby. Which is all it actually gives him. Any other power he has has been granted him by virtue of other things than him owning the club.

Neil3030

Keep in mind too that when you become the broadcaster you also assume the sole responsibility of marketing your product, so that's a whole new area of expertise to either employ or outsource. I seriously doubt the soccer Premiership in England would be what it is today without Sky's involvement in this regard.

Neil3030

Neil3030 wrote: »

Keep in mind too that when you become the broadcaster you also assume the sole responsibility of marketing your product, so that's a whole new area of expertise to either employ or outsource. I seriously doubt the soccer Premiership in England would be what it is today without Sky's involvement in this regard.

Agreed 100%, but now that it is what it is...
Perhaps they're ready to get out from under their daddy's feet?

Likewise, perhaps rugby's next epoch is 10/15 years from now (depending on technology maybe even sooner).

Neil3030

Deleted User wrote: »

Agreed 100%, but now that it is what it is...
Perhaps they're ready to get out from under their daddy's feet?

Likewise, perhaps rugby's next epoch is 10/15 years from now (depending on technology maybe even sooner).

I reckon soccer could probably make a stab at it yeah. The only thing I'd wonder is how good for business it is to have competing broadcasters trying to sell the same product, as it creates a sort of implicit eulogisation of the sport. Though I suppose Sky had a monopoly in this regard for years and still did well.

Agreed that rugby is probably not quite there yet.

Winters

http://www.irishtimes.com/sport/rugby/as-european-rugby-s-new-dawn-arrives-off-field-battles-for-control-are-set-to-continue-1.1962240?page=1

Rugby fans may tire of these articles but to bury ones head in the sand now will deprive our children of the joys of supporting the sport of rugby we experienced growing up and continue to enjoy now.

Private ownership in rugby will damage it forever.

former legend

I am lolling my ass off at Gerry giving The Guardian some stick for their lack of balance in reporting.

Has the man completely lost it?

I preferred my one line response to Craig tbh.

OldRio

Good article. Agree with every word.

Swan Curry

It may be hypocritical of Gerry,but some of the Guardian's reporting during the whole fiasco was very poor.

Larbre34

Here's the Brian Moore article where he has a dig again at some of the Irish writers.

http://www.telegraph.co.uk/sport/rugbyunion/european-rugby/11157197/European-Rugby-Champions-Cup-should-produce-fireworks-from-the-start.html

However, even Moore admits the grandiose notions of Craig and his ilk should be disabused swiftly. "We've only just started" says Craig.

I hate to mix my metaphors Mr Moore, but the Genie is very definitely out of Pandora's box....

kooga

i'd love to know who brian moore spoke when he says he has spoken to pro 12 fans players and officials..................really brian you have actually possible travelled outside of england. He is one biased individual just listen to his coomentary on the bbc during the six nations.

its_phil

kooga wrote: »

i'd love to know who brian moore spoke when he says he has spoken to pro 12 fans players and officials..................really brian you have actually possible travelled outside of england. He is one biased individual just listen to his coomentary on the bbc during the six nations.

Well as much as I think Moore has written a poor article, he is right about the league being more competitive. It's not rocket science to realise that without talking to stakeholders in the Pro12. I know I was delighted with the change in qualifying procedure and wanted it from the beginning provided all nations were represented. Also suited Connacht too.

kooga

i agree the qualification process needed to change.and we should of conceded that a long time ago and quite possible the old erc may of been retained as well.

jm08

former legend wrote: »

I am lolling my ass off at Gerry giving The Guardian some stick for their lack of balance in reporting.

Has the man completely lost it?

I don't think so when you read this!

Champions Cup is just the start for ambitious Bath owner Bruce Craig
With the launch of Europe’s new club competition, Bath’s driven owner now has the global calendar in his sights

Robert Kitson
Robert Kitson
The Guardian, Friday 10 October 2014 16.38 BST
Jump to comments (29)


No wonder Bruce Craig looks quietly satisfied. His Bath side are riding high and sunshine bathes the spectacular 18th-century mansion he has transformed into the most striking training base in sport. Three years after secretly registering the “Champions Cup” as the putative title of a new club-run European tournament, the latest phase of his oval-shaped vision starts next week. Lay a white cat on his lap and he could be a Bond character eyeing world domination.

That is pretty much how some perceive him anyway. Sitting in his tasteful study overlooking the front lawns of his stately home-turned-training ground it is obvious that thinking big has never been Craig’s problem. His views on how professional rugby union is heading in the next 10 or 20 years – “We haven’t even started yet” – are unashamedly ambitious.

A global calendar, International Rugby Board “self-interest”: he still has many more battles to fight. Shining white knight or hard-nosed multimillionaire? Either way, he tends to get what he wants…...


more here ….

http://www.theguardian.com/sport/2014/oct/10/champions-cupbruce-craig-bath-european-club-tournament

former legend

jm08 wrote: »

I don't think so when you read this!

Read and discussed long ago jm08:
http://www.boards.ie/vbulletin/showpost.php?p=92562588&postcount=384

My point is that it's utter hypocrisy for Thornley to criticise the Guardian for not being impartial when he's completely devoid of any balance himself.

jm08

former legend wrote: »

Read and discussed long ago jm08:
http://www.boards.ie/vbulletin/showpost.php?p=92562588&postcount=384

My point is that it's utter hypocrisy for Thornley to criticise the Guardian for not being impartial when he's completely devoid of any balance himself.

So what should he be saying to be impartial?