Top Rugby Teams to Get Compensation for World Cup Losses in 2015

The top-tier southern hemisphere nations will share 10 million pounds ($15.9 million) in compensation for competing at the next Rugby World Cup and also get an additional 3 million pounds each for participating.

The International Rugby Board agreed this week to change the four-yearly tournament’s revenue distribution model to address losses suffered by major teams during a World Cup year. The Australian Rugby Union said it had a A$16 million ($15.9 million) shortfall because of the need to cut its match schedule before the 2011 tournament.

World champion New Zealand said in September it could pull out of future World Cups unless changes were made. The increased fee for the 2015 tournament in England will help offset revenue lost by the All Blacks’ inability to host Test matches in the June window, Steve Tew, chief executive officer of the New Zealand Rugby Union, said today in a statement.

“We made our views very clear last year, and have worked hard on the issue since, so it’s very satisfying that we have been heard,” Tew said. “The increased distribution of RWC revenue, coupled with the ability to claw back some of the lost revenue from Test matches, is a significant help.”

As well as getting an extra 3 million pounds each along with the other so-called Tier 1 nations, Argentina, Australia, New Zealand and South Africa will share 10 million pounds to offset the impact of having to truncate their southern hemisphere Rugby Championship in 2015, when the World Cup is scheduled to start Sept. 18. The inaugural edition this year finishes Oct. 6.

‘Significant’ Result

The allocation will be distributed between the four individual unions on the basis of any proven revenue shortfalls suffered as a result of the timing of the World Cup, the Australian Rugby Union said today.

“The result this week, in terms of the increased distribution and the allocation available for any effect the 2015 Rugby World Cup might have on the Rugby Championship, is significant,” John O’Neill, the ARU’s CEO, said in a statement. “We are far better placed now.”

IRB restrictions that prevent sponsors from being associated with teams during World Cups will be reviewed by a four-person committee featuring Tew, Sophie Goldsmith, the commercial director of England’s Rugby Football Union, and the CEOs of the South African and Welsh rugby unions.

The Dublin-based IRB said it reinvests commercial revenue from the World Cup across all its member unions to advance development of the sport and will spend 150 million pounds on the global game between 2009 and 2012. The new financial model will provide an additional investment of 50 million pounds through 2015, the IRB said two days ago.

“A Rugby World Cup year is a financial challenge to all competing unions and the new financing model goes some way to answering those concerns,” Jurie Roux, CEO of the South African Rugby Union, said in a statement. “Typically, unions receive reduced rights fees from sponsors, there are fewer home test matches, while expenses increase as a part of preparations.”

To contact the reporter on this story: Dan Baynes in Sydney at dbaynes@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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