ARU backs Tew in Rugby World Cup money row

Australian Rugby Union (ARU) Managing Director and Chief Executive John O'Neill has backed his New Zealand counterpart Steve Tew's call for a change to the Rugby World Cup business model.

Tew, the Chief Executive of the New Zealand Rugby Union, this week told UK newspaper The Guardian that it cost his organisation some $13 million in lost revenue to compete in the Rugby World Cup and said that the chances of the All Blacks taking part in the 2015 tournament, to be held in England, were slim unless fundamental changes were made.

The ARU's O'Neill, who claims to been urging the International Rugby Board (IRB) for some time to get a better deal for the major rugby nations, said the issues Tew has raised "are real, substantial and, importantly, not new."

O'Neill agreed that the financial cost of competing in a World Cup had become too much, stating "as Steve Tew correctly pointed out, the current economic model is unsustainable and unacceptable.

"We look to the International Rugby Board executive to resolve these issues urgently because, as a national union, the ARU is unable to continue making these significant losses every four years."

Tew said that New Zealand and Australia continually had to bang the table hard at meetings of the IRB executive because the major European nations had an in-built majority and there was invariably a north-south divide. Tew is seeking for the tournament organisers to give individual unions greater commercial freedom to offset the income they lose in taking part in the event and an end to the total exclusion of their sponsors during a World Cup.

O'Neill said there were three significant issues: the World Cup business model and how funds are distributed or retained as reserves; the scheduling of future World Cups, and the commercial rules applying to participating teams and "'how they restrict the ability of national union commercial partners to leverage their investments. "

O'Neill added "Steve's observations, which were raised by the SANZAR unions 18 months ago, were based on robust analysis, shared with the IRB, that the tier-one unions collectively lose ï¾£48 million of revenue in this World Cup year due to the impact on the international match schedule.

"The ARU firmly supports ongoing funding assistance programmes for emerging nations and for the growth of the game worldwide.

"It should be an overriding ambition to have what are currently tier-two unions accelerate their transition to tier-one status both on and off the field. At the same time, there also needs to be cognisance of the need to sustain the financial strength of the existing tier-one unions, whose teams currently drive the commercial success of Rugby World Cup.

"The massive disruption to Australian rugby's calendar and inventory (through no inbound tests from northern hemisphere teams and a curtailed Tri-Nations) has left the ARU $16 million worse off.

"Those reduced revenues are across sponsorship, broadcast and gate. Such an outcome is unsustainable and impacts on the ARU's ability to promote and develop the game in our country and region."

O'Neill said that while grateful that the IRB recently agreed to increase its grants to tier-one unions, "it made minimal impact on the ARU's overall revenue shortfall."

O'Neill said the IRB appeared keen to find solutions, including that future Rugby World Cups do not "detrimentally impact" on major international tournaments and competitions in both hemispheres. He added that the Six Nations, Heineken Cup, expanded Tri-Nations, which will involve Argentina from next year, and Super Rugby tournaments should not be disrupted by the World Cup.

4th September 2011 - TEST RUGBY RETURNS TO THE SYDNEY FOOTBALL STADIUM