Rugby Australia is predicting a $7 million per year revenue hole when the Sunwolves exit Super Rugby and the competition moves back to a 14-team round robin format.
As RA chairman Cameron Clyne backed SANZAAR's decision to axe Japan from Super Rugby and move back to a simplified round robin format, high level RA briefing documents obtained by the Herald revealed just how big a call administrators have made.
In a list of five key issues facing the game in Australia, the first outlines "significant financial risk" to RA and the Super Rugby clubs and puts a $7 million price tag on the "impact/gap to be filled" under the model from 2021.
That estimate is likely based on the reduction of home games under the round robin format, which will see each of the four Australian Super Rugby teams host one and two less home games in alternating years.
Despite falling attendances, the business models of professional sporting teams are still heavily based on hosting matches, which bring in ticketing, membership and sponsorship revenue, as well as deals with stadiums. The Waratahs, for example, receive $2 million a year from the Sydney Cricket Ground Trust under an agreement they play all their home games, bar a potential final, at Allianz Stadium.
The revelation was contained in a briefing document RA sent to its Super Rugby teams and other key stakeholders as supporting evidence to their decision to back the move back to 14 teams, without the Sunwolves in tow. Rugby Australia would not comment on the figure when contacted by the Herald.
Earlier in the day, Clyne said he was confident the new format, agreed and announced last month by SANZAAR, was needed to kickstart a revival in fan interest.
"Sometimes less can be more and we're openly acknowledging that the expansion path didn't work for Super Rugby, but part of that is not repeating the mistake and saying how do we get back to a format that's more engaging," he said.
"The only way really to drive increased revenue is having fan engagement, which leads to sponsor engagement and broadcaster interest. That's about teams being competitive … If you look at this year's format we are seeing an improvement in the way fans are reacting to Australian teams being more competitive and that's leading to … some new sponsorship arrangements coming through.
"We're pretty confident that the 14 team round robin … will probably lead to greater commercial opportunities."
Monday's annual general meeting went ahead without drama, NSW Rugby scrapping their Sunday night phone hook up and cancelling a push to drum up opposition to the format change.
Clyne said RA was well aware of the states' misgivings on the neRead More – Source