Revenue Sharing





  • Eddie Jones’ England stars, in stark contrast, will pocket £22,000 each for the autumn international tie.



  • Sums it up huh?

    The haves and have nots. World rugby stands to gain from revenue sharing. Of course if you will give more away you'll be against it.



  • A related search on Twickenham revenue I did came accross this old article from last year by Paul Cully when the Steve Tew v Ian Ritchie back and forth was going on, and after rinse and repeat article when Fiji visted Twickenham last year.

    Thought this 3rd paragraph was a gem;

    Ritchie's comment earlier this year about the southern hemisphere nations needing to "build bigger stadiums" to improve their financial standing was wholly detached from reality.
    
    And his dismissive response to calls for Fijian players to be more adequately compensated for the Test match against England confirmed his pantomime villain status.
    
    "It is not England's responsibility to help fund world rugby," said Ritchie last month, four days before England fielded two Fijians, two New Zealanders and an Auckland-born former Queensland rugby league player in the win against Fiji, under the coaching of an Australian."
    

    http://www.smh.com.au/rugby-union/union-news/why-england-will-begrudgingly-pay-the-all-blacks-to-play-at-twickenham-20161229-gtj7wn.html

    EDIT: The main gist of Cully's article is "England will pay a share, even if it is begrudgingly."
    Is kind of wrong as the RFU baulked, but is kind of right as the NZRU are getting their asked for 3m quid fee to play the Barbarians instead.
    http://www.stuff.co.nz/sport/rugby/all-blacks/87860294/nz-rugby-set-to-announce-54m-match-against-barbarians-in-november--report



  • It would seem common sense that Tier 2 countries, that never get visited reciprically, should get a fee or a split (a fee would require less accounting overheads), and for simplicity's sake it should just be negotiated between the two parties, with an expectation that can be 'policed' by the media if it is too stingy.

    In fac, maybe the match fees should be part of the hosts costs. Then the SRU can divert that 650 pounds x 23 = (14,950 quid) to something else such as an administrators slush fund ..... , and the RFU can stump up e.g. 2k each for match fees etc

    But there are 2 'battles' going on and I think the PI nations etc are getting sucked into the collatoral damage.

    Ritchie (who has now gone I think anyway) is reluctant to set a precendent while Tew and co are sniffing around.

    The SRU should ask, like Fiji, my understanding from the original article is that they haven't (yet).



  • Sorry to sort of hijack the thread away from Samoa and the Tier 2 plight.

    But re: the 50/50 gate split of the Barbarians v All Blacks game.

    What on earth do the Barbarians spend their millions on?

    I think the Twickenham fee would be about 0.5 million, that would be paid for by the BaaBaas.

    The Rugby Paper said England's RFU would make £500,000 (NZ$895,000) out of the All Blacks-Barbarians match as a hosting fee
    

    A good earner for the RFU. (The RFU would also earn millions on the bar takings etc. So the RFU get a good pay day without having to pay the club owners extra to release players for an Out of Window test.)

    So Barbarians have 2.5m left.
    The match fees for the players are huge, e.g.
    http://www.greenandgoldrugby.com/community/threads/do-barbarians-players-get-paid-in-cash.7552/

    The Australian Rugby Union will take no action after three Wallabies were issued with infringement notices by the Australian Federal Police after failing to declare money to Customs officers. Matt Giteau, Adam Ashley-Cooper and Drew Mitchell were investigated by the AFP after not declaring more than $60,000 in cash to Customs when they returned to Sydney following the Wallabies' end-of-season tour last December. The money was earned when the trio played for the Barbarians at the end of the northern hemisphere tour. 
    

    60k x 23 = 1.38m AUD in player fees. or 800k in pounds. But these are just very rough numbers on very scanty information.

    What about the rest? if any? If millions? Rugby kit to the amateur level in places like Romania, Zimbabwe etc hopefully.

    I personally reckon a 50/50 split is very generous seeing as one side has huge year long overheads and the other is an invitational club with no infrastructure, wages, youth development etc. But I'm getting a little bit of greenback fever here.

    In last few years we see the BaaBaas sides populated by the SH contracted players as the game is out of window, so non-internationals like Mo'unga, Faddes, Nanai, Buckman etc have betting getting a very good bonus while remaining NZRU contracted players, The mercantilist in me is very happy at that outcome.



