Cover story: Will Our Cup of Hope Runneth Over? – RWC 2011

Who on earth would buy business that’s going to shut down in three years time – and is guaranteed to make loss?
Yes – it’s us. New Zealand’s confident pitch that we could – from our remote corner of the world with population base merely four million strong – run one of the world’s largest sporting events earned us the right to stage the 2011 Rugby World Cup.
Just two years from now, the first teams will be running out onto newly rebuilt/refurbished stadiums around the country. New Zealand’s tourism industry will be putting out “country full” signs and we’ll be showcasing to the world our capacity to be the hosts with mostest.
So – how does it all look so far?
“I think I can say with strong confidence that in terms of preparation for the Rugby World Cup tournament, we are on track,” says RWC Tournament 2011 CEO Martin Snedden.
Okay – the concrete might still be drying on the new Dunedin stadium at the tournament start given the project’s estimated finish date falls bare two weeks earlier. But the other venues are proceeding apace – Eden Park has turned from potential disaster to “great result”; the 22 regional coordination groups are pitching in with will; the estimated 60,000 visitors are much more likely to find room at our collective inns thanks to some nifty (and unprecedented) cooperation amongst the inn-keepers; and preparations for nationwide festival are well afoot…
As to how all this gets leveraged in wider economic sense is subject for keen concentration over the next 24 months. There is much that RWCT 2011 has to do by remote control so engagement and partnering is very much part of the plot.
“It’s about selling story, creating vision and reason for getting involved in this,” says Snedden. “I’ve been doing that for about two years now – and my sense is that wide group of New Zealanders have already bought in.”
Snedden took on the task of leading the company charged with the task of turning Rugby World Cup Tournament 2011 into reality back in May 2007. He was poached from the world of cricket where he’d enjoyed distinguished international career (25 test matches and 93 One Day International appearances for New Zealand) and six years as CEO of NZ Cricket. So he’s not unfamiliar with challenge – but is happy to admit this task was initially tad overwhelming.
“When I first came into it, I looked at what needed to be done and thought – where do I start? But some good groundwork had already been laid by the NZ Rugby Union and it became apparent, as you broke the project down into manageable bits, that it was achievable and we started to feel lot calmer about it.”
As business case, the RWC hardly stacks up. The estimated cost of running the show is around $310 million – big chunk of which (£55 million) is the purchase rights paid to the International Rugby Board (IRB). Against that stack the $280 million estimated income from ticket sales. Simple maths reveals fairly sizable funding gap.
Then look at the business model that Snedden has openly described as “repressive”. While the host country pays hefty purchase price for the event, all the sponsorship and broadcasting sales rights stay with the IRB. So ticket income is all there is.
But we have small population, stadiums that possess, on international terms, relatively restricted seating capacity and are also some distance from the northern hemisphere fans who could be queuing to buy.
“In terms of your question as to how it stacks up as business venture – well it only stacks up if you do it because you are going to use the event as catalyst for doing whole lot of other stuff that makes it worthwhile,” says Snedden. “So there is some onus on the Government and local regions and NZRU to help make that happen.”
It’s perhaps comment on Snedden’s solutions-centred approach that he’s stopped bothering about the downsides of the proposition.
“I’ve never hidden my views on [the business model] but we knew that’s what it was when we went into it – they haven’t changed the rules on us… My view is that you accept the model and work within it. The recession is interesting on top of that…”
But the impediments are what they are, he says.
“It’s not worth dwelling on it – your question is the first time I’ve given it any thought for long time. You just blank it out and get on. I can’t figure out way of resolving world recession by myself so I’m not going to try. There are lots of problems that come up during this project but I can’t think of one that isn’t solvable. You just find solutions or find people who can find solutions and get on.”
There’s little in the way of precedents to look to and Snedden agrees New Zealand is going where many bigger countries would not dare to tread. The 2003 Rugby World Cup in Australia is useful reference point and offered relevant research. The French also shared heap of knowledge from their experience two years ago.
“They were really great in terms of opening themselves up to us – one of our guys worked over there and, later, we brought the whole senior management team out to New Zealand together with senior managers from the IRB and spent week debriefing on what had happened and what we could learn from it. That was incredibly useful. It’s the first time it’s ever happened in terms of the Rugby World Cup and created whole lot more certainty that it was all achievable.”
Local precedents include the New Zealand-Lions’ tour.
“In terms of ticket revenue – the games were pretty much all sold out and at higher than normal prices and they grossed about $32 million. We have to do about nine times that – so we’re going into bit of uncharted territory.”
The need to charge international prices for access to at least the 14 major games is reality flagged early on.
“It’s been important to make people aware of that but there are another 34 or so priced either at or below All Black tests – so there’s balancing act.”
The need to get regions strongly engaged in the vision is another process that started early on – and the pull had to be spread beyond rugby.
“We’ve deliberately pitched it so the focus is much more on the magnitude of the event which rugby is at the core of – so we’re wrapping festival right around that core. Every region that is hosting the cup will be running regional festivals and they have full delegation to shape those how they want – and to showcase their region as they want.”
Those individual efforts will be worked into an overarching national festival framework that can be promoted offshore.
“This is the best promotional opportunity New Zealand has probably ever had – or will have,” avers Snedden. “So long as you can pitch it right at those people who aren’t so interested in rugby and get them engaged, then the task of getting everyone in New Zealand interested gets comparatively easier.”
So take the small population disadvantage and turn it into plus – the four million stadium, nation of motivated welcoming hosts.
“That’s the concept we’re working on to get the rest of New Zealand into this. It’s getting them to see that this is not about another attempt by the All Blacks to win the holy grail. It’s actually about the opportunity to host one of the world’s biggest sporting events – and the hosting responsibilities that go with that.
“It’s no more complicated than having guests come to dinner. If people understand how they can contribute to this then they will respond and do something and all those little somethings will add up to something quite special. That is our point of distinction.”
It is, he says, fairly pointless to try and emulate the Beijing Olympics or Sydney Olympics.
“You can’t replicate that stuff – you have to look to your own uniqueness, your own strengths.”
One of the biggest challenges is just keeping track of all the many stakeholders. There’s the interface with the Rugby World Cup – the IRB’s commercial arm and owners of sponsorship rights. Then there are two major local shareholders – the Government and

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