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INSIDE THIS ISSUE The challenge facing
the next Premier League OF THE SPORT MEANS FOR THE COMMERCIAL FUTURE FUTURE THE COMMERCIAL MEANS FOR WHAT RUGBY WORLD CUP JAPAN 2019 2019 CUP JAPAN WORLD RUGBY WHAT
adventure
Rugby’s Asian Asian Rugby’s
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August/September | Issue no. 254
Rugby World Cup
5 World Rugby chief executive Brett Gosper talks to Kevin Roberts about his hopes for the impact of RWC 2019 10 Dual award of 2015 and 2019 World Cups helped mitigate Japan risks 14 Developing a licensing programme for Japan 2019 18 What will the World Cup mean for rugby in Asia? 23 Major League Rugby takes slow and steady approach Media 5 28 The challenge facing the next Premier League chief executive: media-rights growth has stalled
Sponsorship & licensing
37 Minor League Baseball seeks to move national sales to “biggest levels in the market” 44 Football clubs have woken up to the power of FIFA and Pro Evo 76 Beko and Barça raise the bar with ‘Eat Like A Pro’ campaign Esports
28 41 MLB aims to ‘democratize’ esports with inclusive push around Home Run Derby VR game Event Hosting
55 Tokyo looks to Olympics to promote technology and spark event hosting resurgence Women’s Sport
60 “Women’s football is about so much more than what happens on the pitch” | Fifa’s Sarai Bareman 37 Retail
72 PGA Tour Superstore revolutionizes sports retail sector as Home Depot of golf Stadia
78 Milwaukee Bucks get aggressive to avoid second-year letdown at Fiserv Forum Management
80 Washington Wizards seek to break the industry mould, find wins with new leadership structure 55 60
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4 www.sportbusiness.com | @SportBusiness RUGBY WORLD CUP State of the Union World Rugby chief executive Brett Gosper tells Kevin Roberts about his hopes for the impact and legacy of the showpiece 2019 Rugby World Cup in Japan, at the tail end of a year when plans for a global Nations Championship foundered on the rocks of resistance from the sport’s established nations.
(David Rogers/Getty Images)
Kevin Roberts According to Gosper, the former in France. Now we are expecting a 40 senior advertising executive who took million domestic television audience for here’s a huge image on the over as chief executive of what was the opening game in September.” wall of Brett Gosper’s Dublin then the International Rugby Board These are interesting times for rugby office of what he describes as seven years ago, the upset created “a union, and for Gosper as he looks ahead “possibly the most significant little bit of folklore” and helped pique to his second World Cup at the helm. Ttry in Rugby World Cup history”. the interest of those who had never In his seven years he has overseen the It shows Japan’s Karne Hesketh previously been hooked on rugby. rebrand of the governing body as World scoring the last minute try that earned It not only gave a boost to a 2015 Rugby, seen Rugby Sevens debut as his team an historic victory over former tournament in which hosts England had an Olympic sport, run a commercially world champions South Africa in the failed to inspire, but drove a massive and successful World Cup in England – 2015 Rugby World Cup. To say the result immediate spike in interest in Japan, which with France is the sport’s biggest was a shock hardly does justice to the helping set the stage for this year’s first TV market – and had the organisation’s scale of the achievement. But it also had Asian World Cup. plans to grow the game around the world an impact way beyond the field of play “We saw a huge uplift in Japanese stopped in their tracks by some of the and the record books. The result lit a TV audiences as a result,” says Gosper. senior members of the rugby club. fuse that Gosper expects will detonate “They went from around 1.5 million for Rugby has played a central role in an explosion of local passion when the previous game to 25 million on free- Gosper’s life. He played for Melbourne Japan, as hosts, get the 2019 Rugby to-air TV for their game against Samoa and Victoria back in Australia and was World Cup underway against Russia in – five million higher than the previous selected for the national U21 side. When Tokyo on September 20. record, for the 2011 World Cup final his advertising career took him to Paris
