Editorial: World Cup a big success all round

5 comments
New Zealand will always look back on last year's Rugby World Cup as much more than a financial success.
 Photo / Richard Robinson
New Zealand will always look back on last year's Rugby World Cup as much more than a financial success. Photo / Richard Robinson

New Zealand will always look back on last year's Rugby World Cup as much more than a financial success but even its financial results, now becoming available, are looking good. The International Rugby Board reports that its tournament returns are likely to show a net surplus of around $168 million, about $18 million more than it expected. Its gross commercial revenue from the 2011 event was the second highest in the history of Rugby World Cups, with revenue just 3 per cent lower than the 2007 tournament in France.

France, as the IRB notes, hosted the tournament at the height of a global economic boom. New Zealand hosted it "amid an uncertain economic climate in a smaller domestic marketplace and in a non-European time zone".

With television rights on top of its hosting fee, the international board is the main beneficiary of the event. The New Zealand organisers never expected to fully cover their costs with ticket sales and were relieved to beat their target with revenue of $265.5 million.

The board believes the tournament has boosted New Zealand's economy by more than $500 million, but the real pay-off for this country's considerable public investment in stadiums and associated events must be measured in wider economic measures.

The first of them has arrived and it is not so good. The nation's GDP, the value of all economic activity, grew just 0.3 per cent in the final quarter of 2011, half the rate that economists had hoped. The period, October to December, included the knock-out phase of the World Cup, held largely in Auckland, and its aftermath when it was expected that visitors might stay on to see the country.

The economy had grown more strongly in the previous three months, to the end of September, which included the World Cup pool rounds, though GDP for that quarter has been revised down to 0.7 per cent. The results accord with anecdotal reports that suggest provincial towns did well from hosting pool games while Auckland's experience was mixed.

Shops, restaurants, bars and kiosks in the right place and at the right time did a roaring trade while many others, and other service industries, found business unusually lean. It appears that the World Cup disrupted normal patterns of consumer spending to such a degree that some traders said they were relieved to see the end of it.

But they might agree the country had an experience that cannot be measured in dollars and might never be repeated, though it might not be long before we are keen to host another. Our chances will depend heavily on the IRB's reading of last year's financial results.

The board receives 92 per cent of its income from its World Cup held every four years. In other words, it depends on that single event for nearly all the money it can spend for the development of rugby around the world. Its officials have said that when the board decided to award the 2011 event to New Zealand they had to budget for considerably less to distribute over the next four years. Such are the disadvantages of our population size and distance from big television audiences.

It is encouraging, therefore, that the board's revenues from New Zealand 2011 are just 3 per cent lower than those of the previous host, France. The IRB had greatly increased its fee for the event in 2007 and it charged New Zealand nothing less.

In return it received a tournament that engaged the country for seven weeks, and 133,000 visitors relished an experience where everyone around them was aware of the event and just about all were happily caught up in it. A financial result exceeding the board's expectations is another layer of icing on the cake.

- NZ Herald

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest
Stats provided by

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a1 at 24 Apr 2014 12:59:17 Processing Time: 1067ms