Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


APPENDIX 14

Memorandum submitted by the Welsh Rugby Union

1.  INTRODUCTION

  Overall, Rugby World Cup 1999 staged by the Welsh Rugby Union and its partners, the RFU, SRU, IRFU and FFR was a considerable success. It produced moments of outstanding quality on the field compounded by exciting and well-managed events and festivals off it, promoting rugby as an athletic and spectacular game, or an enormous sporting, human and commercial potential.

  The 20-team, 41 match final Tournament was only the tip of the iceberg, though, as nearly 70 Unions played over 130 matches in the qualifying rounds before the final tournament started in the spectacular surroundings of the Millennium Stadium, in Cardiff on 1 October, 1999. The WRU delivered the huge event, regarded in terms of commercial potential and public appeal as the fourth biggest in the world of sport after the Olympics, Soccer World Cup and Athletics World Championships, with skill and confidence.

  The mammoth event was planned and managed by a Rugby event consultancy "Rugby Solutions Ltd." jointly set in place by the WRU and the RWC. The following entities were involved in the organisation of the RWC '99:

    —  International Rugby Board—the Game's governing body.

    —  Rugby World Cup Limited—beneficially owned and controlled by the International Rugby Board (IRB).

    —  RWC Tournaments Limited—beneficially owned and controlled by IRB.

    —  Host Union—Welsh Rugby Union Limited and its partners (Sub-host Unions):

      —  Rugby Football Union;

      —  Scottish Rugby Football Union;

      —  Irish Rugby Football Union;

      —  Federation Francaise de Rugby.

    —  Rugby Solutions Limited—(RSL) acting as Tournament Office.

  (i)  The roles of the entities are listed below:

  Rugby World Cup Limited

    —  is the owner of all rights—both commercial and Tournament—marks and logos. Its duty is to implement the commercial programme.

  RWC Tournaments Limited

    —  has been assigned the tournament rights by RWCL. It contracts with the Host Union and, in the case of RWC '99, the 69 Participating Unions. In respect of RWC '99, it contracted Rugby Solutions Limited to perform a large number of functions, which required a professional staff and administration.

  Welsh Rugby Union Limited

    —  as the Host Union for RWC '99, was assigned the Tournament rights. Its duty was to organise the games and venues, pay the tournament expenses, carry out various other obligations under the Host Union Agreement and provide Accounts. In consideration, it was entitled to receive the gate income. It also contracted Rugby Solutions Limited to implement a number of Host Union responsibilities on its behalf.

  Rugby Solutions Limited

    —  was the operational company which undertook to discharge or assist, as appropriate, in IRB/RWC operational responsibilities. It effectively became the RWC '99 Tournament Office.

  International Rugby Board

    —  is responsible for the selection of Host Union, deciding the number of teams and the format of the competition, selection of referees and disciplinary functions. The IRB has a number of rights and obligations under the Host Union Agreement.

  (ii)  Obligations of the Parties

    (a)  Host Union (Welsh Rugby Union)

    —  Hosting the tournament and participating therein

    —  Making arrangements for the matches and designating locations

    —  Appointing organisers, medical officers, venue managers, liaison officers, interpreters, the Secretary for the Dispute Committee, Regional Tournament organisers

    —  Providing facilities and services for teams and officials

    —  Facilitating the exercise of commercial rights at each venue and training ground free of cost

    —  Indemnifying RWCL against loss from WRU negligence

    —  Undertaking obligations in relation to the venues and training grounds

    —  Implementing "clean stadia" policy

    —  Waiving any claim for copyright on all electronic coverage and commercial rights generally

    —  Procuring similar waivers from Sub-host Unions

    —  Procuring compliance by Sub-host Unions to the IRB/RWC agreements and policies

    —  Arranging insurance on public liability and medical costs

    —  Issuing quarterly reports to RWCT

    —  Non-disclosure of agreement terms

    —  Non-disclosure of confidential information

    (b)  Financial and Accounts

    —  Receiving the gate revenue (subject to agreement with Sub-host Unions)

    —  Paying the tournament costs

    —  Providing audited accounts within 90 days of the final match

    —  Providing RWC or its nominee complete access to information upon which the audited accounts were prepared

    —  Allowing RWC to audit the Host Union accounts

    —  Indemnifying RWCL against tax assessed on its revenue

    —  Being responsible for PAYE and national insurance contributions for persons employed by it