@SportBusiness | www.sportbusiness.com 5 6 RUGBY WORLD CUP formed inthemedia. You aware are very yousayWhat isheard andopinionsare tois thepublicdimension therole. is amore maverick environment. todifferent agency, anadvertising which and voluminousthatiscertainly with youto reach decisionsiscomplex ofpeopleyouhavethe number to bring around that.the sensitivities politics around theelected and members withinthesportandlayer fervour of are thenationalpolitics, foreseen always surprises,”hesays. havecareer are comeinhandybutthere major sport? bodyofa ofthegoverning environment traditionally staidandmore conservative to worldofadvertising mercurial the andsomewhat the entrepreneurial worldwide board. ofthecompany’s and amember was chief executive (EMEA) for McCann World by his appointment Rugby, he New York aheadof andLondonwhere, inParis,working forleadingagencies for theFrench Barbarians. at Racing ClubdeFrance andturnedout he played –and wasplayer oftheyear– www.sportbusiness.com | “The other major thing I discovered majorthingIdiscovered “The other “The reliance oncommitteesand “Two thingsthatImay nothave “Some oftheskillsfrom myprevious wasthetransition from So how A stellar saw career advertising him @SportBusiness “Other Asian countriesare Asian “Other creating a global calendar thatworks creating aglobalcalendar ClubRugby]. [European Professional clubandcountrythe ECPR between wasfriction there of thecurve.Then Ifeelwereally gotahead subject where like correctly addressing concussion,a with player andissues welfare concerns explains. wehadto “UnderBernard deal issues,”Gosper are facingdifferent they captain BillBeaumont. England former Lapasset andnow firsttheFrenchmanpresidents; Bernard isamajorlayerthere ofemotion.” andwhere fan-centric which isvery useful context intheworldofrugby, decision-making, quite itprovides a and, whileyoucan’tletthatruleyour handle onthecourtofpublicopinion do andsay. you of thepublicandfansineverything Cup as their own andusingCup astheirown that topromote thegame at home.” appropriating thisWorld “Under Bill our focus has been onthe “Under Billour focus hasbeen have stylesand “They different very two under hasalsoserved Gosper “Twitter hashelpedgivemea
(€543m/$602m). payment reported to becloseto £500m ofthebusinesswith an upfront cent per Formula –whichmadeabidfor 30 One CVC of CapitalPartners owner –former discussions withprivate equityfirm complicated theSixNations’ by ongoing nations. rugby emerging matches andincreased exposure for would have created more meaningful divisions. This,arguedWorld Rugby, two promotion andrelegation between nations to create aworldleaguewith and (Southern Sanzaar Hemisphere) including the(European) SixNations the planwasto roll upa bundleofrights Wanda-owned Infront, sportsagency abandoned inJuly. interests oftheworldgame’was designed to promote ‘thebroader bodiesinsport.governing of thepressures facingthisandother nations thatstandsoutasanexample the specificinterests ofestablished with World Rugby’s objectiveswith the desire to thegameinkeeping grow a competitivestructure thatcanmarry inabilitytorugby’s on findconsensus Championship.” theplansforaNationsand developing The issuewas,to say theleast, Backed from the investment by World Rugby’s planforamodel And inthisWorld Cupyearitis RUGBY WORLD CUP
Victorious New Zealand players perform the Haka to after the 2015 Rugby World Cup Final against Australia (Phil Walter/Getty Images)
Though that deal had not been a way as we would have done [if the On the legacy front, the World Rugby concluded at the time of writing, it Championship concept had been Impact Beyond programme reached its remains on the cards and – while realised] because we had a very big target of achieving a million new players various other reasons have been tabled backer.” across Asia by May this year, with some for failing to buy into the World Rugby For the time being at least, the focus 200,000 of them in schools in the vision of the future – it is likely the remains on the Rugby World Cup as Japanese host cities. prospects of a major upfront payment the major driver of global attention But, says Gosper, the impact is not and enhanced future revenues driven for the sport and as the engine for restricted to Japan. by a proven and highly active investor development. “Other Asian countries are played their part. “We will continue to develop the appropriating this World Cup as their “At the end of the day they [the Six Rugby World Cup brand and business own and using that to promote the game Nations and Sanzaar] made calls in the to ensure we can continue to invest in at home. The context of a World Cup in interests of their organisations,” says these areas. It is probably a good thing an Asian time zone projects an affinity Gosper. It’s with more than a touch of that the World Cup falls now so we can with the local markets and shows this understatement that he describes the get on with that.” is not just an event for European and outcome as “a disappointment”. Gosper is hugely excited about the Commonwealth markets,” he says. “We generated a significant uplift in prospects for Japan 2019, both during “Commercially, rugby is quite reliant values over a 12-year period, negating the competition itself and its legacy. on the French and UK broadcast the need to sell off equity in any “The culture in Japan is different of markets, although in recent times that property in the rugby world. course but that’s all part of going to a has been diluted by the rising power “That’s not to say in the future new country. This