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FINANCIALS

"A Pacific Island Super Rugby franchise would need to earn US$12million a year to be feasible."

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Here's how a Dwayne Johnson-owned franchise would comfortably achieve that:

The five main sources of income are:

  • gate revenue

  • grant funding

  • broadcasting revenue

  • commercial revenue

  • private investment (n/a)

Gate Revenue
Estimate: US$4m

The first source of revenue for a Pacific Island franchise is that of ticket sales on matchdays.

An independent report published in December 2017 calculated that were all the games to be played in Fiji, Samoa and Tonga; approximately US$1.27million would be generated from gate revenue.

 

That estimate is based on the following stadia, assuming a 70% capacity, 92.5% ticket yield with 10% given away as complimentary. Ticket prices were projected to range from US$13-32, in line with the lower incomes earned in Fiji, Samoa and Tonga.

  • ANZ Stadium, Fiji (19,000 capacity, Population: 900,000; GDP per Capita: US$4,402 )

  • Teufaiva Sport Stadium, Tonga (12,000 capacity; Population: 107,000; GDP per Capita: US$5,332)

  • Apia Park, Samoa (8,000 capacity; Population: 195,000; GDP per Capita: US$3,762)

Alternatively, were the Pacific Island franchise to be owned by Dwayne Johnson, and embrace several home-away-from-home matches, it is easy to see how the franchise could at the very least triple this gate revenue. Please note: the following populations are the Pacifica populations in these regions.

  • Eden Park, Auckland, New Zealand (50,000 capacity, Pacifica Pop: 195,000; GDP per Capita: US$36,842)

  • ANZ Stadium, NSW, Australia (83,500 capacity; Pacifica Pop: 92,028; GDP per Capita: US$54,031) 

  • Aloha Stadium, Hawaii, USA (50,000 capacity; Pacifica Pop: 141,326; GDP per Capita: US$49,690

  • Suncorp Stadium, Queensland, Australia (Capacity: 52,500; Pacifica Pop: 102,320; GDP per Capita: US$47,740)

  • StubHub Centre*, California, USA (Capacity: 30,000; Pacifica Pop: 150,908; GDP per Capita: US$69,477)

There would be higher costs involved with hosting fixtures in foreign stadia, however the earning potential is substantially greater.​

And it is important to stress that games would still be played in Fiji, Samoa and Tonga. This breakdown is not advocating for taking every game to wherever the biggest purse can be made. It is instead making the argument that home-games-away-from-home, by achieving the majority of the franchise's gate revenue, would make such local games feasible.

* Los Angeles, and the state of California, have a wealth of stadia options that could host a rugby match. For the purpose of this exercise a smaller venue has been presented (the home of the LA Galaxy).

Grant Funding
Estimate: US$1.5million +

World Rugby currently provides approximately £20million (US$26.5million) to Fiji, Samoa and Tonga over the four-year World Cup cycle. That's roughly US$6.6million a year.

This figure is expected to rise in the next World Cup cycle, to coincide with the commercial growth of the global game.

Given that a Pacific Island Super Rugby franchise would provide an outstanding development pathway and contracting support for the national teams of Fiji, Samoa and Tonga; a proportion of that funding would be well applied to ensuring its feasibility.

For estimation's sake, assume a combined US$1.5million is applied to a Pacific Island Super Rugby franchise from the World Rugby funding. That equates to only US$0.5million per nation, which is a small investment for regular Super Rugby matches in each country and a genuine development model for the national teams.

Consider too, the potential grant funding from the respective governments of Fiji, Samoa and Tonga; the former of which contributed US$1million to host the Crusaders v Chiefs match in Suva in 2016. 

Broadcasting Revenue
US$6.5million +

Trying to quantify exactly how much broadcasting revenue a Pacific Island franchise would earn is at this moment impossible. It would require extensive investigations and negotiations from all stakeholders and prospective broadcasters.

 

That being said, the calculations below are presented to demonstrate that at least US$6.5 million is obtainable, which when combined with gate revenue and grants, would achieve the US$12million total for feasibility.

Previous SANZAR Broadcasting Deals (also includes Tri Nations/TRC):

  • 1996 - 2005: US$55million per season

  • 2006 - 2010: US$64.6million per season (+17%)

  • 2011 - 2015: US$87.4million per season (+35%)

  • 2016 - 2020: US$104.9* per season  (+20%)

 

The exact amounts distributed to New Zealand, Australia, South Africa, Japan and Argentina are not disclosed. However, they are weighted based on (among other things) the proportionate contribution of local broadcasting deals. For example, if the local South African broadcasting deal substantially exceeds the local New Zealand broadcasting deal, this will be accounted for in the distributions to South Africa and New Zealand respectfully.

