Bigger and beefier
France is to host the Rugby World Cup later this year, with a tweaked format and featuring more teams than ever. The increased spectacle illustrates just how popular – and lucrative – the game has become around the world.
Following a recent World Rugby Council meeting in Dublin, World Rugby (WR) announced the host nations for all the World Cups from 2025-33. It was confirmed that Australia will host the men’s World Cup in 2027, and in 2031, for the first time, the sport’s showpiece will take place in the USA.
The governing body regards North America as an area of untapped potential in both a commercial and sporting sense. According to research from Nielsen, rugby is already the fastest growing sport in the United States, and with over 45m fans, the USA is the nation with the largest number of fans in the world.
New tactics
Entering a new market is a great way to increase revenue and expand the pool of potential rugby players and viewers for WR, whose revenues mostly come from the World Cup.
WR runs a four year business revenue cycle and relies on World Cups for 80% of its revenue during that period.
The 1995 World Cup in South Africa generated $USD 38m (£30m) in total revenue, which increased by 131% to $87m in 1999, when Wales hosted.
Revenues peaked at $472m when Japan hosted the 2019 World Cup with nearly $5bn generated in economic output, according to The Economic Impact of Rugby World Cup 2019 report, published by Ernst & Young.
The money scrum
A large part of the sport’s officials’ revenue is generated by charging host nations a tournament fee which forms part of a package that the host nation submits in their bid.
These tournament fees have risen astronomically over the years and nations now have to to make a minimal financial guarantee of $150m to World Rugby.
For this year, France put together a package worth in the region of $540m. Their total guarantee to World Rugby was $185m which exceeded the minimum fee by $35m, alongside offering to buy the hospitality programme and marketing rights from World Rugby for a combined $122m and pledging $256m to cover tournament expenses.
Japan was wildly successful with over 850 million people tuning in to watch around the world through 28 broadcasters. World Rugby revealed a record 99.3% attendance across the tournament and the final saw a phenomenal attendance of 70,103.
Meanwhile, Rugby participation in the US has grown by 350% since 2004 and college rugby is the fastest growing sport in the US, with over 33 million people either playing or interested in rugby. The USA has pledged $500m towards hosting the men’s and woman’s tournaments, with organisers optimistic of generating $1bn in revenue from ticket sales alone.
Our take
The Rugby World Cup and the financial clout it now commands exemplifies just how much the sport has infiltrated and been taken on by new countries and regions.
As well as the heartlands of rugby in Europe, the Antipodes and South Africa, nations in Asia, Africa and the Americas are increasingly joining the fray.
So for investors and sports fans, it’s certainly a game to watch … as well as watch!