‘Cash cow’ Tew’s tip as cup coffers overflow
World Rugby’s coffers may be about to burst.
New Zealand Rugby chief executive Steve Tew expects this year’s event to be the highest grossing Rugby World Cup yet.
Staged across 11 cities in England and Wales, the global tournament is projected to generate over 400 million pounds ( NZD$970 million) in revenue – NZD$353 million more than the 2011 World Cup.
Throw in an expected 2.2 billion pounds (NZD$4.8 billion) to the local economy, thanks to 460,000 touted overseas visitors, and its pulling power is clear.
Comparing such staggering figures to the 2011 World Cup in New Zealand, where a budgeted $30 million lost was absorbed, is hardly fair. The size and scale of this event, which has sold 2.4 million tickets to eclipse the 2.2 million previous best from the 2007 tournament, will be like no other.
With 48 games to be held in venues such as Wembley, which boasts a capacity of 90,000, Twickenham (82,000), Olympic Park (54,000) and Millennium Stadium (74,500), the eighth edition of the World Cup is a licence to print money.
‘‘I like to think we did our bit in growing the tournament but the reality is you’re playing an event in a major European city. They’ve got big venues and the ability to price accordingly and the hospitality industry here is incredibly vibrant. Every angle you look at this tournament is all set up more revenue than we did in New Zealand,’’ Tew told Fairfax Media.
‘‘This one is going to make a substantial profit and it is forecast to be above the initial numbers. Twickenham is a money press after all.’’
All 20 teams that qualify for the World Cup earn a one-off 150,000-pound (NZD$366,278) participation payment. In addition, the top 10 nations are paid around 7.5 million pounds (NZD$18 million) as compensation for lost revenue from the June and November internationals.
That figure almost doubled in 2012 after New Zealand Rugby threatened to pull the All Blacks out of this World Cup unless changes were made to the financial model.
While NZR has sound income from broadcast (35 per cent) and commercial (30 per cent), the World Cup now provides another major windfall.
‘‘The participation fee and compensation were increased after 2011 to a point we feel comfortable,’’ Tew said.
‘‘We’re excited that this tournament by all forecasts will exceed everyone’s expectations in terms of revenue.
‘‘That will go into World Rugby’s coffers and it will be up to them how they invest that over the next four years. There’s plenty to call on the money with the growth in sevens and countries that don’t have as much commercial clout as we do, so there’s all those things to be considered.’’