    —  Being responsible for VAT in respect of gate revenue

    (c)  Travel and Accommodation

    —  Arranging and paying for international travel for teams and officials

    —  Arranging and paying for domestic travel for teams and officials

    —  Making accommodation arrangements for teams and officials

    —  Arranging kit transportation

    (d)  Ticketing Policy

    —  Providing stadium mapping

    —  Complying with agreed ticketing policy

    —  Providing RWCL with up to 50 per cent of the tickets for each match

    —  Controlling

      —  quantity of tickets

      —  ticket design and printing

      —  ticket allocation system

      —  ticket distribution and payment subject to agreed maximum prices

    —  Providing RWCT no later than 1 November 1998 a breakdown of all tickets by price category available within each venue including standing, sitting, private boxes, committee boxes, VIP boxes, President's Boxes.

    —  Providing best quality seats for teams and referees participating

    —  Providing for each team:

      —  pool match—100 tickets

      —  knock-out play off—130 tickets

      —  final—70 tickets

    —  Providing for referees

      —  pool match—eight tickets

      —  knock-out play off or final—16 tickets

  (iii)  Rugby World Cup Limited

    The obligations of Rugby World Cup Limited included:

    —  A responsibility to licence marks for the tournament for use by the Host Union.

    —  A responsibility for implementation of the following commercial programmes:

      —  Broadcast

      —  Sponsorship

      —  Suppliership

      —  Information Technology/RWC Website

      —  Merchandising/Licensing

      —  Travel and Tours

      —  Hospitality

      —  Publishing

      —  Ticketing Policy

      —  Signage

      —  Marketing and Promotion

      —  Anti-infringement

    —  A responsibility for executing the Host Union Agreement and the Participating Union Agreements (finals and qualifying rounds)

    —  A responsibility to organise and pay for qualifying rounds and tournaments

    —  A responsibility for drug control

    —  A responsibility for managers' meeting

    —  A responsibility for records and archives

    —  A responsibility to provide an interface with the IRB

  (iv)  RWC Tournament Limited

    The obligations of RWC Tournament Limited included:

    —  Granting tournament rights to WRU

    —  Indemnifying WRU against tax on commercial income

    —  Specifying to WRU by 31 March 1999 its ticketing requirements by price category

    —  Making available tickets not required to the Host Union for all pool matches no later than 1 September 1999 and for knock-out matches by 1 October 1999, and for the play off and final at a further date to be agreed.

  (v)  Rugby Solutions Limited—the de facto WRU Tournament Office

    The obligations of Rugby Solutions Limited included:

    —  Organising the tournament on behalf of the Host Union

    —  Carrying out the WRU's tournament obligations as instructed

    —  Acting as Tournament Director for the WRU

    —  Providing an interface between WRU and RWCT to avoid differences and promote good media relations

    —  Devising, managing and controlling Media Services

    —  Devising, managing and controlling Accreditation Services

    —  Integrating RWCT and RWCL's obligations with the WRU.

2.  DIRECT FINANCIAL OUTCOME

  Rugby World Cup 1999, enjoyed by thousands who participated, millions who attended and billions who watched, has the role to generate the funds for the development of the game worldwide. In this respect RWC '99 was the most successful to date. The overall objectives of the RWC '99 commercial programme were to achieve an income in excess of £70 million and a gross surplus in excess of £45 million.

  The Host Union made every effort to maximize the gate revenue, which totaled in excess of £46 million. The financial targets were achieved, and the success of the Tournament has convinced several key international sponsors to consider extending their associations with the event.

2.1.1  Gross RWC '99 Income (Source RWCT Ltd)

Category
Gross Revenue (£)
Broadcast
44,218,323
Sponsors/suppliers
17,811,000
Hospitality
3,000,000
Travel and tours
2,079,240
Merchandising
1,840,615
Publishing
800,000
Total
69,749,178


2.1.2  RWC '99 Profit and Loss Account

Category
Budget £M
Actual £M
Commercial Income
70,500,000
69,749,178
Qualifying Rounds and Tournaments
2,100,000
2,536,606
Direct Tournament Organising Expenses
1,100,000
1,429,834
Insurance
800,000
825,777
Legal and Financial Costs
2,500,000
1,699,050
Commercial Expenses
13,400,000
12,741,360
Administration Expenses
1,700,000
1,000,234
Direct contribution to IRB costs—Dublin
2,500,000
2,500,000
Total Expenditure
24,100,000
22,732,861
Net Total
46,400,000
47,016,317


2.2  Host Union accounts—Ticketing and Marketing

  Eighteen venues were used in total for the 41 games—three in each of Wales, Ireland and Scotland, four in England and five in France. The Match scheduling was devised substantially on the basis of requirements of the players' welfare, with input from broadcasters and the Host Unions, all of whom indicated a strong preference for weekend games.