is the biggest event of the Japanese market. This time the something may not happen. We the country has hosted for 17 years and Japanese market doesn’t sit far behind are hopeful that even if the CVC there is massive excitement. We are them and it is our job to sustain that arrangement moves forward there will pretty sure of a sell-out and 80 per cent after the World Cup. be a return to a discussion of the merits of the country is aware the World Cup is “The Asian context is important of some of what we were proposing,” happening,” he says. so that when people from the USA, he says. “We’ve not seen ticket demand like Germany, Brazil et cetera see a World In the meantime, a back-up plan is this for any World Cup. People from Cup in Japan, it creates a global aura being formulated. around the world are saying this is my that confirms it as a global event and a “It’s being looked at right now with trip of a lifetime and a great reason to valuable global property.” the aim of ensuring high levels of visit Japan. The immediate future of the competition between Tier 2s and with “If Japan performs above Rugby World Cup seems assured. Tier 1s. Of course, we don’t have the expectations it will be brilliant and they Commercially, Japan 2019 is likely to money to finance these in as significant seem to be heading in that direction.” outperform initial expectations and
@SportBusiness | www.sportbusiness.com 7 8 RUGBY WORLD CUP be pushingthrough thenextthreshold. invest inthegamegoingforward. We’ll togive usupliftandcertainty beableto the bidprocess, whichwasrequired to New 2011,whichwas £80m. Zealand compared to England2015(£160m),and to produce asurplusof£370m, France asaWorld Cuphostisforecast of thecompetition. becauseofthetrack record government riskto That’salow the government. the promises have to by beunderwritten with thehospitalityandthoserevenue along tiers sponsorship andsupplier we auctioned-offthesecondary France because,inthebidprocess, explains. surplus,”Gosper will produce alower andthat is thatthecostsare higher we willpassthoserevenues. Theissue record windfallforthegame.Butinfact, ofEngland2015,whichwasa level thecommercial under cent be 20-25per in 2023. stronghold ofFrance to lookforward to isthereturn to thatthere beyond the www.sportbusiness.com | Ren-G, mascotsforthe 2019RugbyWorld Cup,pose forphotographs atthe officialmascotunveilingin Tokyo onJanuary 26, 2018( “That’s down to“That’s down themethodologyof factoring“Without inbroadcast, “We in ofrevenues are confident “We always forecast thatJapan would @SportBusiness Rugby isinastrong situationwith shape. “It’s to notdown me but World thesportisingood believes Gosper are commercial.” they which thedecisionsare asstrategic as isanappetitethere forthatapproach, in Idothink comfort ofEnglandwithAsia. the following That wasthecasewhen more likely to getastrategic approach. bids. youputtwoupare When put oneortwoWorld Cupsupfor complexity ofamulti-nationapproach. bid, despite theadded acknowledging doesn’t ruleoutajointUS-Canada andGosper land ofpromise forrugby onFrancesettled 2023? fresh hostoncethedusthas another WorldWill Rugby take apunton imposing high-riskinfrastructure costs.” travellershigh-spending without high-earning, weeksandattracts seven in economicactivity. It goesonfor event. Japan willgenerate some$2.97bn risk alow good aboutunderwriting togenerates governments feel allows Reflecting on seven yearsincharge, Reflecting onseven interesting“What’s you iswhether a considered The UShaslongbeen aboutthenexttimearound?What “The economicactivitytheRWC and thefans.” Z oursponsors by something demanded critical partofthesportandthatis a andthevaluesremain a movement the sport–World Rugbyismore of IRB may have separated been from rugby. Maybe inthepublic’smind asthevoiceofbrandis clearlyseen character-building sport. World Rugby and wehave asa positioned rugby ethos ofthegame. the thatdoesn’tundermine ensure didn’t have butwe’veworked hard to does create pressures theamateur game hesays.preserved,” “Professionalism built.been has the spiritonwhichbrand rugby thesportretainsof theprofessional era, more thantwodecadessincethedawn player welfare issues.” and weare makinggoodprogress on ofthesportacross theglobe developer toconnection isproving beaterrific Olympic is great forthefuture. Our invested backinto thesportwhich wave revenue commercial withmoney strong leadership. Thegameisona “Our off-field“Our discipline hasevolved, hasbeen “The ethosofrugby Equally importantishisbeliefthat, Koki Nagahama/Getty Images ) continues its international expansion with the opening of its Asia office
