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Home / World

French on $8b high if les Bleus stay course

By Catherine Field
12 Sep, 2007 05:00 PM4 mins to read

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Even the Eiffel Tower has been co-opted to play a part in the Rugby World Cup. Photo / Reuters

Even the Eiffel Tower has been co-opted to play a part in the Rugby World Cup. Photo / Reuters

KEY POINTS:

The crowds gawp at the 10-metre illuminated rugby ball suspended above their heads as they stand in line for tickets to go up the Eiffel Tower.

On the opposite bank of the Seine, crowds gather at a "rugby village" where cultures are swapped, food is gobbled down and ale is swilled, while at Paris City Hall, fans mass around a huge TV screen.

Across the city, "l'esprit rugby" is being transformed into euros, as hotels, bars, restaurants and shops cash in on the Rugby World Cup.

If the official figures are to be believed, France is heading for a windfall from the biggest sporting event that it has staged since the soccer World Cup in 1998.

According to the International Rugby Board (IRB), the event will generate some €4 billion ($7.8 billion) in "economic fallout" over the six weeks, mainly comprising €1.5 billion spending by the expected 350,000 foreign visitors, €2.1 billion in additional spending by fans in France who will watch the event on TV; and €250 million in France's share of ticket sales and marketing deals connected with the event.

Separately, the ESSEC business school estimates the immediate benefits to the economy to be worth €3.3 billion, but as much as €8 billion over the long term, if the calculations include an additional boost for tourism revenue, new membership for rugby clubs and linked products such as sales of rugby gear.

Such massive figures are whetting appetites.

French firms have led the charge on sponsorship deals, accounting for 80 per cent of the tally of official tie-ups, marketing experts say.

One reason is that this is likely to be the last top global sporting event that France will host for the next decade.

As the tournament hits its stride, it seems almost impossible to buy a product that does not have an official IRB or "les Bleus" logo - and those companies that are too poor to buy into a slice of the official action have taken an indirect approach with ads, usually of rugby-playing schoolchildren, to show they have values such as teamwork, strength and courage.

Thierry Vincenty, marketing manager with IMG, which is selling the commercial rights to the tournament, says corporate interest in this year's Cup became visible as soon as the 2003 event was over.

Compared with football, sponsorship in rugby, even at the paramount level of the sport, costs very little and the returns are very impressive, says Gilles Portelle, managing director of marketing firm Havas Sport.

McDonald's France has invested only €5 million on the back of its sponsorship as "official supplier" to the tournament, yet is calculating that its sales will rise 10 per cent as a result, translating into €30 million net profit, according to a report in the daily Le Parisien.

The insurance giant GMF, which has pitched up €5 million in fees to be an "official partner" as well as €5 million in TV ads and other publicity, is trailing an offer of a 15 per cent reduction in premiums for new clients.

It hopes to lure another 150,000 customers on to its books.

"In the past, bosses had a personal interest in rugby, but now they've understood that there's also an economic interest to be made in investing in it," says Bruno Molinas, head of Sportys, a company that specialises in sports marketing and TV rights.

"Rugby is a sport that has an excellent image. It has an image of fun and partying yet respect for the other team. And on top of that, it's going through a boom at the moment.

"In the past few years, the TV audience for the national championship has been rising annually by a third, and the number of spectators has risen by 30 per cent."

The surge of business interest in rugby is clear, but less ballyhooed are the risks.

In the 2006 soccer World Cup in Germany, returns eventually were far below pre-tournament expectations. The same could happen this year in France if the host is eliminated before the climax.

Many companies are crossing their fingers that France can overcome its disastrous opening-match defeat by Argentina. One of them is the nationwide TV channel TF1, which has shelled out €85 million to televise just 20 of the 48 matches.

At the moment, TF1 is selling a 30-second advertising slot for the October 20 final for a massive €175,000, according to the trade press. But that's if France is one of the finalists. If les Bleus are eliminated before then, the rate drops to just €83,000.

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