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On the money - the corporate sponsorship of Australia's pastime

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Rugby union has long been the code of corporate Australia but as soccer and AFL rise in popularity it’s now got a fight on its hands, not just for fans and TV airtime but for corporate sponsorship dollars. Australian Rugby Union CEO John O’Neill joins Peter Switzer on Sky News Business Channel’s SWITZER.

An economic indicator

Could sport be the new litmus test for the health of the market? O’Neill says rugby union can certainly track economic progress.

“Rugby is a big end of town sport. We’ve only been a professional sport for about 15 years but our AB demographic has a tendency to attract big corporates and we’re both beneficiaries and sometimes carry the burden of downtime of the economy and we’ve seen a bit of that in the last couple of years,” he says.

In the past 10 years, however, rugby union has seen increased competition between the football codes, fighting for fans and corporate sponsorship.

“It’s just the nature of the marketplace in which we operate and whether we’re talking about financial services or other industries, sport, particularly the mass entertainment end of sport, is the most competitive probably in the world,” says O’Neill. “You throw in NRL, AFL, football, rugby union, cricket, basketball – all out there fighting for the hearts and minds of fans, consumers, broadcasters, sponsors.”

The key, he says, is to approach sport with a business mentality.

“We’re always looking as with any business for a point of difference and rugby has to continue to do that,” he says. “If you stumble in this business, like in any other business, someone will take market share off you.” 

Facing hardship

Given the trying times of recent years, how has rugby union faced the challenges?

“Initially, it was very scary and probably, like a lot of businesses, we overreacted only to find it wasn’t as bad as all the doomsayers predicted it would be,” he says. “The RFU, the mighty English rugby union, fired off a broadside saying Armageddon.

“In fact, it was a softer landing than we might have expected and we’ve got quality, very supportive sponsors like Qantas, like Diageo, like Suncorp, who have all stuck.”

For rugby union, the saving grace was their exposure to an international market.

“We’re different to AFL And NRL in particular because we have a joint venture with New Zealand and South Africa called Sanza,” he says.

In a sense, the code acts as an exporter to worldwide media.

“It’s the sum of the parts for us. It’s not just what, say, Fox Sports or Channel Nine pay domestically. It’s what we pick up out of SuperSport in South Africa, Sky in New Zealand, BSkyB in the UK.

“We’re a truly international game and the benefit of that is when people say you’re not getting as much as AFL or the NRL, well, if you look at the total cake, we’re doing pretty well.”

Check out Peter Switzer’s SWITZER on Sky News Business Channel, Monday to Thursday from 7pm.

Watch O’Neill on SWITZER TV here.

Plus, read more leadership lessons from the wide world of sports here.

And, got the footy blues? Expand your horizons with these five odd sports.

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, October 22, 2010

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