  • I thought these tests were negotiated with something like an 80/20 split for home/visitor. Does IRB not have a rule governing this? (Just read article; they don't.) If not, they should.



  • @rapido said in Revenue Sharing:

    It would seem common sense that Tier 2 countries, that never get visited reciprically, should get a fee or a split (a fee would require less accounting overheads), and for simplicity's sake it should just be negotiated between the two parties, with an expectation that can be 'policed' by the media if it is too stingy.

    In fac, maybe the match fees should be part of the hosts costs. Then the SRU can divert that 650 pounds x 23 = (14,950 quid) to something else such as an administrators slush fund ..... , and the RFU can stump up e.g. 2k each for match fees etc

    But there are 2 'battles' going on and I think the PI nations etc are getting sucked into the collatoral damage.

    Ritchie (who has now gone I think anyway) is reluctant to set a precendent while Tew and co are sniffing around.

    The SRU should ask, like Fiji, my understanding from the original article is that they haven't (yet).

    I think you're right here. There are two issues. One is very much a problem and the other much less so. Tier 2 nations, in particular the PIs are financially fucked. The money that they receive from the likes of the RFU is pitiful (as an aside is there any reason why this issue always gets raised when one of the PIs is playing England? Why not Wales, Scotland or any of the Tier 1 SH nations? Is the revenue position that different?). Nonetheless I am amazed that the RFU don't put their hands in their pockets for these sort of games. It really wouldn't take much to make a real difference and as it is, it is a PR disaster. In the meantime PI rugby continues to suffer.

    The broader argument for revenue sharing is not really such a problem. All the Tier 1 nations either have the funding or have the wherewithal to arrange their funding. They have the infrastructure, the fan base and the sponsorship opportunities. It is just a desire to get a larger slice of an already large pie and in this instance I agree with Ritchie's comment that it is not England's responsibility to fund world rugby, although he could have clarified that by saying Tier 1 world rugby.

    Definitely 2 different issues though.



  • @salacious-crumb said in Revenue Sharing:

    I thought these tests were negotiated with something like an 80/20 split for home/visitor. Does IRB not have a rule governing this? (Just read article; they don't.) If not, they should.

    I may be over-explaining but as I understand any tests in the IRB (WR) schedule are 100% owned by the hosting country.

    Visiting country gets squat.

    NZ are saying fark off. We deserve something from this. We're half the attraction..

    And trying to get everyone who is not England (and maybe not France) on board to push for revenue equalisation (or at least revenue sharing) for in-programme tests.

    Revenue from extra tests are negotiated: want a test outside the window? Pay us.



  • @catogrande said in Revenue Sharing:

    @rapido said in Revenue Sharing:

    It would seem common sense that Tier 2 countries, that never get visited reciprically, should get a fee or a split (a fee would require less accounting overheads), and for simplicity's sake it should just be negotiated between the two parties, with an expectation that can be 'policed' by the media if it is too stingy.

    In fac, maybe the match fees should be part of the hosts costs. Then the SRU can divert that 650 pounds x 23 = (14,950 quid) to something else such as an administrators slush fund ..... , and the RFU can stump up e.g. 2k each for match fees etc

    But there are 2 'battles' going on and I think the PI nations etc are getting sucked into the collatoral damage.

    Ritchie (who has now gone I think anyway) is reluctant to set a precendent while Tew and co are sniffing around.

    The SRU should ask, like Fiji, my understanding from the original article is that they haven't (yet).

    I think you're right here. There are two issues. One is very much a problem and the other much less so. Tier 2 nations, in particular the PIs are financially fucked. The money that they receive from the likes of the RFU is pitiful (as an aside is there any reason why this issue always gets raised when one of the PIs is playing England Why not Wales, Scotland or any of the Tier 1 SH nations? Is the revenue position that different?). Nonetheless I am amazed that the RFU don't put their hands in their pockets for these sort of games. It really wouldn't take much to make a real difference and as it is, it is a PR disaster. In the meantime PI rugby continues to suffer.

    The broader argument for revenue sharing is not really such a problem. All the Tier 1 nations either have the funding or have the wherewithal to arrange their funding. They have the infrastructure, the fan base and the sponsorship opportunities. It is just a desire to get a larger slice of an already large pie and in this instance I agree with Ritchie's comment that it is not England's responsibility to fund world rugby, although he could have clarified that by saying Tier 1 world rugby.

