Money talks in World Cup bid process
There can be little doubt that France will stage an outstanding Rugby World Cup in 2023 but in awarding them the tournament the World Rugby Council members have highlighted the conflict between the sport’s current financial model and the desire to grow the game.
South Africa’s bid to stage the sport’s showpiece event was World Rugby’s ‘preferred’ choice having scored highest in an independent technical review – ahead of that of France and Ireland.
But the unions that make up the all powerful World Rugby Council opted to disregard the recommendation of their executive committee and instead back the proposal that promised a record financial return.
Despite claims to the contrary, that decision is more than a little embarrassing for the sport’s governing body and suggests a lack of faith in the process and maybe even the World Rugby leadership team.
The members of the Council that voted – France, Ireland and South Africa did not vote due to their role in the bid process – may not have been obliged to accept the findings of what was no doubt an expensive evaluation process but their failure to come to the same conclusion ensures there will be changes next time around.
But arguably the major problem is not the selection process but World Rugby’s current financial model that relies so heavily on the revenue generated by the World Cup to fund its plans to develop the game – with the understanding that it accounts for approximately 90% of their revenue.
As a result it is perhaps not surprising that those unions wholly dependent on that financial support from World Rugby would want to maximise their future investment.
However, the financial return was just one of the criteria considered in the bid process, hence the endorsement of South Africa’s bid and their understandably high hopes of hosting the showpiece event for the first time since 1995.
It is clear that the unions that comprise the Council put a greater emphasis on the financial benefit that they may see individually post 2023 – or perhaps they worried there would be a drop in investment if the tournament went to a less cash-rich bid.
Those fears may have been heightened by the recent comments by Rugby World Cup Ltd that preparations for the 2019 tournament in Japan have “not progressed as much as we would expect”.
France played on these concerns in their bid presentation, suggesting that the 2019 tournament may see revenue slump by as much as 75% when compared to the 2015 Rugby World Cup in England and that investment in the game will fall as a consequence.
To soften the blow the French not only offered to pay £30m over the £120m hosting fee but also laid out its plan to buy the commercial rights for hospitality and marketing, normally managed by Rugby World Cup Ltd, for a figure of €112m.
They also assured RWC Ltd that their impressive stadium network would also provide €377m in ticket revenue direct to World Rugbys coffers.
Add in government and corporate backing for the €236m operational costs – including an unprecedented offer to host every nation for the duration of the entire tournament – and the result is around £350m in revenue for the game.
Importantly that money was guaranteed and represents a reported 40% increase on the amount generated by the 2015 tournament.
If that wasn’t enough to convince the voters then they were told that if they did not opt for the most financially rewarding bid then rugby would ‘die’ over the next few years.
Ireland were eliminated in the first round of voting and France then secured a majority and the hosting rights with 24 votes in the second round to South Africa’s 15.
Reports of French Rugby Federation president Bernard Laporte criss-crossing the globe on a private jet to visit far flung unions in a quest for support is just further evidence of the power of money in this process.
Ireland’s hopes in what was a secret ballot were reportedly harmed by the failure of their Celtic cousins to support their bid – with the Welsh opting to back ‘preferred’ candidate South Africa and the Scots favouring the riches promised by the French.
South Africa could not even rely on the support of their own regional association who were also swayed by the windfall offered by France.
England controversially backed the Irish bid and not one of their own – World Rugby chairman Bill Beaumont – in what could be viewed as a slap in the face.
Reports suggest they did so knowing a tournament on their doorstep would provide a huge boost to the sport in their region in terms of profile, fan engagement and commercial value and not because of a desire to see the sport break new ground.
In snubbing Ireland, the sport did miss an opportunity to underline their commitment to grow the game even if it would have meant everyone tightening their belts for a few years.
“Is it simply about money and shiny new stadia?” asked a deflated Irish Rugby chief executive Philip Browne
The answer is it cannot solely be about money if World Rugby is serious about being true to its vision of growing the game.
In the wake of their success, even France acknowledged that the current financial model and the selection criteria make it almost impossible for any nation outside the deep-pocketed French and English to take on the role of tournament hosts.
It is time to find alternative ways to fund the development of the game that allow the sport to take their showpiece event into new territories like Italy, Ireland, the USA or Russia where there may not be a compelling financial argument.
Similarly, are we seriously saying that the World Cup will never return to New Zealand, the site of a thrilling and engaging tournament in 2011, just because it would not generate sufficient profit?
There must be a change of focus or we will be having this same debate in four years’ time.