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Visit sportbusiness.com 10 RUGBY WORLD CUP W figure was comprised of £140m in figure wascomprised of£140min in2011. Therecord-breaking Zealand Rugby, some£120mmore thanNew forWorld revenues in commercial roughly £265m(€289m/$322m) indicates the2015tournament generated sizeable yardstick. SportBusinessdata body witha thegoverning provided preceding Rugby World CupinEngland question oftimebefore wecame.” 112million,itreally wasjusta with over territory than any part other of the world, gotmore fansasa the world,andAsia’s not thefourth-biggestplaying basein markets, it’sgotthethird, if butgiven from traditionala departure rugby . “Japantells SportBusinessReview was Tom officer chief commercial Hill thesport,”Worldin developing Rugby’s usual suspectsifyou’re trulyinterested pedigree. rugby favourable time-zonebutwithagreater hostinalessthan another Zealand, in2011,losingouttofor theevent New hosting aspirations. Japan hadalsobid continued to thecountry’s overlook be neglectingitsglobalmissionifit thatitwould the obstacles,believing programme.the localcommercial potential to limitdomesticinterest and weakness ofthehostteam hadthe British markets, whilethecomparative competition inthelucrative French and media-rightssalesforthe undermine unfavourable timezonethreatened to to gamble.The betakingacommercial World Cupto Japan, itwasperceived Ben Cronin together with 2019 rights to 2015 and 2023 events World Rugby bundled some media www.sportbusiness.com | Dual awardof 2015and 2019World Cups helped mitigaterisksof hosting inJapan To the increase thechallenge, “You can’tkeep goingaround the bodychoseto The governing ignore voted to award the2019 atthetime, as itwasknown International RugbyBoard Worldhen Rugby, orthe @SportBusiness World Rugbychiefcommercial officer Tom Hill how well we thought it would go with wellwe thoughtitwouldgowith how programmes. come from itshospitalityandlicensing due to 2015 figure, withmore revenues Japan 2019isontrack to surpassthe sales. £50mcomingfrom hospitality remaining withthe revenues, and merchandise £10minlicensing sponsorship revenue, media-rights income,around £65min value since 2015 increased more than tenfold in Japanese mediarightshave “Originally we were cautious about cautiousabout wewere “Originally Contrary to expectations,Hill says supplier categories for £18m out 2019 official sponsor and Japanese agencyDentsubought the case.” hasn’t been but thatcertainly the timezone, for sponsorsas2015,given potentially itwouldn’tbeasattractive are up.revenues We thinking were than2015.Sponsorship sales are better are up.Broadcast revenues Ticket says. anticipated,” thanwe’dever growth he more positiveintermsbut it’sbeen of regards to andbroadcasting, commercial “Commercial revenues are up. are up. revenues “Commercial
RUGBY WORLD CUP Dual award those with TF1 in France and ITV in the significantly from 2015 to 2019,” says Hill credits the decision to announce UK. Hill. “The Japanese realised they were the hosts for the 2015 and 2019 The decision to host the event in capable and able, and they knew the tournaments at the same time, and in Japan – combined with the country’s tournament was coming to Japan, and some cases package the media rights surprise victory over South Africa in the therefore the broadcasters wanted to to the 2019 event with either the 2015 2015 tournament – has helped deliver secure those rights.” or 2023 tournaments, for helping to a more than tenfold increase in the Hill says he would like to reduce overcome broadcaster misgivings about value of the Japanese domestic rights. World Rugby’s overreliance on a small the first Rugby World Cup in Asia. Japanese agency Dentsu paid roughly number of media markets. He says he “I think partners would prefer to have £1.3m (€1.6m/$2m at the time) for the was disappointed by the performance of much greater visibility of the long-term, 2015 tournament but this increased to the rights in Australia, which served to so a number of our broadcast deals were £16.1m (€18.1m/$20m) for 2019, making offset some of the gains made in Japan. dual deals, including 2019 and 2023,” he Japan the third-most valuable broadcast SportBusiness Media data indicates says. market for this year’s event. Fox Sports and Network Ten paid just The bundling strategy looks to have “That infamous game against South £10.8m for the 2019 rights, compared paid particular dividends in France, Africa in Brighton was effectively the with the £37.3m Fox Sports and Nine where broadcaster TF1 is thought to most valuable game in rugby’s history paid for the combined rights to the 2011 have overpaid in acquiring the rights because the broadcast rights jumped and 2015 tournaments, sold when the to Japan 2019 for £41.9m in order to secure an option for the rights to the tournament in France in 2023. In the UK, ITV paid a combined £100m for the rights to the 2019 and 2023 tournaments, allocating roughly £40m to the Japanese event. “People appreciate that once they’re in and they’ve secured the rights, they don’t want to let them go, because they know they’re so popular that someone else will take them. You can’t sort of flit in and out of being a partner or a broadcaster because you’re going to struggle to secure rights again in the future,” says Hill.
