European rugby looks set to adopt a new three-tier club tournament to replace the Heineken Cup from next season season, and would become the most lucrative club tournament in the world, the Telegraph reports today.
The nine stakeholders involved are due to sign an accord this week which will lead to the establishment of three new competitions to replace the existing Heineken Cup and Amlin Challenge Cup.
As previously reported here, a TV deal between BT Sports and Sky looks likely to be sealed as soon as the accord is signed, and should see an arrangement similar to football's Premier League where coverage of games is shared among the two broadcasters. Further lucrative deals for French and international television rights should see revenues rise by 50% in the first year.
“This new European rugby championship is going to become the most lucrative in world club rugby,” said Rupert Pratt, managing director of the sport and entertainment agency Generate.
“I would expect the sponsorship income would increase by two thirds or even double within two or three years. I would also anticipate the broadcast revenue to go up by at least 50 per cent and that is probably a conservative figure.”
The tournament is likely to follow the sponsorship model of the UEFA Champions League, where multiple partners are involved, rather than a sole sponsor as Heineken and Amlin had been in their respective competitions. Heineken is still expected to be one of the companies interested in the new arrangement.
“I would expect sponsorship to increase by 25 per cent next year and if BT Sport and Sky Sports do a new broadcast deal, it could be in a very good place, very quickly,” Steve Martin, chief executive of sports agency M&C Saatchi Sport & Entertainment, said.
“It is a really smart play to follow the Champions League model, as that way you get those brands doing the marketing for the tournament and not just one brand but four to six.
“In the current structure, the second tier sponsors were promoting Heineken, but what you can do now is promote your own brand and promote the tournament.
"The trick now is to have the right brands, with the right flair and creativity. As well as the traditional rugby brands, you want to have a bit of a maverick brand in there that has a bit of energy and innovation.
“When you get a brand marketing the tournament for you it is dynamite. That is the holy grail from the marketing point of view. If you are sitting there as a rights-holder of the new tournament, your dream is to have four really successful blue-chip brands all working for you, as opposed to one. Rugby is hot at the minute, it will be an attractive proposition for brands to go in and support it.”
The third-tier tournament will be aimed at development and long-term commercial growth and will include teams from other countries such as Georgia, Romania, Spain and Portugal. Successful teams will be given the opportunity to play off for a place in the second-tier event.
“The new tournaments also pave the way for expansion of the sport into other European countries which again will increase the commercial appeal,” Pratt said.
“Rugby plays well to the stronger regions in Europe and also plays strongly to the business to business audience. It is not so big that it puts people off but it is focused enough around the commercial heartlands of Europe.”
H/T: Telegraph