    Definitely 2 different issues though.

    I think it is because the revenue position is that different.

    Firstly think TV rights and telative populations.

    But gate tskings and corporate revenues are apparently huge at Twickers. So the comparison is more stark and makes a better story.

    The fact is that England stands to lose the most if there is any form of revenue equalisation. That's why they're against it.

    Any other nation even Tier 1 nations just don't generate as much $$$.



  • @booboo Yeah I get that England are (probably in line with the French) the most cash generative unions. What I was thinking about regarding the revenue position being different was whether there was a different agreement on revenue sharing. Like do Wales, Scotland, Aus, SA, NZ etc have any forms of revenue sharing? Probably should have clarified that better.



  • @booboo said in Revenue Sharing:

    @catogrande said in Revenue Sharing:

    @rapido said in Revenue Sharing:

    It would seem common sense that Tier 2 countries, that never get visited reciprically, should get a fee or a split (a fee would require less accounting overheads), and for simplicity's sake it should just be negotiated between the two parties, with an expectation that can be 'policed' by the media if it is too stingy.

    In fac, maybe the match fees should be part of the hosts costs. Then the SRU can divert that 650 pounds x 23 = (14,950 quid) to something else such as an administrators slush fund ..... , and the RFU can stump up e.g. 2k each for match fees etc

    But there are 2 'battles' going on and I think the PI nations etc are getting sucked into the collatoral damage.

    Ritchie (who has now gone I think anyway) is reluctant to set a precendent while Tew and co are sniffing around.

    The SRU should ask, like Fiji, my understanding from the original article is that they haven't (yet).

    I think you're right here. There are two issues. One is very much a problem and the other much less so. Tier 2 nations, in particular the PIs are financially fucked. The money that they receive from the likes of the RFU is pitiful (as an aside is there any reason why this issue always gets raised when one of the PIs is playing England Why not Wales, Scotland or any of the Tier 1 SH nations? Is the revenue position that different?). Nonetheless I am amazed that the RFU don't put their hands in their pockets for these sort of games. It really wouldn't take much to make a real difference and as it is, it is a PR disaster. In the meantime PI rugby continues to suffer.

    The broader argument for revenue sharing is not really such a problem. All the Tier 1 nations either have the funding or have the wherewithal to arrange their funding. They have the infrastructure, the fan base and the sponsorship opportunities. It is just a desire to get a larger slice of an already large pie and in this instance I agree with Ritchie's comment that it is not England's responsibility to fund world rugby, although he could have clarified that by saying Tier 1 world rugby.

    Definitely 2 different issues though.

    I think it is because the revenue position is that different.

    Firstly think TV rights and telative populations.

    But gate tskings and corporate revenues are apparently huge at Twickers. So the comparison is more stark and makes a better story.

    The fact is that England stands to lose the most if there is any form of revenue equalisation. That's why they're against it.

    Any other nation even Tier 1 nations just don't generate as much $$$.

    But it doesn't need to be % based. That would certainly cause inequalities.

    WR should simply insist that for the good of the game a touring Tier 2 country playing a Tier 1 country should receive x amount as an appearance fee.
    If they are good enough to attract a crowd they are good enough to be paid.



  • We’ve had this discussion before but it’s worth re-stating some of the factors to take into consideration.

    In my view, using England RFU as an example or reason to do this is wrong headed. They are so far out in front in revenue/turnover that they are the exception rather than the rule.

    If revenue-sharing is to be considered then the cause and effect for all parties has to be considered.

    Look at the respective turnovers of the unions amongst NZ, SA, Irl, Wal, Aus and Sco - let’s call them Tier B unions. (France are not on the same scale as England - partly because they don’t often own the stadia they play in, however, they probably join England in the small Tier A Unions ).

    As a crude measure of the turnover, Irl, Wal & Sco earn most of it from test matches. For example, IRFU turnover last year was €76.5m approx. €10.5m of that came from PRO12 and Euro Cup comps. Test revenue is about €51m all told between TV rights and test gates. Commercial income about €10m. The rest is kit sponsorships, sporting grants, etc.