The 80/20 rule (Koki Nagahama/Getty Images) Global Rugby World Cup television rights are sold by Rugby World Cup Limited, the tournament organisers. COMMERCIAL REVENUES, REVENUES, RUGBY WORLD RUGBY CUP 2015 WORLD CUP 2015 RWCL is a wholly-owned subsidiary of World Rugby and is advised on its media-rights sales by the IMG agency. After RWCL and IMG agree on a sales ospitalit strategy for a respective market, IMG sales negotiates with local broadcasters and £50m drafts licensed media agreements. icensin RWCL remains the signatory to all £10m deals. £265m “It all ends up being about o ercial e ia ri hts relationships,” says Hill. “They [IMG] re enue £140m have better relationships with some ponship broadcasters and we have better re enue relationships with others, but together £65m we get it done.” Eighty per cent of the Rugby World Cup’s media revenues come from just 20 per cent of the 207 territories in which it is shown. The biggest deals are Source:Source: SportBusiness SportBusiness data
@SportBusiness | www.sportbusiness.com 11 12 RUGBY WORLD CUP previously partnered with events like withevents partnered previously Broadcast Services. Thecompanyhas IMG Media’s withHost jointventure International Games Broadcast Services, to through itsbroadcast partners World aworldfeed Rugby provides well intheshorter format. and theUSteam beginning to perform schedule forthe2020Tokyo Olympics partofthe change, withRugby Sevens Series. Butthisratio might Sevens from theHSBCWorld cent per Rugby from thefifteen-man World Cupand15 ofitsrevenues cent earns about85per markets. itstands,World As Rugby appealing to broadcasters insome more mightprove rugby or women’s althoughHillgrowth, says Rugby Sevens US forthenextwave ofmedia-rights organisation islookingto andthe Asia its mostsignificantmediamarkets. 2019 willgenerate around £142mfrom estimates Japan SportBusiness Review 2015, 2019and2023into account, between the splitofmediarevenues Australian team better. wasperforming market wasmore competitiveandthe www.sportbusiness.com | The yearwillbethefirsttime Like manyarights-holder, the Taking World Rugby’s allocationsfor @SportBusiness “You goingaround can’tkeep Tom Hill |chiefcommercial officer, World Partners, having dealswith renewed World Rugby’squotaofsixWorldwide Cup. rightstoworldwide partner theWorld of also includesthesaleanddelivery which stretches backto theearly1990s, IMG’s relationship withWorld Rugby, Sponsorship sales highlighted,” he says. of play thatyou wouldn’twantto be angleoranarea youadifferent shows and you’re notcringingorwincingif works andwhatit’sgoingto looklike and quality. “You it exactlyhow know control, continuity willensure the move consistent Hill says broadcast coverage. toGames, helpingthem more provide GamesandtheWinterthe Asian Asian the sport.” indeveloping truly interested the usualsuspectsifyou’re Rugby The agency has succeeded in filling hassucceededinfilling The agency agency Dentsu and its partner theJapan anditspartner Dentsu agency to the2019tournament to Japanese sponsorshiprights Supplier and Official Sponsor Official second- andthird-tier World Rugby opted to sellallofits Dentsu rightsbuy-out bidding. with France, SouthAfricaandIreland to return to timezone aEurope-friendly stage, thetournament wasguaranteed announcedattherenewal had notbeen the nextedition.Although2023host protected they ensure theirpositionfor toprepared pay the25-per-cent upliftto for 2019.It wasthoughtthebrands were theirWorldwiderenew Partner rights £10and£11mto paidbetween then andSociététhat LandRover Générale SportBusinessSponsorshipindicatedby World CupinEngland.A2017report £7.5mbetween and£9mforthe2015 going rate foraWorldwide was partner onsponsorexpectations.delivering 2011 demonstrates is thattheproperty from alsorenewals the majoritywere after the2015event. Hill says thefact Mastercard, Société andDHL Générale Emirates, Heineken, LandRover, understands the understands SportBusiness Review (Toru Hanai/GettyImages ) RUGBY WORLD CUP RUGBY WORLD CUP 2019 SPONSORS