World Cup Finances

[gingerjon]

Probably worth a new thread for clarity.

"So the tournament’s met budget and it’s been able to pay its bills. They’re still finalising accounts, that process is still ongoing, but yes it was a financial success because the IRL got its rights fee, no one’s bankrupt and it met budget.

"But unfortunately it could have been an £11 million better outcome if we’ve not had the postponement or the pandemic- and the economic crisis."

https://www.patreon.com/posts/86384913?pr=true

John Davidson's account of it all

[Dave T]

I think until we know what the IRL rights fee was, it means nothing. 

If the IRL fee was £10m then it was the most successful tournament by miles. If it was £1m then that is less than other tournaments has made. 

The commentary doesn't sound overly positive tbh, it sounds a bit spinny.

[Damien]

21 minutes ago, Dave T said:

I think until we know what the IRL rights fee was, it means nothing. 

If the IRL fee was £10m then it was the most successful tournament by miles. If it was £1m then that is less than other tournaments has made. 

The commentary doesn't sound overly positive tbh, it sounds a bit spinny.

With Covid and the associated cancellation and delay it is inevitable that this impacted finances severely. I have no doubt that bar that it would have been financially the most successful World Cup ever.

As you say the rights fee payment is key but if that is a decent amount amount and the tournament wets its head financially, along with all the associated government funding and grants given to the game in the UK, then its a decent result. Not the financial boon for the international game we hoped for pre-Covid but not a disaster either.

[Archie Gordon]

Operating loss of £11m covered by the UK government. Claim is that the outcome would have been £11m better if no postponement but then surely the UK government wouldn't have stepped in with £11m ...

I think this actually means that they originally projected an £11m profit after all the ins/outs but they instead broke even. Whilst I agree that the postponement was a catastrophe for the Cup's finances, I think that the ticketing policy/performance was always misguided. Still, there's no tab to pick it seems.

[Toby Chopra]

10 minutes ago, Archie Gordon said:

Operating loss of £11m covered by the UK government. Claim is that the outcome would have been £11m better if no postponement but then surely the UK government wouldn't have stepped in with £11m ...

I think this actually means that they originally projected an £11m profit after all the ins/outs but they instead broke even. Whilst I agree that the postponement was a catastrophe for the Cup's finances, I think that the ticketing policy/performance was always misguided. Still, there's no tab to pick it seems.

Yes, I don't quite get what he's saying about the 11mln, at first read it suggests the government bailed them out with an extra 11mn, but I don't think that's likely or we'd have heard of it.

More likely as you say, the govt funding, which I think totalled 25mn including community grants, was the difference between a loss and breaking even in the final accounting. Which is fine, it was there to be spent and they did.

I actually think Grant is being pretty honest that they got their ticketing wrong in precisely the ways that many on here said at the time: prices far too high given the economic situation plus a decade of discounting. But it's still disappointing that they didn't see it coming or had no effective Plan B. I do wonder if the tournament(s) had been structured and scheduled differently - perhaps women and wheelchair starting earlier - it could have got on a roll and sold better as it went along,like the Women's euros did.

In the end, mistakes were definitely made and he seems to be acknowledging that, but the circumstances were extraordinary and I'm always willing to give them some leeway for that. Compared to where we are now with 2025 it was a triumph!

 

[Dave T]

12 minutes ago, Toby Chopra said:

Yes, I don't quite get what he's saying about the 11mln, at first read it suggests the government bailed them out with an extra 11mn, but I don't think that's likely or we'd have heard of it.

More likely as you say, the govt funding, which I think totalled 25mn including community grants, was the difference between a loss and breaking even in the final accounting. Which is fine, it was there to be spent and they did.

I actually think Grant is being pretty honest that they got their ticketing wrong in precisely the ways that many on here said at the time: prices far too high given the economic situation plus a decade of discounting. But it's still disappointing that they didn't see it coming or had no effective Plan B. I do wonder if the tournament(s) had been structured and scheduled differently - perhaps women and wheelchair starting earlier - it could have got on a roll and sold better as it went along,like the Women's euros did.

