The turf in Auckland’s Eden Park stadium is freshly laid and verdant green, but three floors up, the corporate hospitality suite remains unfinished. Wires hang in loops from a ceiling almost devoid of panels, while the stacks of tiles scattered about the bare concrete floor are being used as makeshift tables, laden with wine glasses, brochures and a scale model of the redeveloped ground.
Martin Snedden, chief executive of New Zealand’s 2011 Rugby World Cup organising body, steps up to address about 200 members gathered in business suits, fluorescent jackets and hard hats. “I think we missed a huge opportunity when we brought you all up here,” he grins. “We should have said the only way back down is to buy your way out with some corporate sponsorship.”
The laughter is good-natured but subdued. A funding crisis is a rite of passage for any international sporting tournament. As the flagship venue for next year’s event, Eden Park is no exception. About 10 per cent of the NZ$240m (US$168m) cost of rebuilding the stadium is currently unfunded, and the local media have been buzzing all day with the latest financial disputes between Auckland’s councils. The following week the councils agreed to underwrite a NZ$40m loan for redevelopment work. One reason for tonight’s event is to see what pledges can be rustled up from the ground’s long-term supporters.
But New Zealand, like many other countries, is only slowly emerging from a deep recession, and beneath the pride over hosting the event, there is a note of unease in the room.
“I wonder whether we are overinflating it,” says Peter Garvey, managing director of grounds maintenance business Turfgrass Specialists. “We are all in business here and there is an underlying concern.” His friend Mike Mafsen cradles a beer and looks across to an empty stand: “What worries me is that, if the All Blacks don’t win, then a lot of money is being borrowed for all this.”
It is typical of New Zealand, and its profound reverence for its national sport, that the borrowing would seem to matter less if the All Blacks triumph next year. Despite having won three out of every four international matches since they started touring in 1905, the team has not lifted the Webb Ellis Cup since 1987, when the event was co-hosted with rivals Australia. Even being chosen as host nation is seen as an honour to outweigh most financial concerns.
Speaking the previous day in the organising body’s modest 11th-floor offices overlooking Wellington’s waterfront, Snedden cheerfully admits the 2011 World Cup is likely to end up NZ$39.3m in the red – even before taking into account the NZ$550m to be spent rebuilding Eden Park and six other stadiums. The business plan, he says, is “quite the opposite of commercial”.
“Financial reasons would have taken us in the opposite direction. This was about the feel of the thing; about what makes New Zealand different from any other country that could host it.”
Such blatant disregard for the commercial side of sport seems out of place at an event that has become the world’s fourth-largest international sporting tournament, after the Olympic Games and football’s World Cup and European championships. Rugby’s previous World Cup, held in France in 2007, made in excess of £200m (US$308m) for the International Rugby Board through broadcasting, sponsorship and hospitality, plus £147m for the host union from ticket receipts. Since 1995, no other host has failed to make a profit on the event.
But to reduce the World Cup to a series of business transactions is anathema in New Zealand. With the possible exception of Wales, no other country can match its obsession with the game. “To say rugby is a religion would be to understate it a long way,” says Murray McCully, a founder of Wellington’s parliamentary rugby team, who juggles the portfolios of foreign minister and minister for the World Cup.
New Zealanders often divine the fortunes of their country as a whole from the performance of the national team. A common piece of stock market lore attributes swings in share prices on Mondays to traders’ gloom or elation over the All Blacks’ weekend performance. Politicians are even more superstitious: the gut-wrenching semi-final loss to France in the 1999 World Cup is popularly thought to have contributed to the government being thrown out of office in a general election three weeks later.
Next year’s tournament will coincide with a parliamentary ballot for the first time since then, and John Key, prime minister, has declared – tongue barely in cheek – that the hosting of the World Cup is his second-biggest priority after fixing the economy.
“The thing about New Zealand is that people care about rugby more than about most policy issues before the government,” says McCully. “While I can get away without too much scrutiny about foreign affairs, I can’t make even minor decisions about rugby without everyone having an opinion. I have the prime minister breathing down my neck every five minutes to make sure everything’s running well.”
In most countries, managing a sporting event would be seen as beneath the status of a foreign minister; in New Zealand, McCully has faced opposition calls to be stripped of his World Cup portfolio because he was concentrating on foreign affairs too much.
Mounting an event of this sort in a country as small and remote as New Zealand poses considerable challenges. In business terms, the World Cup is a stimulus package for the domestic tourism and hospitality industries, boosted by stadium gate fees for the host union and broadcast, sponsorship, merchandising and hospitality rights for the IRB. But the further the event is from the game’s centre of gravity in Europe, the less tourism it attracts. The 2011 event’s 70,000 international visitors will make up just a fifth of those who travelled to France in 2007.
With a population of less than 5m, New Zealand also has less capacity to accommodate spectators: despite the stadium rebuilding work under way, its 1.5m ticket sales will be the smallest number since the 1995 event was held in South Africa. Broadcast rights will also be affected by large differences in time zones; the country is as much as 13 hours ahead of Europe, meaning the major games will be screened in the early hours of Saturday mornings in the UK and France.
The geographical difference was starkly illustrated in a 2008 study by Deloitte, which concluded that while an event in Europe could be expected to contribute £570m-£1,140m to the host nation’s economy, tournaments in the southern hemisphere are worth £260m-£430m. The same study estimated the 2011 World Cup would add £211m to New Zealand’s economy. Indeed, in 2005, many in the game were surprised when New Zealand beat off perceived stronger bids from Japan (which will stage the 2019 tournament instead) and South Africa. Snedden puts it down to sheer passion. “New Zealand is small, but it has a collective interest in rugby that is greater than anywhere else.”
For rugby fans, that single-minded obsession may prove potent. Normal life in New Zealand will be suspended for the duration of the event: school holidays are being shifted to coincide with the climax of the tournament, while key matches are expected to be broadcast simultaneously on all four of the country’s major television networks.
Three cruise ships have been requisitioned to provide 5,500 extra beds for Auckland, Wellington and Christchurch, which are all expected to sell out of hotel rooms, while training programmes are under way to ensure there are enough hospitality workers to service the surge of tourists. Match kick-off times will also be tailored to better suit European audiences. “The normal rules will be adjusted where they need to be to ensure the Rugby World Cup works,” says Snedden.
This single-minded commitment has not always worked in New Zealand’s favour – the country was removed from sub-hosting games in the 2003 event because domestic corporate sponsors refused to cede places to the IRB’s own sponsors.
The growth of rugby is also strangely bittersweet for New Zealand, in particular. Increasingly, major sporting events require big countries to host them – the $44bn cost of the Beijing Olympics was equivalent to four months’ worth of New Zealand’s entire economic output. According to Kit McConnell, the IRB’s Rugby World Cup chief, the 2015
tournament in England is “funding the game” and 2019 in Japan is “growing the game”. Where this leaves small countries like New Zealand, regardless of their commitment to the sport, is open to question.
In truth, cynics believe the IRB’s decision to award the World Cup to New Zealand was tinged with sentiment; this is probably the last time the country will actually be able to accommodate the event. “The logistical challenges to the tournament will only grow for future hosts,” McConnell says.
Whether New Zealand wins or loses in 2011, it is unlikely the All Blacks will play another World Cup match on home soil in the foreseeable future.