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Rugby bonanza growing with game

Sep 18 2011 15:43 Vida Booysen

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Johannesburg - Rugby is slowly but surely becoming a major business - one that has the potential to pump billions into a country's economy and these days attract large brand sponsorships.

The figures say it all: The World Cup rugby tournament in New Zealand could mean up to $1.67bn (R12bn) for the global sports economy. New Zealand itself expects a total cash injection of $1bn (R7.3bn) in the long run, according to research by the Centre for the International Business of Sport (CIBS) at Coventry University which was commissioned by MasterCard.

This is not bad, if one keeps in mind that the New Zealand organisers are actually staging the tournament at a loss.

The host country pays all costs, including an amount to the International Rugby Board (IRB) for the right to present the tournament.

Income from sponsorships and broadcasting rights also go straight into the IRB's coffers to finance and develop the game worldwide, explains Mike Jaspers, communications manager of Rugby New Zealand, the entity organising the tournament on New Zealand's behalf.

"We weigh the costs up against the long-term benefit. This year we are presenting the sports event of the year and our country is receiving worldwide exposure, which is something money can't buy," said Jaspers.

The MasterCard report clearly shows that rugby's sphere of influence has considerably widened since the first World Cup rugby tournament in 1987.

In 1987 300 million TV viewers saw 16 countries’ teams in action. This year a global audience of four billion (individual viewerships for the various events added together) is expected, with 20 teams competing. Interest in rugby has increased, particularly in Eastern Europe.

"The game is currently enjoying fair growth, which could increase throughout the World Cup rugby tournament, which sparks interest from countries like China, the US and even Kazakhstan," says CIBS director Professor Simon Chadwick.

He attributes the new growth phase to a new generation of administrative managers. "The game's administrators these days have highly professional management skills and many of them have helped to manage the commercial development of the game."

Add to this the professional status of the players, and rugby is quickly becoming a big global business.

No wonder that leading sponsors such as the Emirates airline, Heineken, MasterCard and DHL support the tournament.

"The tournament is rugby's crown jewel and we grab the chance to build business opportunities," said Stuart Cameron, MasterCard's vice president for sponsorships in Africa, the Middle East and Asia.

He notes that the typical rugby tourist is male, from the middle-income group and between 20 and 50 years of age. He spends money on accommodation, food and drink and memorabilia and can therefore give the local economy a considerable boost.

It's this legacy from its 95 000 expected visitors that New Zealand will exploit to its advantage until the sport-related economic activities deliver a projected $11.7bn (R85bn) by the end of the decade. Not bad for an initial loss or input cost of about R203m.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

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