In the end, mistakes were definitely made and he seems to be acknowledging that, but the circumstances were extraordinary and I'm always willing to give them some leeway for that. Compared to where we are now with 2025 it was a triumph!

 

One thought I did have is that they could be being very, very smart here. Let's say the IRL fee was £10m (we have no idea) - but if that was protected by using that model, then getting the UK Gov to cover the cost challenges is a real success.

Against that backdrop, it would be wrong for IRL to shout from the rooftops how much money they made from this, so hopefully they are understating the money made from this tournament publicly by just cutely referring to an IRL rights fee.

As I say, it really is all just speculation without knowing what the rights fee is. I expect it will come out in a couple of years as part of some accounts somewhere.

[Dave T]

38 minutes ago, Archie Gordon said:

Operating loss of £11m covered by the UK government. Claim is that the outcome would have been £11m better if no postponement but then surely the UK government wouldn't have stepped in with £11m ...

I think this actually means that they originally projected an £11m profit after all the ins/outs but they instead broke even. Whilst I agree that the postponement was a catastrophe for the Cup's finances, I think that the ticketing policy/performance was always misguided. Still, there's no tab to pick it seems.

If we are to compare to 2013, for example, we should read profit as IRL fee. IIRC wasn't 2013 profit in the region of £3-4m?

[Archie Gordon]

9 minutes ago, Dave T said:

One thought I did have is that they could be being very, very smart here. Let's say the IRL fee was £10m (we have no idea) - but if that was protected by using that model, then getting the UK Gov to cover the cost challenges is a real success.

Against that backdrop, it would be wrong for IRL to shout from the rooftops how much money they made from this, so hopefully they are understating the money made from this tournament publicly by just cutely referring to an IRL rights fee.

As I say, it really is all just speculation without knowing what the rights fee is. I expect it will come out in a couple of years as part of some accounts somewhere.

I agree. It could be a delicate bit of PR, particularly if we are looking for major Govt funds the next time we host.

[Dave T]

1 minute ago, Archie Gordon said:

I agree. It could be a delicate bit of PR, particularly if we are looking for major Govt funds the next time we host.

As ever, it really does all depend on the commercials.

It wouldn't be a surprise to see a minimum rights fee of £xm and then a profit share on any actual profits made. 

Or, it could always just have been that RL would see the £xm and the rest would offset the government funding.

[Toby Chopra]

10 minutes ago, Dave T said:

One thought I did have is that they could be being very, very smart here. Let's say the IRL fee was £10m (we have no idea) - but if that was protected by using that model, then getting the UK Gov to cover the cost challenges is a real success.

Against that backdrop, it would be wrong for IRL to shout from the rooftops how much money they made from this, so hopefully they are understating the money made from this tournament publicly by just cutely referring to an IRL rights fee.

As I say, it really is all just speculation without knowing what the rights fee is. I expect it will come out in a couple of years as part of some accounts somewhere.

That would certainly be the best case scenario, and not impossible at all. It almost feels like they kept the govt money as a reserve, just for this sort of scenario They also cut staff costs in the run in and event costs in the tournament itself, the latter contributing to the somewhat lackluster feel at times, but perhaps financially justified.

I wonder if the rights fee was fixed or variable? The 2013 accounts say something like there was a fixed fee, plus a profit share agreement, but no additional profits were made. Sounds like the same this time around too.

[Dave T]

1 minute ago, Toby Chopra said:

That would certainly be the best case scenario, and not impossible at all. It almost feels like they kept the govt money as a reserve, just for this sort of scenario They also cut staff costs in the run in and event costs in the tournament itself, the latter contributing to the somewhat lackluster feel at times, but perhaps financially justified.

I wonder if the rights fee was fixed or variable? The 2013 accounts say something like there was a fixed fee, plus a profit share agreement, but no additional profits were made. Sounds like the same this time around too.

