Rugby: Moving the goalposts

Eden Park will host eight games at the 2011 World Cup, rather than the 13 games originally forecast. Photo / Getty Images

A full analysis of the 2007 tournament and an estimated 100,000 fewer tickets to sell are the factors behind the increased predicted loss of hosting the 2011 World Cup.

Last week it was revealed the predicted loss of hosting the next Rugby World Cup had risen from $30 million to almost $40 million.

Reasons behind the sharp rise were not entirely clear until now.

Martin Snedden, the man in charge of the 2011 World Cup, says the $40 million figure is referenced against an original estimate that was made in 2005 when the New Zealand Rugby Union was putting together its hosting bid.

Back then, the NZRU's understanding of the tournament was not as detailed as it is now. They had a handle on the likely costs and revenues but had to make assumptions and work with mocked rather than real scenarios.

"In the original bid document, the NZRU put together a mock draw," says Snedden. "That was to give both them and the IRB a feel for how things might work both on the playing front and commercially.

"In that mock draw they had 13 games being played at Eden Park and probably about two thirds of the total number of games being played in the big three centres. They were using 10 venues overall.

"For the last 18 months we have been working through a budget review. We are still one or two weeks away from finalising but we know now what the picture is looking like."

The organisers of the 2007 World Cup in France have provided full access to their books and with the 2011 schedule now complete, the budget has been revised.

Because New Zealand has gained permission from the IRB to use 13 and not the recommended 10 venues, the mock draw used in 2005 and the real draw differ considerably. Eden Park will host eight and not 13 games and that change alone dramatically reduces the number of available tickets.

Eden Park's World Cup capacity will be 60,000 (which was the expectation in the original bid document) and AMI Stadium in Christchurch is the next biggest stadium with 45,000 seats.

Wellington will have a 40,000 capacity with Waikato, Rotorua, Dunedin and North Harbour expected to be close to 30,000.

Snedden says there is still uncertainty about precisely how many seats will be available in each stadium as some are still in construction while the original bid document also underestimated how many seats will be allocated to non-paying media.

"We are going through our own audit at the moment to get an exact handle on the number of seats so we are not embarrassed by selling tickets that we don't have.

"But now the draw has been made, we have fewer seats available than we did in the original document."

Detailing the drop in ticket numbers from the original draw to the actual draw can't be done accurately until all the capacities are assessed. However, as an illustration, Snedden makes the point that even if four of the 13 games originally allocated to Eden Park had been given to Christchurch (which they haven't), there would be 60,000 fewer seats.

When the capacity audit is completed, it is expected to show there are about 100,000 fewer available tickets than forecast in 2005.

"The decreased number of seats is one factor," says Snedden, "and the other is that we have also downscaled our forecast on the number of sales. The original document worked on the basis of selling all the tickets. We are now basing our forecasts on what happened in France."

The revision has not been major. Confidence is high that the smaller regions will either sell-out their games or be very close to selling out. The knock-out games are not a concern either, not the tests involving the All Blacks.

It's the games in the big centres not featuring the All Blacks - such as South Africa versus Fiji in Wellington and Ireland versus Italy in Dunedin - which are the real concern. "These are the games we are really going to have to promote hard, to really sell. We have budgeted for a position where we think we will end up.

"We don't want to end up worse off but nor do we want to underestimate."

While the forecast on the overall loss has increased, Snedden says there is also the possibility of the actual losses being smaller if sales are higher than expected.

The total loss could be cut by as much as $20 million if all the tickets are sold. A 100 per cent success in ticket sales is unlikely but confidence is still high the tournament can outperform the budgeted goals as there are indications that overseas visitor numbers will not be reduced by the global recession.

Feedback from overseas travel agents has been encouraging. Next week they will be able to apply to become official sellers of tournament packages and many have indicated interest.

There were also vast numbers of travelling fans in South Africa earlier this year following the Lions tour which is another good indicator that major rugby events can counter the recession.