  The scheduling of the pool stage of the finals was criticized—and it has to be said that, although the criticism was somewhat legitimate—with three or four matches taking place each weekend day, for two or three days punctuated by gaps of several days when no games at all took place—the scheduling of matches at weekends, not only helped to reach a record cumulative TV audience of 3.1 billion, but also helped the Host Union and its partners maximise the spectator potential of the largest rugby stadia in the world.

  The promotional effort of the Host Union and its partners, though subject to some media criticism, was remarkably efficient, given the comparatively limited resources made available by the RWC. Figures suggest that awareness in the UK was near saturation as the tournament reached its final stages, while the number of spectators for the knockout stages was superior to the comparable stage in the 1998 Soccer World Cup.

2.2.1  Marketing RWC '99

  In the Home markets, RWC Ticketing Policy was the main marketing document of the Tournament. Its role was to make available match tickets to as many traditional and potential rugby supporters in as wide as market as was obtainable. The other aspect of the Marketing programme was to increase event awareness, both in the UK and in the world, to maximise TV audiences.

Facts and figures:

    —  the number of spectators exceeded the predictions; an 85 per cent level of occupancy in the 19 stadia was comparable with the best in the world;

    —  the games were watched by soaring world television audiences;

    —  the sponsors were delighted with the level and quality of exposure;

    —  the accreditation programme worked without a hitch;

    —  the top quality media facilities serviced nearly 1,500 journalists, more than double the numbers in 1995;

    —  the media information system Intra-Net linking the 18 venues—a novelty in RWC—was a success, providing a steady flow of Tournament News and Information;

    —  the Internet operation has set extraordinary records of usage.

2.2.1(i)  Television

  (a)  Cumulative Viewership:

RWC 1987
300 million
RWC 1991
1.6 billion
RWC 1995
2.67 billion
RWC 1999
3.1 billion


  (b)  TV—Viewership Distribution:

Europe
53 per cent
Central and South America
11 per cent
North America
6 per cent
Asia
19 per cent
Oceania
4 per cent


  (c)  Top 5 matches on TV (peak time):

1.
NZ v England
7.8 million
2.
Australia v France
7.42 million
3.
NZ v France
7.2 million
4.
NZ v Scotland
6.68 million
5.
SA v England
6.519 million


  (d)  Most popular TV event:

  (Audience research immediately after RWC. Although the pattern changes after each event, it is worthwhile emphasizing the strong impact of an event of this magnitude on the average TV audience.)

1.
Soccer WC
5.9
2.
Rugby WC
5.1
3.
Olympics
4.7
4.
Euro Soccer
4.1
5.
Wimbledon
3.6
6.
Cricket WC
2.9
7.
Athletics WC
2.7
8.
Ryder Cup
2.6
9.
The Open
2.4


  (e)  TV Summary

  (e1)  UK:

    —  In the UK, ITV broadcast 96 hours to a cumulative audience of 223 million.

    —  Nearly 70 per cent of the UK population (15 years plus) watched some RWC coverage on ITV.

    —  Only Olympic Games (Atlanta'96) have achieved a broader TV distribution than RWC'99 (on par with Formula 1).

  (e2)  Wales:

    —  In Wales 150 promotional trailers were shown prior to RWC on ITV 1 (HTV).

    —  The coverage involved 24 live matches on ITV 1, that is a total of 77 hours of RWC (including the highlights) and 17 matches live on ITV 2.

    —  In addition, the regional station HTV Wales has given blanket coverage, with live matches, previews and highlights. The news coverage on both HTV Wales and BBC TV has been equally outstanding.

    —  HTV were the only ITV region to carry South Africa v New Zealand live, other than ITV 2 digital.

2.2.1(ii)  Internet

    —  The www.rwc99.com site hit a peak period of traffic in the week ending 16 October. During this week 43,713,643 successful requests were made on the site, at an average of 400,593 pages viewed each day.