Are you referring to the 2017 RLWC. I thought that was the first to use the fee model?

The 2013 tournament announced profits of over £3.7m which was to go the the IRL.

[Toby Chopra]

So I've had another look, and the 2013 accounts refer to a hosting fee of 3.5m, and then an agreement to give the RLIF the first 1m of any profit, but there was - conveniently - only an additional 2k to hand over as "profit".

Interestingly the govt support in 2013 totalled 2.8m, a fair chunk of the hosting fee. Given we never know how much the fee is ahead of the tournament, 2013 also fits your thesis that they might be rebadging any profit as a pre-agreed (but unannounced) hosting fee, for various sleight-of-hand reasons.

The govt isn't stupid, they can see what's happening, but it suits them to present it this way too. 

Seems like a lifetime away now, but the 2013 results also talk about holding the tournament with a difficult economic backdrop, but the write-up is much more upbeat.

[Damien]

I don't see the big deal about government funding and paying a rights fee. Its what every other sport does and they do it on a much larger scale.

[GUBRATS]

I enjoyed it , obviously other than the ' crims ' winning it

[Gomersall]

Have the Aussies ever published the accounts from 2017?

[Dave T]

2 hours ago, Damien said:

I don't see the big deal about government funding and paying a rights fee. Its what every other sport does and they do it on a much larger scale.

What is the issue with that model? 

[Dave T]

It is interesting to hear him being so candid about the failure of ticket sales. He doesn't really sugar coat it like some others tried to at the time. 

If we are going to learn from each tournament we need to be honest about the successes and failures. 

It's a crying shame that probably the biggest success of the whole thing (the inclusivity element) is one that may never happen again like that. 

[Dave T]

2 hours ago, Toby Chopra said:

So I've had another look, and the 2013 accounts refer to a hosting fee of 3.5m, and then an agreement to give the RLIF the first 1m of any profit, but there was - conveniently - only an additional 2k to hand over as "profit".

Interestingly the govt support in 2013 totalled 2.8m, a fair chunk of the hosting fee. Given we never know how much the fee is ahead of the tournament, 2013 also fits your thesis that they might be rebadging any profit as a pre-agreed (but unannounced) hosting fee, for various sleight-of-hand reasons.

The govt isn't stupid, they can see what's happening, but it suits them to present it this way too. 

Seems like a lifetime away now, but the 2013 results also talk about holding the tournament with a difficult economic backdrop, but the write-up is much more upbeat.

Do you have a link to the 2013 accounts? 

[Tommygilf]

Hopefully the game gets on with the new sponsors involved in the World Cup to generate that income. Cazoo etc could be sponsoring the Women's Super League, for example. I mean I doubt it will maintain those connections, but its good to have positive expectations.

Its also encouraging that whilst he is very frank about the failings, the inclusion aspect is seen as very valuable by him and therefore the IRL. Hopefully that positivity towards all 3 disciplines, that "olympic like" festival, is maintained going forwards.

[Hull Kingston Bronco]

Troy Grant: "It’s not anybody's fault... Was it a financial success in terms of ticket sales? No."

Er. yes, it was somebody's fault: Mick Hogan, who designed the pricing strategy and defended it endlessly against those among us who had an alternate view. And of course Jon Dutton, who signed it off. I'm fine with people having a strategy they believe in, and defending it when challenged, but when the results come in and prove that you were wrong, then it's time for accountability to kick in.

There was nothing inevitable about these results. Mick and Jon made bad decisions, and consequences followed. It's perfectly reasonable to call it out, and let them know they failed. 

 

 

 

 

 

[Toby Chopra]

1 hour ago, Dave T said:

Do you have a link to the 2013 accounts? 

