Last week it was announced that NBC (National Broadcasting Corporation) had inked a deal with World Rugby, to be the official USA broadcaster of the Rugby World Cup, the Women’s Rugby World Cup, and U20 Rugby World Cup for the next 7 years. The deal provides NBC the rights to the 2019 and 2023 Rugby World Cup, the 2017 and 2021 Women’s Rugby World Cup, the 2018 and 2022 Rugby World Cup Sevens, and the annual U20 Junior Rugby World Cup from 2017-2023.
— World Rugby (@WorldRugby) May 22, 2017
As many people have noticed, this is a colossal deal for the brand of rugby. The platforms that these games will be on varies though. NBC has the option to use their primary TV platform of NBC, as well as having alternative platforms such as, NBC Sports Network, NBC Sports Gold, The Olympic Channel: Home of Team USA, and more. The range of these platforms gives viewers a chance to get the matches from anywhere they are. It’s an amazing opportunity for the sport of rugby.
Despite all the excitement of this deal, one does have to ask, outside of a promotional opportunity, what does this deal provide for rugby in the USA? Meaning, what is the money behind the deal? As rugby continues to increase in popularity, and mature in the process of commercialization, how it makes its money is extremely important for the overall growth.
For rugby in the USA, the concern for money has become more important. While the 2016-2017 budget has not been released yet, it has been mentioned during a Q&A session with USA Rugby CEO, Dan Payne, that USA Rugby would be down 1 million dollars due to the loss of grant money from the United States Olympic Committee and World Rugby. This drops an already very small budget that was originally around $10,000,000, to an even thinner stringed budget. While there have been positives with recent partnership’s with Adidas, and continued partnerships with AIG, the full advantages of publicizing rugby hasn’t been returned financially.
Understand, the television market is changing tremendously, and networks are looking for more and more solid content to fill their schedules. The rise of Netflix, Amazon, Hulu, Facebook, Google (Alphabet) and Twitter as media innovators has now forced traditional media companies like Comcast (owner of NBC), CBS Corporation, 21st Century Fox, and Disney, to look for new ways to generate content. The combination of cord cutting and increased licensing rights have affected the way traditional networks work with sports media. As the cost of licensing rights for the NFL, NBA, College Football, and Baseball, entering into the high 100 millions and billions of dollars, the need to invest in new emerging sports has become more critical for traditional networks.
When looking at the cost of sports, the numbers are pretty eye popping. ESPN pays the NFL 1.9 billion per year, the NBA 1.4 billion per year and Major League Baseball around $700 million per year. Fox pays NASCAR $380 million per year. As mentioned before, there are reasons why media companies are looking for new emerging sports. With non-major sports for the USA market, ESPN pays $500,000 per year for soccer’s International Champions Cup for three years. In Europe, BT Sports paid $224.7 million dollars over 4 years for the media rights to the Aviva Premiership Rugby. The Rugby World Cup for 2011 and 2015 media rights was secured by UK media company, ITV, for a mere $91 million. The yearly cost being almost 1/6th the amount of the lowest major American sports media rights fee.
World Rugby will definitely gain the lions share of the benefits from this deal, as they are the hosts of these events. But as a USA based company, and the majority revenue generator of the third largest media company in the world, NBC clearly has a vision for rugby in the USA. It has been steadily gobbling up the rights to the highest levels of rugby played in the country. It’s easy because it would not be very costly for a brand like NBC, and USA Rugby should see some kind of return for that. The question would be how much.
Hopefully, as these deals get established, and the networks continue wanting to maintain their partnership with rugby, that there will be more money going back into the organization. Rugby has the ability to grow and gain viewership, but that should come at a cost.