brand standing
IN THE LAST 10 YEARS THE ALL BLACKS HAVE EVOLVED FROM RUGBY TEAM TO SPORTS BRAND. NOT EVERYONE LIKES THE TRANSITION THAT HAS BEEN MADE, BUT IT HAS BEEN CRITICAL IN GIVING THE NATIONAL SIDE MAJOR INFLUENCE AND PROFILE IN THE WORLD GAME.
For many people there is still a sharp intake of breath when the All Blacks are referred to as a brand. It feels a bit corporate, cold and not right for a rugby team to be seen like that.
But for all that it may jar, it is essentially what the All Blacks have become. Rugby is part sport, part business these days. There’s no point in pretending otherwise – money matters. It really matters as without it the All Blacks wouldn’t be able to be the team they are.
They wouldn’t be able to influence the profile of the sport globally the way they currently do and entice big name sponsors and huge crowds.
The evolution of brand All Blacks is an important part of the jigsaw. It has influenced attitudes and standards within not just the All Blacks, but the wider New Zealand rugby landscape.
Professional rugby is not cheap to run. The expense of keeping the top players in New Zealand, giving them all the coaching and other resources they need, is enormous.
It costs close to $200,000 to take a Super Rugby squad to Australia for a week – and that doesn’t include wages. It costs about $850,000 to set the All Blacks up in a test week – probably closer to $1 million.
Moving players, coaches and all the required kit long haul is a massive expense. So too is accommodation and feeding them and then they also have to be paid. The bill climbs into the millions in an alarmingly short time.
To survive in this world, the All Blacks have to be a moneymaking machine as much as they are a rugby team. That is the unavoidable truth, however inconvenient and unpalatable it may be to some.
But the story of how the All Blacks have become such a large and influential brand is one worth telling. That conversion from team to brand has been integral to their success, and their success has been integral to the conversion.
It illustrates the influence they have been able to exert on global sporting markets and within the board rooms of some of the biggest corporations in the world.
It was inevitable that once the game went professional and labour markets opened in 1996, New Zealand was going to need money – truckloads of the stuff – to keep the best players here.
The professional sword was doubled-edged for the All Blacks. The excellence of the team and the obvious quality of the individuals within it, made them a magnet for offshore clubs.
Playing schedules changed. Tours died and in their place came annual trips north – one test here and move on to one test there.
Technology changed, too and within a relatively short space of time, fans everywhere could watch Super Rugby and the Tri Nations. Within a few years, the intelligence levels about New Zealand and its best players were significantly higher in the Northern Hemisphere than they had ever been.
It was a different world to the amateur period. There were no secrets any more. New Zealand’s best players were better known across the world.
It seemed like more people had a handle on what the All Blacks were all about, and knowledge and information didn’t kill the mystique. Far from it.
Greater exposure to bigger audiences and markets had the effect of accentuating the positives for the All Blacks.
The more they were viewed offshore, the more it became obvious that the skill levels of New Zealand’s best players were higher than those of the leading players in Europe. The more it became obvious that New Zealand’s best players had innate rugby ability that enabled them to wash up anywhere in the world and have an influence on that team.
And it was no wonder that seemingly every club owner across Europe and Japan wanted a high profile All Black – a big, ego-satisfying signing that would not only bring practical value to the team, but say something about the size and standing of the club, too.
In those early years of professionalism individual All Blacks were easy to pick off. Plenty left because they were being offered the world to do so and New Zealand Rugby didn’t have enough money to compete.
Look who left...Josh Kronfeld, Todd Blackadder, Zinzan Brooke, Christian Cullen and Carlos Spencer among many others.
The equation was weighted against New Zealand in that first decade between 1996 and 2006. Their players were more regularly in the global shop window, enticing and exciting clubs with the money to hire them. Back in the domestic market, however, income wasn’t growing as fast, or in line with international competitors.
The All Blacks were a hugely admired and respected team, but they didn’t have the ability to leverage that standing into financial reward.
They had influence, but not real influence in the sense that they were able to collectively earn the sort of dollars that reflected their true value.
It was a paradox of sorts. There were various research projects that showed the All Blacks had the same sort of recognition and profile as the likes of Manchester United, the Chicago Bulls and Ferrari and yet a microscopic portion of their revenue.
Whether anyone liked it or not, it was clear by 2006 that the All Blacks had to become a brand. Or at least within NZR they had to become viewed as a brand and promoted as such.
That meant the players would have to develop an appreciation that their responsibilities extended beyond playing. How they engaged with fans and media would become important in selling brand All Blacks.
There would be greater requirements to satisfy sponsor needs – to give those who invested in the All Blacks better value for money: a heightened sense that they were in partnership together, working with the team to achieve agreed common goals.
The All Blacks would be a rugby team on the field and a brand off it. That was a change that had to be made – the All Blacks were doing everything they should as a rugby team, but simply weren’t getting the sort of financial returns from that which they needed.