And with that in mind, SANZAAR would need to quantify what effect "Dwayne Johnson" would have in comparison to any alternative deal. 

But simply put, Super Rugby with a Dwayne Johnson-owned franchise, is worth a lot more than Super Rugby without him. All of a sudden, the US is an obtainable market, and this would have a monumental effect on a future broadcasting deal.

Let's project that the 2021-2025 deal:

  • organically sees similar growth to previous deals (average = +24%)

  • additionally, sees growth from the "Dwayne Johnson effect" and a US deal (+20%)

 

That deal would be worth US$156million per season.

 

For a Pacific Island franchise to earn US$6.5 million per season, they would only require 4.1% of that.

 

Were Johnson to be involved, and as a result generate a lucrative US broadcasting deal, he'd be in a position to negotiate far greater than 4.1% of the total broadcasting package.

But none the less, from these calculations you can see that broadcasting revenue is a very real component of a Pacific Island franchise's feasibility.

*estimated, as official figures were not disclosed, yet reports suggest a 20% increase

Commerical Revenue
Estimate: Unknown

As demonstrated above, a Dwayne Johnson-owned Pacific Island franchise could achieve the required US$12million feasibility target with gate revenue, grants and broadcasting revenue. 

 

Therefore, any commercial revenue would be surplus and could be applied to improving the competitiveness of the franchise and developing the Pacific game well beyond Super Rugby.

We won't even try to predict what the commercial revenue would amount to, but take a moment to think about it from the perspective of:

  • shirt sponsors

  • official partners

  • stadia signage

  • merchandisers

Each of which would pay good money to achieve direct association with Pacific Rugby excellence, and indirect brand association with Dwayne Johnson.

They would benefit from live match day coverage in:

  • Fiji

  • Samoa

  • Tonga

  • New Zealand

  • Australia

  • South Africa

  • Argentina

  • USA

And of course television and social media coverage around the world.

Case Study One: Dwayne Johnson's Social Media Reach

According to the Hollywood Reporter, Dwayne Johnson ranks #1 in the Top Actors Social Media Rankings. As of October 2018, he has over 116 million instagram followers, 58 million facebook followers and 13 million twitter followers.

To put that in perspective, his instagram alone is more than the population of New Zealand, Australia and South Africa combined; or alternatively England, Ireland, Scotland and Wales combined.

It's been estimated that Dwayne Johnson earns US$650,000 per instagram post. That's what companies are willing to pay to be associated with his brand for just one simple post in a crowded social media marketplace.

View The Rock's social media channels here:

Example Two: Pacific Island Target Market

When the resident and expat populations of Fiji, Samoa and Tonga are combined, it is a sizeable target market of 1.8 million.

  • Fiji: 900,000 residents; 103,500 expats

  • Samoa: 195,000 residents; 364,000 expats

  • Tonga: 107,000 residents; 142,000 expats

 

That may not seem huge compared to the numbers above, but remember that the population base behind the Highlanders franchise is only 0.35 million, and they've built a sustainable commercial model.

Example Three: Every Rugby Fan's Second Favourite Team

Talk to rugby fans all around the world, and they relish watching Pacific Island rugby. The style of play is natural and exhilarating, which interestingly are characteristics that marketers in all industries are trying to harness.

Add to that a genuine underdog story, as for decades the Pacific Islands have never been given a fair chance to compete. And right there you have a marketing narrative that will strike a chord with not just rugby fans, but sports fans worldwide.

 

Then combine that, with the excitement that would surround The Rock, and you have a franchise that will quickly become the second favourite team of rugby fans around the globe. 

Which is another reason why commercial partners will pay top dollar to be associated with the franchise.

  • Instagram - Black Circle
  • Facebook - Black Circle
  • https://twitter.com/TheRock?ref_src=
Private Investment
Estimate: Not Required

One of the objectives of this campaign is to demonstrate that Dwayne Johnson's involvement alone would be more than enough to ensure the ongoing feasibility of a Pacific Island franchise.

Hence why we're not outlining private investment.

Simply put, his mana would be investment enough. It would not only ensure the commercial feasibility of Pacific Island rugby going forward, but also crucially unite the stakeholders to achieve their potential.