This is the Companies House link for the company that the RFL set up for 2013, which they seem to have kept alive for major events, and looks like this is the entity they'll publish the 2021 results under.

https://find-and-update.company-information.service.gov.uk/company/07592215/filing-history/MzEwMjUwMjkwM2FkaXF6a2N4/document?format=pdf&download=0

[Dave T]

46 minutes ago, Hull Kingston Bronco said:

Troy Grant: "It’s not anybody's fault... Was it a financial success in terms of ticket sales? No."

Er. yes, it was somebody's fault: Mick Hogan, who designed the pricing strategy and defended it endlessly against those among us who had an alternate view. And of course Jon Dutton, who signed it off. I'm fine with people having a strategy they believe in, and defending it when challenged, but when the results come in and prove that you were wrong, then it's time for accountability to kick in.

There was nothing inevitable about these results. Mick and Jon made bad decisions, and consequences followed. It's perfectly reasonable to call it out, and let them know they failed. 

 

 

 

 

 

We did this to death at the time, but it was called out way in advance, and ignored. It was obvious that sales would be challenging based on what they charged and how they structured them. 

It was interesting to hear Grant saying he learnt a lot about culture of ticket buying in the UK. Well the UK isn't virgin territory. You may have an excuse if you're holding it in a new country and get it wrong, there was no excuse in the UK. 

[Hull Kingston Bronco]

10 hours ago, Dave T said:

We did this to death at the time, but it was called out way in advance, and ignored. It was obvious that sales would be challenging based on what they charged and how they structured them. 

It was interesting to hear Grant saying he learnt a lot about culture of ticket buying in the UK. Well the UK isn't virgin territory. You may have an excuse if you're holding it in a new country and get it wrong, there was no excuse in the UK. 

I had a conversation with Hogan about it, he was unrepentant at the time. You could see from the early sales data that buyers skewed to the lower end of price spectrum, and as a result the crowds that did come were all in less good seats (for both them, and the TV arc), with swathes of empty seats along the sidelines as a result of ridiculous price expectations for (lets face it) relatively meaningless group matches. 

Four weeks out from the tournament start they "upgraded" tickets (so moved the lower price points to better positions, and reduced the size of more expensive areas), which necessitated taking tickets off sale for 48 hours. But they were still so determined to defend their strategy that this was done in a half-hearted way - missing their one chance to fix it.

Just pure hubris I'm afraid. 

[Dave T]

Just now, Hull Kingston Bronco said:

I had a conversation with Hogan about it, he was unrepentant at the time. You could see from the early sales data that buyers skewed to the lower end of price spectrum, and as a result the crowds that did come were all in less good seats (for both them, and the TV arc), with swathes of empty seats along the sidelines as a result of ridiculous price expectations for (lets face it) relatively meaningless group matches. 

Four weeks out from the tournament start they "upgraded" tickets (so moved the lower price points to better positions, and reduced the size of more expensive areas), which necessitated taking tickets off sale for 48 hours. But they were still so determined to defend their strategy that this was done in a half-hearted way - missing their one chance to fix it.

Just pure hubris I'm afraid. 

It really was pure arrogance. It was me who raised the point that they were repricing areas (or cutting prices in reality) if you recall, and their response was that they were recategorising rather than lowering. Weasel words from start to finish. My seat was lowered from £75 to £30.

But even at that stage they still held firm as you say. They were still selling tickets at the HJ for £40 to stand up in the South Stand. They acknowledged that error in the week of the Tonga v Samoa game and lowered it, but that wasn't new news. 

And you had the double whammy of multiple games at the same grounds leaving game after game played as lacklustre 'events' with crowds that would be disappointing at SL and some Championship games. 

It was quite a bizarre series of events tbh and showed people completely out of their depth. 

[Dave T]

On the point of staging fee, the fact that this was £3.5m 10 years ago suggests that it really should be substantially higher for the 2021 version. 

Hopefully in the magnitude of 3 x higher or similar which will hopefully support lots of IRL activity. Let's see what the real legacy is for the IRL. That's what I'd like Grant to be telling us about now tbh.