England rugby exit hurts more than just the fans

 
Tom Mitchell
The Rugby World Cup has become more lucrative since it was last staged
Sportsrisq director

THE AUSTRALIANS have a saying: “When the flag drops, the bluff stops”, and despite England’s mid-week protestations, they were found wanting on Saturday night.

From Twickenham to Twitter, aggrieved fans nationwide have aired their woes on every platform but the potential cost to business hasn’t gone unnoticed, with even the ITV pundits tentatively broaching the subject.

Citing exact sums is as speculative as the Pool of Death predictions proved to be. Figures range from £6m to £3bn, with advertisers, publicans and listed businesses all mentioned as those affected.

Major sporting events have become an innate part of British culture and, as such, more and more companies are building them into their business plans.

However, the problem with sport is that it can go as wrong as often as it goes right; that’s why it is such a compelling spectacle but also why businesses choosing to leverage it need to do so sensibly.

A few years back, following poor end of year figures, the RFU announced that they had “budgeted” for an England Grand Slam. This was received with widespread derision (not least of all in the other home nations) as there was no contingency for an alternative outcome.

Any company approaching a sporting event in this way is equally exposed – and needlessly so given that there are so many ways they can sensibly manage their risk.

In this regard, sponsors have led the field having had their minds focussed on risk through the contractual obligations of paying out winning bonuses. Another savvy group are retailers; while they have long insured consumer promotions and competitions, where they have been most astute is using forecast probabilities to match expected income and exposure.

But it isn’t all doom and gloom; 466,000 rugby tourists to the UK are either here already or expected shortly, bringing with them spending levels forecast at around £869m.

Admittedly, for England fans this is cold comfort and the remaining 27 days of the tournament look to be very long indeed.

RWC 2011 BROADCASTING AND SPONSORSHIP £122m

RWC 2015 BROADCASTING AND SPONSORSHIP £320m

RWC 2011 GATE RECEIPTS £131m

RWC 2015 GATE RECEIPTS £200m