    —  The number of successful requests fell to 6,982,689 in the week 7 November to 13 November, at an average of 84,362 pages viewed each day.

    —  During the Finals Tournament 1 October to 6 November, approximately 164 million successful requests were made on the site. During this period over 10 million pages were viewed at an average of nearly 280,000 per day.

2.2.1(iii)  Promotion and advertising

  The increased awareness in the event following promotion and advertising campaigns:

72 per cent awarenesbeginning September
89 per cent awarenessend October
91 per cent (near saturation)after 7 November (final on 6 November)


  In the UK, the RWC logo—the second most recognised global event logo (after the Olympics circles).

  The prescence of the RWC logo on products increased propensity to purchase by 20 per cent (UK TV viewers).

  As a result of RWC'99, the sport of rugby rose in the list of the UK's most popular sports from:

    —  seventh position—before the event to;

    —  second position (behind soccer) after the event.

2.2.2  Ticketing

  By and large the success of the ticketing strategy was reflected in the large numbers of spectators attending matches, an average 72 per cent occupancy, which compares favourably with other major sporting events. According to the RWC Ticketing Policy, the majority of tickets for each match were distributed by the Host Union to its Constituent Clubs and Affiliated Associations and to those Clubs and Associations of its Sub-Host Unions for onward sale to their members. The remainder of the tickets for each match were allocated to Unions in membership of the International Rugby Board, to Overseas Supporters wishing to travel to the Host Union via packages purchased from the Official Travel Agents world-wide, via Hospitality Packages available throughout the Host Union, to the Media and to RWCL's Sponsors and Suppliers.

2.2.2(i)  Ticket prices

  Ticket pricing proved a contentious area, once the media had quoted the headline figures of £150.00 for a top-priced ticket for the final. In reality there were only ever 4,618 tickets at £150.00 reflecting the Unions' policy of setting realistic ticket prices below the maxima set by RWCT. The pricing policy adopted by the Unions resulted in the average price for a ticket being priced under £30.00. The SRU and IRFU maintained their normal policy of allocating tickets to juniors at reduced prices and the Treasurers of the five Unions agreed to charge the disabled for the price of one ticket for two including the helper. The Treasurers of the five Unions agreed the bands and prices on 2nd February 1999.

2.2.2(ii)  Spectator attendance overall

Number of Spectators
Total
Match average
Pools
1,067,184
35,570
Play-offs
175,013
43,750
Quarters, Semi-finals
467,853
66,830
Play-off, Final Tournament
1,710,050
41,700


  Average attendance for knock out stage (QF,SF,PO,F) of 66,830 exceeded that of the last Soccer World Cup (France '98—61,000).

  Attendance reached 72 per cent of the total stadia capacity.

  Average attendance for the Tournament 41,700, an increase of 25 per cent over RWC'95 (Soccer World Cup France'98 average attendance 43,517).

2.2.2(iii)  Spectator attendance in Wales

  Nine matches (seven at the Millennium Stadium, one in Llanelli and one in Wrexham).

  Total attendance 500,000.

  Average match attendance 56,000 (highest in the Tournament).

  Pool matches 295,300.

  Capacity knock-out matches 227,500.

  Average attendance knock-out stage 72,500 (highest in the Tournament).

2.2.2(iv)  Host union income

  Ticket sales formed the base of the Host Union revenue, which after deduction of the expenditure for hosting the Tournament, was divided in equal shares between the Five Unions (see below).

HOST UNION INCOME

  
Wales £
England £
Scotland £
Ireland £
France £
Total £
Match Income
15,652,980
18,092,040
5,237,523
3,646,277
4,057,162
46,685,982
Match Costs
(1,652,728)
(1,506,241)
(893,213)
(649,083)
(1,380,666)
(6,081,931)
  
14,000,252
16,585,799
4,344,310
2,997,194
2,676,496
40,604,051
  
  
  
  
  
Host
(18,296,316)
  
  
  
  
  
Tournament
  
  
  
  
  
  
Costs
  
  
  
  
  
  
Contingency
(200,000)
Equal Share
4,421,547
4,421,547
4,421,547
4,421,547
4,421,547
22,107,735

3.  IMPACT ON THE GAME IN WALES

  The staging of the World Cup in Wales provided the WRU with a marvellous opportunity to capitalize on the development work undertaken by its Rugby Directorate during the past five years. It was understood from the outset that the glamour of the Cup and its proximity will add a great impetus to the enormous developmental effort put in place by the WRU, in its desire to put the game in Wales on a very sound basis and re-launch Wales as one of the major playing powers on the world stage. The number of participants in the Game in Wales, at the end of 1999, grew by a staggering 6,000 youngsters, a fair result of the efforts put in by the WRU Directorate and the main developmental charity in Welsh Rugby, the Dragons Rugby Trust.

