Financial Crisis Has Unions Reassessing Irb's Grab For Cash

Sydney Morning Herald

Saturday November 8, 2008

Greg Growden in Padova

IT HAS taken well over three months - and clearly the world financial meltdown has shaken up the issue - but leading rugby nations are starting to publicly complain about the International Rugby Board's audacious dash for cash by demanding exorbitant sums to host the 2015 and 2019 World Cup tournaments.

The Rugby Football Union's head, Francis Baron, unsettled the IRB several days ago when he announced that England could withdraw their bid to stage the 2015 World Cup unless the international body changes what he, and many other officials, believe are unreasonable demands.

Baron said the financial targets set by the IRB were impossible to guarantee due to the instability in the world's economy. Any country wanting to bid for a World Cup would virtually have to go to its government, cap in hand, seeking massive funding assistance. In this unsteady economic climate, they realise that they would most probably be refused.

That means the outright greed of the IRB could be thwarted by market forces. The money will probably not be there. Considering the crazy and highly inflated sums the IRB is demanding, that is understandable.

When the Herald revealed in July that the IRB had decided it would charge the 2015 World Cup host nation a tournament fee of #100 million - which now converts to $235 million - and the 2019 host would be hit with a #120m fee, the IRB went on the defensive, with its department of spin doctors complaining that our report described them as greedy.

The Herald report followed an IRB meeting in Hong Kong where it was announced that the hosts of the 2015 and 2019 World Cups would be decided next July, but a major detail was left out of the media releases - the massive up-front tournament fees.

The IRB countered this was not an up-front payment, but a fee to underwrite the World Cup. Not even the fact that the Olympic Games and the cricket and football World Cups do not charge the host nation anything to stage their tournaments can change the IRB's stance that it had every right to demand such exorbitant figures.

In the real world, World Cup-bidding countries now wonder whether having the event in their backyards is actually worth it, or if it will send them bankrupt.

Australia opposed the IRB cash demands at the Hong Kong meeting, and were quickly drowned out by a number of delegates, especially those from the north. Now some in this part of the world are starting to think clearly.

As Baron said: "Home unions now have to commit to paying a very large tournament fee to the IRB that has to be guaranteed and underwritten. This has changed the financial dynamics of bidding for tournaments substantially and puts an absolutely massive financial risk on the bidding union.

"Our initial predictions make it unlikely that England could actually make a profit out of hosting a World Cup in 2015. In those circumstances, the RFU board would have to consider very carefully whether or not it would be prudent to risk the game's money in bidding in the knowledge that almost certainly we would make a substantial loss.

"I have explained to the IRB that England is the largest rugby-playing country with access to some of the biggest stadia in the world like Twickenham and Wembley. But at the moment we just can't make the numbers work because of the scale of the financial guarantee that is required."

Undoubtedly, this issue will be raised when the IRB delegates meet this month, and it could even advance the cause of taking the World Cup to Asia earlier than anticipated. As Japan coach John Kirwan recently explained, the money trail should lead there.

"I believe the future is Asia," the former All Blacks winger said. "I think the game is saturated in the UK and in the southern hemisphere. More people go through one train station in Tokyo than live in Australia and New Zealand combined. Tokyo has the GDP of Italy. How can anyone in their right mind say it will not make money? It has a population of 120 million people, the second-biggest economy in the world, great infrastructure."

Kirwan is 100 per cent correct. But whether the IRB is on the same level remains to be seen. The IRB had the ideal opportunity to take the game to Japan several years ago when it had to decide who would host the 2011 World Cup. Despite an impressive Japanese bid, the IRB blazer brigade instead looked after their old rugby mates in New Zealand.

This rates as one of the worst decisions the IRB has made. But what was so upsetting about that decision was a high-ranking northern IRB official telling the Herald in Dublin the day after the vote that a major reason several countries voted against Japan was because they had not forgotten the Second World War.

© 2008 Sydney Morning Herald

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