    €41m goes back out the door on Professional Game Costs - the test coaching staff, player test bonuses, 15 player central contracts, and contributions to the costs of the four provincial teams. Other monies head towards the Elite Development Squads in the four provincial academies and their coaching staffs, the women game, the sevens game, and the 240 clubs around the country, the partial funding of the semi-professional and amateur leagues, etc, etc.

    The IRFU made a loss last year of €2.8m for the first time since 2007/08, but should break even or make a small profit this year - according to their annual report.

    So how much should IRFU agree on their Nov matches to share with opposing teams? (Generally travel costs, etc of the opposing team are met by the host team - even during in-window tests.) A lot of it is dependent on the opposition, attendances and the right ticketing strategy. In 2010, with the newly opened Aviva Stadium, the IRFU got it badly wrong in their pricing strategy and fans stayed away in their droves. They've got it right more often than not since then. But it's not always a full-house, even though Lansdowne Road is one of the smallest of the Six Nations stadia at 51,000. Across the Irish Sea, the newly-renamed 74,000 Principality Stadium puts up full houses and squeaking for games against England or Ireland, a few less squeaks for New Zealand, but then drops off considerably for the likes of Australia and South Africa - posting about the same attendances as Dublin. A look at recent attendances in the stadium shows matches against Fiji or Japan getting better houses than the two SH heavyweights , possibly due to combined ticket packages. Nonetheless, the stadium has other revenue generating events, and last year the WRU posted a bigger turnover and a profit than the IRFU.

    Other questions arise on the issue of revenue-sharing. Should it be reciprocal and happen in mid-year tests as well?
    Should there be minimum size stadia requirements for maximising revenue?
    What percentage should be spent on marketing the game?
    Should there be sharing of merchandising revenues/opportunities?
    Should there be a guaranteed minimum for the host nation no matter what? Surplus is then split accordingly?

    In summary, I’ve no problem with the theory of revenue sharing. Polarising it around the RFU won’t get agreement. Making it a “rich NH v poor SH” argument won’t help either. I do think the six Tier B unions could shape and argue for a new agreement collectively that benefits themselves and potentially Tier C and Tier D unions.



  • @catogrande Ignore all the convulated mathematical and moral arguments.

    Two reasons: RFU are fluffybunnies and the rest of us are jealous of how they get to wallow around in the cash like Scrooge McDuck.

    Perfectly reasonable arguments IMO



  • @pot-hale It's a fair point to highlight the RFU are a massive outlier.

    It would be nice if Australia, New Zealand and South Africa owned a national stadium, but we don't.



  • The RFU are certainly an extreme but is it not valid to highlight an extreme in order to illustrate a point? That is how you get attention to a matter. Show the ridiculous extremes that the current set up can lead to then work backwards to find the right balance.



  • @crucial I see your point but I'm not sure the extremes are particularly useful for a wider discussion. If we take England as one extreme and say Samoa as the other, it is quite a feasible exercise for England to stump up enough cash to make a material difference to the Samoan situation without it causing any problems for England. Whereas if you look at revenue sharing across the board this would hugely impact the RFU finances and not make anywhere near as much difference to say SA or NZ as a more modest payment would to Samoa.

    However in order to address the bigger picture I feel we should include a formal structure for open-side flanker sharing too.



  • @antipodean

    Neither does France, Italy, USA, Canada, Argentina. Ireland jointly own Aviva with the Football Assoc of Ireland and its still being paid off.



  • All this talk about Piutau or Fekitoa using the Olympic back door to play for Tonga. Forgets the real reason they left NZ, to provide for their families. If Bristol pay more then Tonga then the equation doesn't change and international rugby is all the worse for it.

    Got to be honest with you if I was a player representing one of the island nations and had to choose between club or country. I would see that 33 times pay disparity and decide its just not worth the risk.



  • @catogrande said in Revenue Sharing:

    @crucial I see your point but I'm not sure the extremes are particularly useful for a wider discussion.

    No but they are very useful in bringing attention to a subject so the wider discussions may kick off. Otherwise the call is simply 'Oh, it isn't an issue, let's move on'

    The thing that annoys me is that you can be damn sure that a England/ Samoa game will be marketed as if it is a genuine challenge from Samoa.
    I'm not looking for some multi-million pound share to the opposition, just a more equitable acknowledgement that the opposition are contributing to the product.


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