  The Ball Relay, a community-based event that was run in over 2,000 schools and 300 rugby clubs across Wales, involved 55,000 youngsters. Nearly 5,000 runners carried the Ball, attending 200 festivals and local events throughout the Principality.

  The success of the event was secured by the close co-operation from the Unitary Authorities, The Sports Council for Wales, Ford Motorcar Company and Coca Cola Company as RWC sponsors clubs and schools and many local sponsors and private individuals who gave their time free.

  The theme of the festivals was the introduction to and development of rugby skills among young people. As a direct result of this event, all clubs in Wales who run teams between the age 8-16 have agreed that the last Sunday of each month should be devoted to development of individual and unit skills, rather than to the playing of matches. In a word, the quantitative effort to increase numbers has been doubled up by a qualitative thrust to improve skill and understanding.

4.  ECONOMIC IMPACT

4.1  Objective

  The figures branded are, of course, an extrapolation of a wide-range marketing-research effort undertaken by the Welsh Tourist Board. They do not include the considerable contribution of the actual impact of the Millennium Stadium project. The Wales Tourist Board was a key partner of WRU in a combined marketing effort to promote Wales. The specific objectives were:

    —  to maximise the short-term benefits of the tournament by seeking to increase the number of visitors and their spending levels; and

    —  to enhance the competitive position of Wales as a destination for overseas visitors by using the tournament as an opportunity to raise the profile of Wales and improve the image overseas, thereby securing lasting economic and tourism benefits.

  The strategic targets of the WTB included securing an additional 55,000 visitors (20,000 domestic; 35,000 overseas) in 1999 and an associated spend of £12 million. Its budget for the operation was £1.97 million.

4.2  Achievements

    —  £83 million into the economy of Wales, with a £4.4 million additional potential from return visits. WTB).*

    —  331,000 visitors to Wales (WTB).*

    —  RWC generated 480,000 bed-nights in Wales, the majority in South Wales.

    —  80 per cent of the visitors came to Wales during that period, because of RWC.

    —  RWC sponsors Guinness experienced a 15 per cent (year on year) uplift in business volumes across both the on and off-trade during October 1999.

    —  ITV—host broadcaster UK—achieved a year on year network ad revenue increase of 16 per cent between October '98 (£222 million) and October '99 (£258 million).

  * Source: WTB—Welsh Tourist Board.

5.  CONCLUSION

  The Management Team of RWC '99, who operated with the support of hundreds of officials and administrators, both, professional and amateur, from the five hosting Unions worked for three years to put together the nuts and bolts of the huge logistic undertaking of the finals.

  The Host Union, felt that despite a number of imperfections, inevitable mistakes and mostly invisible shortcomings, the achievements far outweigh the drawbacks and RWC '99 was a tremendous success.

  Despite all that, the Tournament, the Five Nations format was subject to a fair amount of criticism in the UK and Australian media. However, it has been plainly clear that, despite its shortcomings, the Five Nations structure had been the cornerstone of the Tournament success story. the fact that the big matches were played in the largest rugby stadia in the world, with the size of the smaller venues being tailored to match the relative crowd-appeal of the lesser matches, enabled a record 1.75 million spectators—three-quarters of a million more than in 1995—to watch live RWC action.

  Proper planning and co-operation between the Host Union and local authorities enabled RWC matches to be played in front of sell-out crowds in hotbeds of rugby of the likes of Llanelli, as well as soccer strongholds like Wrexham. The sell-out crowds at Stade de France and Twickenham for matches involving teams other than France and England respectively were powerful statements about the drawing power of RWC, which, at its fourth Tournament has matured into a remarkably powerful competition. Even by taking into account the poor attendances at four pool matches in Scotland, the average number of tickets sold, as percentage of the total capacity of the 18 venues, was a staggering 85 per cent.

March 2001


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 3 April 2001