European club rugby to hit the jackpot with new Champions League-style ...

With Lucrative deals also expected for the French and overseas rights, it is

expected that the broadcast revenues will rise by over 50 per cent in the

first year alone.

The commercial value of the new streamlined elite competition, which will be

reduced from 24 to 20 clubs, is also expected to soar. One industry insider

predicted yesterday it would double over the next three years, even with

little time to have new sponsors in place for the start of next season.

This season’s European tournaments have generated a total of €52.7 million

(£44 million), a rise of 147 per cent since 2004. That figure could double

again over the next five years.

The inaugural season of the tournament will see the revenue distribution split

between the English clubs alone rise from €10.8 million (£9 million) to more

than €20 million (£16.7 million), an significant boost given the most

Premiership clubs are still loss-making entities.

The English and French clubs are so confident about expected growth in revenue

that they have guaranteed that the first €20 million generated will be paid

to the clubs in the RaboDirect Pro12, as well as the first €4 million £3.3 

million) made over the €60 million (£50.2 million) mark.

“This new European rugby championship is going to become the most lucrative in

world club rugby,” said Rupert Pratt, managing director of the sport and

entertainment agency Generate.

“I would expect the sponsorship income would increase by two thirds or even

double within two or three years. I would also anticipate the broadcast

revenue to go up by at least 50 per cent and that is probably a conservative

figure.”

The likely decision for the new tournament to follow a model similar to

European football’s Champions League, with four to six commercial partners

replacing a sole title sponsor, is expected to be the main driver for such

rapid growth.

It is also likely to make the broadcasting rights more attractive. Heineken,

the present title sponsor, is expected to be one of the commercial partners.

“I would expect sponsorship to increase by 25 per cent next year and if BT

Sport and Sky Sports do a new broadcast deal, it could be in a very good

place, very quickly,” Steve Martin, chief executive of sports agency MC

Saatchi Sport Entertainment, said.

“It is a really smart play to follow the Champions League model, as that way

you get those brands doing the marketing for the tournament and not just one

brand but four to six.

“In the current structure, the second tier sponsors were promoting Heineken,

but what you can do now is promote your own brand and promote the

tournament.

“The trick now is to have the right brands, with the right flair and

creativity. As well as the traditional rugby brands, you want to have a bit

of a maverick brand in there that has a bit of energy and innovation.

“When you get a brand marketing the tournament for you it is dynamite. That is

the holy grail from the marketing point of view. If you are sitting there as

a rights-holder of the new tournament, your dream is to have four really

successful blue-chip brands all working for you, as opposed to one. Rugby is

hot at the minute, it will be an attractive proposition for brands to go in

and support it.”

The introduction of a new third-tier tournament aimed at developing the game

across the continent, which will give teams from other European countries

such as Portugal, Georgia, Spain and Romania the opportunity to play-off for

a place in the second-tier tournament, is also expected to lead to long-term

commercial growth.

“The new tournaments also pave the way for expansion of the sport into other

European countries which again will increase the commercial appeal,” Pratt

said.

“Rugby plays well to the stronger regions in Europe and also plays strongly to

the business to business audience. It is not so big that it puts people off

but it is focused enough around the commercial heartlands of Europe.”

Article source: http://www.bbc.co.uk/sport/0/rugby-union/26550308

European club rugby to hit the jackpot with new Champions League-style ...