Bidding for glory
Hosting rugby event would be worth €1bn
IT looks set to be one of the toughest fixtures on the 2017 rugby calendar. On November 15 next year the World Rugby Council will vote on Ireland’s bid to host the Rugby World Cup 2023 – the third-biggest global sporting event after the Fifa World Cup and the Olympics.
As knock-out competitions go, it’s one of the toughest. Irish rugby chiefs must beat off rival bids from tournament host veterans France and South Africa in a winner-takes-all showdown.
The competition will be intense but IRFU chiefs aren’t rolling over just yet, even if they are the underdogs. If successful, the win would be a game-changer for Irish rugby – and bring a €1bn payday for the country.
If Ireland loses, there is more than just honour at stake. The IRFU is investing €2m in the bid process, and both governments, in the Republic and the North, are contributing €1.5m.
On top of this, the Government has agreed to pay the £120m (€140m) staging fee to governing body World Rugby.
In addition, the State will underwrite the €200m tournament costs, which include stadium upgrades, security and policing.
Even the GAA is backing the bid, with the amateur sporting body set to receive a €30m windfall from renting out stadia to host the event.
It’s a high stakes game but Irish rugby chiefs are fielding a dream team to help secure victory.
Leading the PR attack is rugby legend and tournament bid ambassador Brian O’Driscoll.
He is joined by Hollywood actor Liam Neeson, who narrated a video entitled Ready For The World to accompany the bid.
Former Tánaiste Dick Spring, executive chairman of PSG Communications Group Padraig Slattery, and former Ireland player turned investment banker Hugo MacNeill, have been enlisted onto the Oversight Board for the bid.
The IRFU has appointed Deloitte, which worked as bid adviser for the London 2012 Olympic Games and on the 2015 Rugby World Cup in England.
If Ireland’s bid gets over the line, there will be no shortage of companies seeking to get a slice of the action from the money-spinning tournament.
Industry insiders believe that one contender for the various contracts will be the US global advisory giant Teneo Holdings.
The firm, owned by Irishman Declan Kelly, has been bulking up its sports division with an eye to growing its presence in Europe.
In June this year, Teneo announced that former Ireland and Lions rugby captain O’Driscoll had joined its sports division as a senior adviser.
He has joined former team-mate and friend Shane Horgan, who is managing director with Teneo Sports, based in its New York office.
In July, Teneo announced its takeover of Dublin-based PSG Communications, the PR and sports sponsorship agency co-founded by Slattery and the official PR partner for the bid.
Slattery is a veteran IRFU insider who owns The Hospitality Partnership, a lucrative corporate hospitality and ticket firm that partners with Irish rugby.
Teneo Sports, headed by former Nike brand chief Charlie Denso, is currently working on a bid for the 2024 summer Olympics by Los Angeles.
With global clients such as Facebook, McDonald’s, Vivendi and Coca-Cola, it would be surprising if Teneo hadn’t run the rule over the commercial opportunities opening up at RWC 2023.
And with a growing number of ex-Irish rugby pros on its payroll, Ireland’s bid can’t have gone unnoticed at Teneo HQ .
When asked about whether Teneo-owned PSG Communications envisaged any commercial role at RWC 2023, Slattery said a successful bid comes first.
“As for post-bid we would have no expectations, as for now the entire focus is on trying to win the bid and nobody is looking beyond that,” he said.
In any case, there will be stiff competition from international firms for any contracts related to the event, although Irish companies may be in prime position.
Recent changes suggest World Rugby is looking to expand its use of local companies in host countries when it comes to sponsorship and licensing deals. This could open up lucrative opportunities for companies looking to grab a piece of the action at RWC 2023.
Until now, apart from ticketing revenues which the winning country can bank to offset hosting costs, World Rugby has retained all the income from TV rights, sponsorship, merchandising, licensing, travel and hospitality.
This money is used to fund the governing body’s activities for the following four years.
But Ireland’s chief bid organiser, Kevin Potts, says World Rugby may seek to appoint a local partner to assist with commercial deals for the 2023 event.
“Normally, Rugby World Cup keeps all the broadcast income, all of the sponsorship income, merchandising and licensing, travel and hospitality packages,” he said.
“But for 2023 they are looking to see will they open up some of that to the local host,” he said. “So, they are seeing would we be interested in putting in a bid for some local sponsorship and offering that in the local market. But that’s still at an early phase of discussion.”
Such a move would not be unprecedented. World Rugby has given Japanese advertising giant Dentsu a “substantial package” of official sponsor and supplier rights in Japan for Rugby World Cup 2019.
If World Rugby repeats this process in 2023, there will be a lot of Irish firms queuing up to benefit from a rub of the green if Ireland wins the bid.
However, there is still a lot left to play in this game before then.
The official throw-in took place this week when Ireland faced off against rivals bidders South Africa and France on Monday at a Q&Astyle ‘webinar’ meeting convened by World Rugby.
Potts says there are “massive Chinese Walls” between the IRFU and World Rugby, even though the IRFU’s HQ in Lansdowne Road is just a stone’s throw away from World Rugby’s HQ in Pembroke Street, Dublin. “There is a code of conduct that we have all agreed to. Rugby prides itself on integrity,” said Potts.
He faces into a hectic year of lobbying and jet-setting around the globe to cajole dozens of rugby unions around the world to support Ireland’s bid. Converting support into votes is essential for Ireland’s success.
“We could have the best technical bid in the world, but we also need to sell it to the voters,” said Potts.
In the end, it’s a numbers game. Top tier teams such as England, Wales and New Zealand have three votes each, while second tier teams such as the US, Canada and Mexico have just one vote. If Ireland is to be successful, the scoreline will need to read 19 votes to Ireland, out of a total of 37 votes cast.
The voting will take place this time next year, with the three nations bidding for the event abstaining. It is a secret ballot and the winner is whichever nation is first-past-the-post. If there is no winner after round one, the country with the least votes will be eliminated.
Ireland will be heavily courting the North American vote and will visit the United States for a second time in June.
Winning the right to host the tournament is big business. Not only will it attract around 445,000 visitors, delivering an overall economic impact of almost €1bn, but it will transform Irish rugby.
“Strategically for rugby in Ireland, RWC 2023 will cement the long-term popularity growth that has been won by the sport in Ireland over the past decade — where appeal of the game has transformed from one-in-four rugby fans in Ireland a decade ago to now appealing to three-in-four,” said John Trainor, founder and chief executive of sports marketing firm Onside research.
“The English Rugby Football Union recorded the highest turnover in their history in 2015 – boosted by World Cup-generated revenue of £228m. Total revenue increased by £200m on the previous financial year, allowing the RFU to post a retained profit of £3.9m compared with a loss of £6.7m in 2014/15,” he said.
Sponsorship for the Rugby World Cup has grown 10 times over the past two decades, said Trainor.
“Between the 1995 RWC in South Africa and the 2011 event in New Zealand, sponsorship rose from about €9m to €34m and sponsorship revenue for RWC 2015 topped €90m.”
Based on these trends, sponsorship revenue at RWC 2023 will far exceed that figure, he added.
Kevin Potts believes the Irish bid will ultimately win because it aligns most closely with one of World Rugby’s strategic aims — to drive the sport in North America.
“We have an 80 million diaspora around the world who love Irish heritage, and especially in North America.
“A Rugby World Cup in Ireland could provide a gateway for rugby to really get a foothold in America because of the Irish interest,” he added.
If Potts is right, and this time next year the bid is successful, it will be game on for Ireland’s sponsorship, events, PR and hospitality sectors.