All Blacks captain Sam Cane celebrates a win over the Wallabies. Could he be lifting the World Cup in October and what would that mean financially for the team? Photo / Photosport
With the Rugby World Cup forecast to be the most commercially successful tournament in rugby history, Gregor Paul looks at what winning it might be worth to the All Blacks.
When Silver Lake valued the All Blacks at $3.5 billion in 2021, the US fund manager did so based on the team’s history and winning legacy since 1905.
The All Blacks have a uniquely compelling record, having won 78 per cent of their tests, a number which jumps to 85 per cent in the professional era.
No other international team can claim anything remotely comparable and it’s this dominance, combined with the team projecting itself as one whose values are built on humility, unity, perseverance, innovation and dedication to excellence, which has attracted such volumes of sponsorship, broadcast and fan investment to make the All Blacks the most valuable commercial asset in the whole of rugby.
As former New Zealand Rugby (NZR) chief executive Steve Tew said in 2011: “The more you win, the more people want to be associated with your organisation, team and brand.
“The strength of the All Blacks brand is it wins at a rate of around 80 per cent of games and in the professional era that has risen to the mid-80s. That is unparalleled by any other sporting entity at our kind of level.
“When we’re trying to get into particular sponsors’ doors, that is what gets us through the door.”
Tew made those comments the day before the 2011 World Cup final between the All Blacks and France.
He was trying to explain that victory for the All Blacks would add to their story but wouldn’t radically - at least not in the long run - improve the commercial prospects of the team.
But winning the World Cup in 2011 and then creating history by becoming the first team to retain the title in 2015 has had considerably greater commercial impact for the All Blacks than anyone anticipated.
The All Blacks, despite being hugely successful, needed the validation of a World Cup win to support their claim to being the game’s most dominant team.
The legacy prior to 2011 was powerful, but it was missing that all-important confirmation that the All Blacks were mentally strong and physically robust enough to put everything together in a six-week blast when the whole of the world was watching.
Having won the inaugural World Cup in 1987, the All Blacks developed the unwanted tag of “chokers” after continually failing to deliver on their potential at the next five tournaments.
NZR convinced itself that consistent failure at the tournament was not hurting the All Blacks financially, but the dramatic change in revenue and global profile since the victory in 2011 tells a different story.
Six months after captain Richie McCaw lifted the Webb Ellis trophy at Eden Park, American Insurance Group (AIG) knocked on NZR’s door to talk about buying naming rights to the front of the jersey.
By October 2012, a US$80 million, five-year deal was signed and, in announcing the partnership, AIG chief executive Bob Benmosche said all the right things about the heritage of the brand and the legacy of the team, but the timing of the deal suggests the Americans suddenly became interested in the All Blacks after they won their first World Cup in 24 years.
Being world champions changed the commercial trajectory of the All Blacks. Before 2011 they mostly appealed only to domestic sponsors and more than half of NZR’s total income was from broadcasting.
But after winning that World Cup in 2011, the All Blacks became an attractive investment prospect for major overseas firms, and they began to collect a greater number of international and indeed domestic sponsors.
From having posted total revenue of $101.4m in 2011, NZR’s income jumped to $134m in 2015.
After the All Blacks retained the World Cup, income in 2016 leapt again to $162m, climbing to $187m by 2019 as they welcomed new sponsors such as Tudor, Replay, ASB, Vodafone, Mitsui Fudosan and Nissui as well as an improved deal from AIG.
Winning those two World Cups enabled NZR to almost double its annual revenue in a decade and it wasn’t all driven by sponsorships.
The broadcast deal for the 2016-20 cycle delivered a 40 per cent increase on the previous cycle.
As former Sky TV chief executive John Fellet explained to the Herald last month, he felt the rights were more valuable if the All Blacks were the reigning world champions, which is why he agreed to let NZR withhold key players from the early rounds of Super Rugby in 2007 as part of a plan to keep them fresh for the World Cup later in the year.
“It clearly contravened the contract I had, but I didn’t want to be that guy who said no and have everyone say, ‘That bloody Fellet, he cost us the World Cup’.”
It should also be remembered that the All Blacks were the reigning world champions when the current, $100m-a-year broadcast deal was signed: a record investment by Sky and almost triple what they paid in the 2006-10 cycle – a deal agreed a year after the All Blacks had bombed out of yet another World Cup.
There were other commercial benefits driven by those two World Cup wins. In 2017, Amazon Prime, having made behind-the-scenes documentaries with Manchester City and the LA Rams, wanted to make one with an iconic rugby team.
After the All Blacks won the World Cup in 2015, Amazon was in no doubt as to who it wanted and, in 2019, NZR was able to sell an All Blacks leadership programme to the top executives of Mitsubishi – something it might not have been able to do without the added credibility of being back-to-back world champions.
Given that NZR is in the second of respective six-year deals with its All Blacks kit naming rights partners, Altrad and Ineos, and only last week renewed its apparel partnership with Adidas, the value of winning the World Cup later this year probably doesn’t lie in sponsorships.
It’s not just that the key partners have recently committed to long-term deals, NZR now has so many domestic and international stakeholders that it has almost maxed out the number of hours players are contractually obligated to help leverage and activate sponsorships.
The commercial benefits of another World Cup title will likely come from a mix of direct initiatives such as performance bonuses, content opportunities and new business ventures, and indirectly by helping grow the profile and enhancing the brand story of the All Blacks internationally.
The agreement with Adidas contains a performance bonus that will be paid out if the All Blacks win in France and it’s probable, too, that both Altrad and Ineos will have made similar commitments in their respective contracts.
NZR could pocket anything up to $10m in bonuses - possibly more - and it could make that amount again from selling long-form content which goes behind the scenes of the world champion team.
It is believed that the All Blacks are making some kind of documentary this year in the build-up to the tournament - which will become a high-value property if the team goes on to win in France.
But where another global success could be most beneficial is in helping NZR win clients for its recently-launched All Blacks Performance Labs programme.
This is a programme that was built on the back of the 2019 contract to work with Mitsubishi’s executives, and one from which NZR hopes to make $33m over the next five years.
It’s an executive coaching programme built on selling corporate leaders the values and ideas that have made the All Blacks so successful, with NZR chief commercial officer Richard Thomas telling the Herald last year: “What we are trying to do is blend all those learnings from the team environments into the day-to-day realities of these businesses that we talk to.
“What do these ideas mean as they try to achieve things in their executive teams or their boardrooms and translating all that high-performance thinking back into the world of business executives.”
It will certainly help the sales pitch if the All Blacks are world champions, especially as results and performances in the past three years have been among the worst of the professional age.
But perhaps the greatest value of all will come from heightening awareness of the All Blacks in international markets.
The 2023 World Cup is forecast to be the most financially successful in history, likely to engage more than a billion viewers (the 2019 tournament had a total audience of 857m).
The final in 2019 had a live audience of almost 45m and the 2023 tournament is expected to top that. If the All Blacks are in the final, they will be beamed into households in more than 120 countries.
The significance of this is that Silver Lake’s investment thesis is built on growing and monetising international fans and there is no better way to do that than for the All Blacks to win the World Cup.
Revenue doubled between 2010 and 2019 and winning the 2023 World Cup may enable the same thing to happen by the end of this decade, which would mean that the expected $260m of revenue NZR posted in 2022, would increase to $520m by 2029.