Rugby Breaks into the Big Leagues

The sport's quadrennial World Cup is expected to draw 4 billion viewers and generate income of $200 million. But can it catch on in the U.S.?

by Carol Matlack

Never heard of Jonny Wilkinson or the Haka? Chances are, you will soon. The Haka, a Maori war dance, is performed by New Zealand's national rugby team, the All Blacks, before every match. (For a demonstration, click on the YouTube video above.) And Wilkinson is a star player for England, the defending world rugby champion. With the Rugby World Cup opening in Paris on Sept. 7, both Jonny and the Haka are poised for a big dose of global exposure.

Sure, many Americans still think of rugby as an oddball, often violent, sport played in former British colonies. And this year's World Cup has gotten off to a rocky start, with leading news organizations refusing to cover some preliminary events to protest restrictions placed by the Cup's sponsors on the transmission of photos from matches. The boycott was continuing on Sept. 7, just hours before the scheduled kickoff game between France and Argentina.

Even so, it's clear that rugby's popularity, and profitability, is growing fast. The quadrennial World Cup, established only in 1987, is expected to draw a worldwide television audience of 4 billion over the next six weeks and generate $200 million in revenues, according to data compiled by Sportcal, a London sports consultancy.

To be sure, those figures pale in comparison to soccer's World Cup (BusinessWeek Special Report, 6/5/06), which generated $2.6 billion last year. Still, says Robert Ryan, New York-based director of London's Setanta Sports, which has North American TV rights for the Rugby World Cup: "It's the largest sporting event in the world this year, by far."

Attention from the Biggies

Already the Cup is drawing heavyweight corporate support. Credit-card group Visa International is one of six companies that have shelled out $6.5 million apiece to become top corporate sponsors. Another half-dozen, including Toshiba (6502.T) and Heineken (HEIN.AS), are paying more than $3 million each for second-tier sponsorships. Their backing stands in sharp contrast to the recent meltdown in corporate support for cycling teams (BusinessWeek, 6/7/07) embroiled in doping investigations.

The Cup's organizers have not released details on payments for TV rights. But host country France's leading TV channel, TF1 (TFFP.PA), has disclosed that it paid $110 million for broadcast rights to the 2007 and 2011 Cups. By contrast, Sportcal estimates Setanta paid only $1.5 million for rights in the U.S. (Setanta declines to comment on the amount it paid.)

Setanta says Rugby World Cup coverage will be available to 60 million U.S. households on a pay-per-view and subscription basis, via cable, satellite, and broadband. Fees are as little as $9.99 for a single game. But viewership could dwindle fast if the U.S. Eagles team is eliminated early—a likely scenario, since it has been grouped with powerhouses England and South Africa in the opening rounds.

Growing Appeal

Despite rugby's association with British Commonwealth countries such as Australia, New Zealand, and South Africa, it enjoys a surprisingly strong following in places as far-flung as Argentina and France. Even in the U.S., an estimated 200,000 to 250,000 people play rugby in schools and amateur clubs.

In France, rugby's popularity extends into the highest reaches of business and government. For years an informal club of French luminaries including AXA (AXA) insurance Chairman Claude Bébéar, Vivendi (VIV.PA) Chairman Jean-René Fourtou, and former Finance Minister Thierry Breton, has traveled by private plane to rugby matches. For this year's World Cup, Paris luxury temple Chanel is offering well-heeled fans the chance to buy a $2,700 limited-edition leather rugby ball.

Indeed, one of rugby's commercial attractions is that its followers are generally affluent and well educated. Setanta Sports says that 75% of U.S. fans have annual incomes over $75,000 and that 95% have college degrees. Now, promoters are trying to pitch rugby to the masses. In one recent advertisement, sportswear maker Adidas (ADSG.DE) paired up England star Wilkinson with celebrity soccer player David Beckham. The ad shows Wilkinson teaching Beckham how to score on penalty kicks.

Could this be a breakthrough year for rugby? An unexpectedly strong performance by the U.S. or another outside contender would help a lot. So could wider circulation of a popular French calendar, Dieux du Stade, or Gods of the Stadium, featuring locker-room shots of hunky French rugby players. Four years from now, Haka might even have become a household word.

Matlack is BusinessWeek's Paris bureau chief.