There is a lot of narrative in Welsh rugby about two of its core issues: crowd sizes and money. The less well informed look at crowd sizes in Ireland (well, in Limerick, Dublin and Belfast) with little comprehension to the size of the market and automatically assume that we in Wales should be able to match those crowd sizes. We see images of crowd sizes in days gone by and they are used as a stick to beat our pro teams as their crowd sizes don’t match up.
The root of that thinking, sadly, lies in the amateur era of the game and with a generation whose rugby viewing habits / demands / entitlement haven’t caught up with what rugby is nowadays: a business. Its money first, rugby second. As a nation (looking at it from a macro level) that kind of approach doesn’t sit well with us. Our rugby teams are being judged on some hazy memories of larger crowds in the 1980s where rugby was played at the same time each week and didn’t cost much to attend because the players weren’t, ahem, getting paid. And, of course, the games weren’t all televised.
So why are crowds for Ulster larger than crowds for Ospreys or Cardiff Blues? The same question goes for Leinster’s crowds and the same answer applies to both: there are more people in both those areas and they have more money. The populations of both Ulster and Leinster are over 2m, which is the entire population of South Wales and it serves four professional rugby teams rather than just one. The GDP per capita in Northern Ireland is c.£18,500 whereas in Wales it is £14,600. In Dublin it is significantly higher. So they have more people and they can afford to pay higher ticket prices. This is compounded in Dublin as there is no VAT on tickets as there is in Wales – so for every ticket you buy in Wales, the Government in London takes 20%.
In Wales, therefore, we have our own ‘triple lock’ problem. We have a generation living in the past who cannot understand that crowds in the old days had as many away as home team supporters (we get very few away supporters in 8 of the PrO’12 games), we have fewer people to draw upon than our competitors and we have an economy that means the retail customer is struggling the meet the cost of tickets and that struggle is compounded by most of the games being on free to air tv. Why shell out £50 plus to take you and your kids (to a 7pm kick off on a Friday which is a) probably too late for the kids or b) too difficult for you to get home from work, fed, grab the kids and get back out in time) when you can settle down to watch it for free in the warm and dry on your sofa?
Therefore, what is the point of chasing a retail income that has a tiny market and is relatively economically poor? Cardiff Blues recently released a statement to show its crowds were up 18% on last year for the 13 home games (the Os being played next door) this season. So I did a fag packet calculation of how much income was lost by NOT selling out every game:
I know the rough split of stand / terrace tickets. I g-estimated a crowd mix of 60% paying full price terrace, 30% senior, 10% junior and adjusted that slightly for Stand tickets. Working on that basis and using the published ticket prices on the website, I worked out that each retail ticket sold is worth £16.40 on average.
With a ground capacity of 12,200 and an average ticket sale of 7,019, the ‘missing revenue’ had each game been a sell out was £1.1m.
That’s a really important figure to note because the business lost £1.5m the season previous. This means that even had every ticket been sold – and remember that Connacht was played at 1pm on a Sunday lunchtime during the Six Nations – the business would still have lost money. On top of this, you must note that the spend on the squad is £1.5m to £2m per year short of what the top Irish sides spend.
So even if the team playing at CAP had 100% “affinity and unity” and had sold every retail ticket possible, it would have lost money on a squad that is decidedly mid table. Please remember this fact each time somebody mentions to you that there are hordes of people willing to spend their £20 on a ticket each week.
To reCAP: a sold out CAP for each of the 13 home games (including both Italian teams) would still have meant the business losing money.
This goes to show that chasing the retail pound is completely pointless for businesses that have such limited resources. In business, there’s no point spending £1 unless it brings in more than £1 so the limited resources should be spent chasing the corporate pound and this is why Hospitality is such a big business.
In 2012/13, the Hospitality pricing at CAP was £1200 + VAT for a Hospitality Box for one off use or £32,000 + VAT for a three year deal. The Match Sponsor was £1,750 + VAT for 10 tickets to the match, with food. And those prices are now 5 years old.
If you average out the hospitality prices and remove the cost of providing food, it’s fair to say that the average corporate guest will be worth comfortably £80 a head, more than four times the revenue of a retail punter.
The point of all of this is pretty clear: the branding of the professional teams should be aimed to generate as much corporate income as possible through brand alignment as that is where the money is. It is sponsors who count FOUR times as much as a retail punter. When marketing the teams and when pushing the brand, it is not Dai from Maesteg who should be the target market, but Bob in Bridgend who runs a Business.
Chasing “affinity” is utterly pointless. Chasing the pounds is what is needed and those pounds do not lie in the wallets of the individual who may or may not turn up, whose cost of attracting is significantly more than the cost of retaining an existing customer and for whom the very chase may alienate those who are already spending their £20 each week.
Taking games “on the road” is also non-sensical based on the above as there is only one suitable ground in each Pathway that can host professional rugby to the standards required by Corporate Guests. The idea of corporate guests spending £80 a head to watch Welsh Premiership rugby before being bussed to a significantly inferior ground is also frighteningly ludicrous. Genuinely frighteningly ludicrous.
In Wales, we need to be chasing the corporate pound. We need to capitalise on the position of rugby in the Welsh psyche and learn that it is brand alignment in the 21st century that pays the bills, not harking back to a time 30 years ago when the world was a very different place. We need brand alignment and discussions with sponsors as our business drivers, not bland branding designed to not alienate those unwilling to participate.
NOTE – of course the above is what each of the four can do whilst the real income comes in via the TV contracts, but that work is for Mark Davies of PRW to do. This blog was about what each of the four can do and, thankfully, at least the Scarlets are already on this journey.