Ian Mallon: Is rugby now an indomitable force in sports sponsorship?
18 March 2023; Mack Hansen of Ireland is tackled by Jack van Poortvliet of England during the Guinness Six Nations Rugby Championship match between Ireland and England at Aviva Stadium in Dublin. Photo by Ramsey Cardy/Sportsfile
WITH a suite of commercial partners which could bring in €15m for the current financial year, Irish rugby is the sweet spot for sports sponsorship.
A Rugby World Cup - with the team positioned as world number one entering the competition - and a Netflix series ahead of next Spring’s Six Nations Championship, will bring the union’s commercial division that most sought-after asset – new audience.
Such elevated levels of attention will unquestionably increase the value of Irish rugby, which now dominates all sports, with recorded revenues of €116m.
This compares to the GAA’s €96.1m, which itself should see a cash surge of perhaps €10m into Croke Park on the back of the subscription service, GAAGO.
The FAI is operating to a different measurement, one of restructure, which in its own way is as impressive, with the association set to record a slashing of debt by a third to just over €40m.
For now, Rugby is the leader of the pack according to the best measurements available, the Onside research and analysis report into the sports sponsorship sector which shows the IRFU as the rights holder most attractive to brands.
The growing appeal of the sport should record another surge in commercial value by the time the statement for the current financial year - July 2022-July 2023 – are revealed later this year.
This is based on trends from the last available figures which showed that sponsorship and related income increased by €2.6m, settling at €12.7m for the end of year (July 2022).
That’s pretty much an increase in value by a quarter, which if repeated will see commercial investment into the IRFU settle at almost €16m.
While the GAA’s commercial revenues are €24m - this includes two sports, each with its own suite of separate sponsors.
No matter what number the IRFU records for this financial year, it won’t cover the Rugby World Cup or Netflix Series, which should be another golden period for the IRFU’s Chief Commercial Officer Padraig Power.
Power won’t be drawn on what the numbers might be, rather what the strategy to achieve growth is, which in its purest form is ‘take the forecasted figure and go way bigger’.
“It is a very challenging marketplace generally, but if you follow the Onside reports the market is growing between six and eight per cent this year and we set our stall out to try to outperform that across the annual calendar,” he explained in an extensive interview with The Pitch.
“There’s an inherent advantage in trying to stay ahead of the market because rugby is not getting cheaper to deliver.”
That Onside forecast ranks the IRFU as number one rights holder across all sports and the one which is best regarded by the market – investors and sponsors.
John Trainor, Founder and CEO of Onside told The Pitch, that the eight per cent that Padraig Power refers to is “our estimate of total sponsorship market growth for 2023.”
“23 per cent of sponsors are planning increase spend on sponsorship this year and rugby is the top sport in terms of sponsors seeing opportunity,” explained Trainor.
As the current financial year for the IRFU comes towards its close, Power reflects on what has been a boom time for the business and for the sport.
“It has been a marvellous year for Irish Rugby,” agrees Power.
“Even since this time last year when we had just marked the series win away to New Zealand, and this time around we’ve had a clean sweep in the Grand Slam, with full stadia all the way and really strong viewership figures on RTÉ and Virgin Media for the Guinness 6 Nations matches, which really helps all of our commercial partners.
“So from the top down with the international team and the really good year that’s brought, you look at Munster and their magnificent win of the United Rugby Championship and the way they did that.”
Power also mentions the success of the Ireland U20s – winning a second consecutive Grand Slam – Leinster always being “there or thereabouts” in the Champions Cup and the Women’s Sevens qualifying for the Olympics next year.
While it’s an obvious point, such success on the field achieves extraordinary value for the brand and corporately - one piece of data hits home just how valuable’.
“England was one of our biggest days ever, from viewership figures for broadcast all the way through to inside the stadium which was the biggest matchday revenue we’ve ever had.
“It was the biggest ever hospitality event at the Aviva, with 4,500 hospitality covers, where we had a previous best of just over 4,000.” The live game says Power, whether in the corporate areas or within the general stadium bowl, demonstrates the sheer appeal of international rugby for the fan and sponsor experience.
“It once again showed that people really want to see great rugby, and from a live sports business perspective, that transitions into really strong activity for our partners as well as for the fans.”
Outside of an enviable list of sporting assets and achievements on the European, and perhaps world stage by the end of 2023, the other key win for the IRFU has been the arrival of CVC Capital Partners to Six Nations Rugby.
That initial €413m investment by CVC established a value of €2.89b for Six Nations Rugby, which The Pitch estimates is now worth €4 billion after three years together, with those values set to soar after the Netflix series in January.
CVC is an equal stakeholder (14.28 per cent) in the organisation along with the six rugby unions and is one which brings an elevated level of expertise to its partners, particularly in the area of promotion and the alignment of sport and entertainment.
In fact the purest value that the private equity and investment advisory firm brings – with $133 billion worth of assets under its management – is the promotion of rugby as an entertainment vehicle.
“They’ve brought in a more pronounced merging of entertainment and sport and people will want to know more about the players and the personalities,” explains Power.
“The first Netflix series is due to come out after Christmas, for the run-in to the Six Nations Championship, and I’m hoping that will bring a new and perhaps younger audiences to the game, which will be hugely helpful.
“The proof of the pudding will be in the eating, but I believe people will be excited by it.
“But from an IRFU point of view you are trying attract new audiences and this is what they will be bringing.” Corporately or organisationally CVC Capital have no impact on an organisation which is one of the premium sports competitions in the world, but its impact on the growth of Formula One (by as much as a doubling of overall audience) demonstrates the influence it brings.
“They are very respectful around the business model and that the values of rugby are not eroded, and that element of respect, camaraderie and controlled aggression which make it such a good sport.”
Sporting and entertainment success means growth not just for the IRFU but also for its suite of premium partners.
“We couldn’t do what we do our primary sponsor Vodafone, who have been brilliant and as well as the money they bring, give us a win-win and really push the togetherness and Team of Us, and they echo that out in the public,” continues Power.
“All of our sponsors have been enormously important, Vodafone, Canterbury, Diageo and Aer Lingus – all iconic brands.”
Added value is a key asset on top of the cash that sponsors bring and Power points to services (Aer Lingus) provided, and through Triton Lake and PwC, the benefit for players in the Sevens and U20s sides, through the provision of employment and corporate experience.
“In terms of partners we haven’t lost or changed any, rather evolved towards deeper relations,” he adds.
Power of course is not one to miss an opportunity and points to the next key activation for the IRFU, two warm-up tests – including an eagerly anticipated clash with England - ahead of the World Cup, The commercial chief hopes that more people will attend these games who haven’t experienced key rugby matches at the Aviva’, where family tickets are available from €70 and “perhaps the last opportunity to see Johnny wear green at the Aviva”.
One area which will take a significant revenue hit for the IRFU for the next financial year will be the loss of the Autumn Series in November, due to it being a World Cup year.
Power doesn’t forecast match results or competition standings but you know that a successful RWC and a tournament win in France would make rugby an indomitable force in the commercial and sponsorship sector – if it isn’t already.
Tickets for Ireland v Italy and Ireland v England at the Aviva Stadium in August are now available at www.ticketmaster.com
