Francois Pienaar

SA leads 'dash for cash'

2005-09-05 11:19

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Rugby World Cup bid CEO Francois Pienaar writes to News24 in a regular open letter.

Dear News24,

At various stages of the campaign for the right to host the IRB Rugby World Cup in 2011, various commentators have suggested the contest amounts to a simple "dash for cash".

They point out that the International Rugby Board derives 97% of its income from the Rugby World Cup, and that the IRB will necessarily take most the money the tournament makes.

Well, I am not sure if that 97% figure is accurate, and I also do not believe this is a single-issue campaign.

In all our discussions with IRB Council members around the world, we have been hugely impressed by a general desire to grow the game.

African Leopards

In this respect, the SA 2011 Bid initiative in Africa (creating the African Leopards continental team), our shared time zone with the major markets in Europe, and South Africa's capacity to provide an ideal RWC platform for the players, match officials, rights holders and visiting spectators have been well received.

However, we recognise the importance of the business case and, throughout the campaign, we have tried to outline and develop our conviction that, in 2011, South Africa will be uniquely placed to maximise tournament revenue for world rugby.

Rugby World Cup revenue can essentially be divided into four different pots: television rights, sponsors, hospitality, merchandise and ticket sales.

The SA 2011 bid has been planned and conceived to maximise the revenue in each category.

Television rights: the SA 2011 Bid team can't really claim the credit, but the fact that South Africa lies in the same time zone as Europe, rugby's most lucrative television rights market, means the value of TV rights for 2011 will be maximised.

Sponsors: each Rugby World Cup has typically attracted six or seven sponsors, of which three or four have been based in the host nation.

South African rugby continues to enjoy excellent commercial support, and there is no doubt that companies such as SAA, Sasol, Absa and Vodacom would give very serious consideration to joining a RWC commercial programme in South Africa.

Hospitality: Enjoying a pre-match meal and entertainment, or watching the game from a fully equipped private box has become part of the culture of South African rugby, with around 18% of Test tickets typically being sold with "add-on" hospitality.

This demand is reflected in the outstanding facilities available at South Africa's major stadiums.

Ellis Park, King's Park, Newlands and Loftus Versfeld each offers more than 350 private suites with a view of the field, and this outstanding inventory represents a highly significant revenue stream for the tournament.

Merchandise: Host nation sales of RWC merchandise will be maximised in South Africa for two reasons.

Firstly, a legacy of 1995 is that millions of South Africans retain a deep-rooted affection for the tournament.

People will want to get involved.

Secondly, the country has successfully developed some of the most admired anti-ambush marketing legislation in the world: rights holders are protected and illegal products are rigorously impounded and destroyed.

Ticket income: At the RWC in 2003, host nation Australia sold 1.85m tickets, representing 94% of the total capacity.

South Africa is conservatively projecting total ticket sales of 2 064 000 for 2011, representing barely 80% of the total capacity.

South Africa is able to offer such growth, and a corresponding increase in revenue, for two reasons:

1) the sheer size and scale of the stadiums to be used in the tournament;

2) the enduring passion and commitment of the South African rugby supporters.

So, while we sincerely believe that staging a successful Rugby World Cup in 2011 will be about much more than maximising the profit for world rugby, it is with firm conviction that the SA 2011 bid maintains South Africa will maximise that profit.

Best,

Francois

  • Francois Pienaar is the Rugby World Cup bid CEO, visit the official bid site at www.sa2011.co.za
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