Who saw this coming?

By Sam Richardson 31/05/2012

I have to admit, I thought we, as a country, might just have gone a bit over budget in the hosting of the Rugby World Cup. Rugby New Zealand 2011 didn’t though! This from the New Zealand Herald yesterday:

The organisers of Rugby World Cup 2011 have posted a tournament-end loss 20 per cent better than forecast, capping off a successful event that exceeded all expectations.

Rugby New Zealand 2011 today announced a loss of $31.3 million from staging the seventh Rugby World Cup, which is $8 million lower than forecast.

Under the original shareholding arrangement, two-thirds of any loss was to be covered by the Government, one-third by the NZRU but NZRU’s share of the loss was subsequently capped at $10 million.

Mathematicians among us will note that the taxpayers share of this loss is $21.3 million. Looks okay on the surface, and I’d be happy with it too, if there weren’t more costs (like $190m towards Eden Park, among others)…

This, also, from the Rugby World Cup Minister, Murray McCully:

“Without a doubt, RWC 2011 will generate significant economic benefits for this country for many years to come,” he said. “We welcomed 133,000 visitors to our shores and we were superb hosts for a great six-week celebration. The huge television audiences and extensive media coverage generated by the tournament boosted our international profile.

“We also forged valuable new business partnerships and showed the world we are a smart and innovative economy capable of delivering major global events.

“We made the most of being in the world’s spotlight, so this result really is the icing on the cake.”

I can completely understand the excitement when the loss is smaller than expected – this is indeed a positive result. I think it is a credit to the organisers of the tournament (Martin Snedden and his team) that the ticket sales exceeded expectations (I had my doubts, but I am glad to have been proven wrong), and that costs were lower than forecast. It was a very successful event, and many would consider it an investment that was well worth it (especially given that the All Blacks were victorious). The related question I am looking into at present is whether we saw the economic benefits during the tournament or whether these might plausibly materialise some time in the future.

The winners (domestically): The NZRU.

The NZRU invested $10 million in RNZ 2011 and $10 million in the redevelopment of Eden Park.

“From a rugby perspective, our investment in RWC 2011 is certainly paying off. We are seeing encouraging early signs that player registrations are up on last year and the strong gates and TV audiences we are seeing for Super Rugby are partly a spin-off from the wonderful atmosphere and exciting rugby we saw last year.”

Interesting, that. A quick read of this 2005 paper by Stefan Kesenne will reveal something rather remarkable.