Both France and England had close to double the revenue of NZR. Even the Welsh, Scots and Irish were making almost as much.
NZR’s income was derived essentially from three sources: broadcast revenue, ticket sales and sponsorship.
In the first decade of professionalism, their broadcast revenue was comparable with anything signed in Europe. News Corp paid US$555 million to buy the 10-year rights to Super Rugby and the Tri Nations. That had to be split three ways – New Zealand, South Africa and Australia – but still, it was a significant amount of money.
On the sponsorship front, New Zealand had a long-term deal with adidas that was one of the bigger individual contracts in rugby, but the remainder of their sponsorship deals didn’t amount to a whole heap of beans.
The problem was the size of New Zealand’s population. With only four million people, the value of any deal was limited. Adidas were able to sell replica shirts in overseas markets, which is why they could afford to pay an estimated $5 million a year.
But for the other sponsors, the agreements were significantly smaller and in comparison with the likes of England and France, the All Blacks were well behind in sponsorship revenue.
The weakest link of their portfolio was, of course, gate revenue. New Zealand’s stadiums are small – ranging in capacity from 17,000 to 48,000. Compare that with Twickenham where the capacity is 83,000 or Stade de France which has 80,000 seats. Not only that, but the major northern unions own their stadia and have turned them into cash cows.
By 2005, once the dust had settled somewhat on the professional landscape, it became apparent that brand All Blacks needed more muscle. NZR needed to find a way to prise more revenue or face the real prospect that the All Blacks wouldn’t be able to keep enough of their best players to sustain success on the field.
The challenge post-2005 was to persuade major investors outside of New Zealand that the All Blacks were a brand that could uphold all the key values they promised.
The All Blacks’ legacy was long and inspiring. The win record was hugely impressive and the profile of the All Blacks was already high.
But what offshore investors needed was the reassurance that the team could live and breathe excellence, dedication, humility, clean living and relentless professionalism.
That was essentially what it meant to become a brand – to understand that being
THE RE-SIGNING OF ADIDAS WILL MEAN THIS IS BY FAR THE LARGEST RUGBY SPORTS SPONSORSHIP IN HISTORY. THE TOTAL IS HUGE WHEN IT IS MEASURED ACROSS THE 19 YEARS THE DEAL HAS BEEN RUNNING.’ STEVE TEW
an All Black was a 24/7 operation. There was no escape from expectation.
Being an All Black meant there was no time off because investors had to believe, be convinced, there would be no ugly mishaps or nasty incidents that would cause embarrassment.
From 2006, under the captaincy of Richie McCaw, relentless excellence and the highest personal standards became the adopted way of life within the All Blacks.
Players suddenly got the extent of their obligations and why it mattered what they did away from the field.
The All Blacks post-2005 became a more marketable brand. They became a better sell to potential investors. That didn’t mean it became easier to win offshore sponsors, but the story was more compelling, of more interest to a wider range of corporates.
The breakthrough moment, though, was achieved on the field. Victory at the 2011 World Cup gave the All Blacks the missing piece. It tightened their playing legacy – was the ultimate proof that they were living the values they preached and on a more obvious basis, it simply made them more attractive to potential investors.
To be able to say they were world champions was a game changer of sorts as there is no doubt it provided the nudge major US insurance group AIG needed to sign up as a major sponsor in 2012.
AIG committed for five years as naming rights sponsor and are believed to have paid about $10 million a year. That elevated the All Blacks into a different league in regard to potential brand worth.
AIG had previously delved into the world of sponsorship with Manchester United and it said an enormous amount that a US-based insurance group would make such a big investment in a national, New Zealand rugby team.
That deal was the point at which the All Blacks were able to make their influence felt in global markets.
Bringing on AIG as a sponsor was proof that they had found a way to convert their profile into investment. That is as much a relief as it is anything else as who really cares if the All Blacks raise a nod of recognition in Mongolia and Uzbekistan if it doesn’t lead to one extra dollar being pumped into the team?
Just how much the financial landscape had changed became clear on the eve of the 2017 British & Irish Lions tour.
A few hours before the Lions touched down, news was released that adidas had extended their sponsorship of the All Blacks to 2023.
The deal is estimated to be worth about $10 million a year and came a day after the All Blacks secured a sponsorship with luxury Swiss watchmaker Tudor and a week after they revealed a new relationship with Vodafone.
With AIG having extended their sponsorship to 2024 in a deal thought to be worth about $15 million a year and the game in New Zealand also benefiting from a broadcast contract that doubled in value in 2016 to about $75 million a year, the All Blacks were showing that they had become big, big business.
From turning over $104m in 2011, revenue jumped to $161m in 2016 and, given the raft of new and extended sponsorships, the New Zealand Rugby Union could earn close to $200m of income in 2017.