brand stand­ing


NZ Rugby World - - Brand Standing -

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


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.


HIGH DE­MAND No mat­ter where the All Blacks play, they sell out the sta­dium.

The French have been able to gen­er­ate high rev­enue since the early pro­fes­sional days. WELL FUNDED

EX­EC­U­TIVE ROLES There are many strands to the All Blacks’ cap­taincy these days.

LONG -TERM DEAL The deal with adi­das is thought to be the big­gest in world rugby.

CHAM­PI­ONSHIP PUSH Win­ning the 2011 World Cup was a huge factor in win­ning AIG as a ma­jor spon­sor.

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