The Super 15 riddle: Is less more?

While SA Rugby deals with charges from the IRB about bringing the game into disrepute and receives a sanctioning or fine regarding the senseless “masking-tape protest” there are distractions like the roll-out of the Currie Cup around the country, Craven Week in East London, Tri-Nations on July 25 in Bloemfontein against the All Blacks, Rugby World Cup bid announcement on July 28 and there seems to be an eerie quiet before the storm on the structuring and financing of the Super 15 for 2011-2015.

At last week’s SA Rugby President’s Council meeting in Johannesburg on Wednesday the presentation of the “big lie” that South Africa had a Super Rugby franchise started. This all of course to try and explain the mess that SA Rugby finds itself in and of course to woo the political masters that the Southern Kings could play seven friendlies against overseas teams in 2010. A spin story so inconceivable and preposterous, as it costs at least R1 million a game for team assembly, flights, accommodation, player and management costs that no one is mentioning. Fine! Who will pay for this stop-start charade?

The reality is that South Africa and its Southern Kings are scripted out of the Super 15 from 2011-2015.

The proposed tournament structure has been submitted to Newscorp and SuperSport already. Five teams a piece for South Africa, New Zealand and Australia. You might ask why the Southern Kings were never consulted as to structures and fixtures before the submission or even privy to the submission in a transparent and open process as it defines their future or non-future for the next six years. Too sensitive a subject to discuss at the president’s council?

This single Super Rugby tournament is unquestionably the well from which SA Rugby, the ARU and NZRU derive the bulk of their income — from the Newscorp and SuperSport broadcast revenues — yet the structuring of the tournament and its domino effect down into the structures receives scant regard. Already the tournament is being cobbled together with a hastily assembled little bit of this and a little bit of that recipe. Not a good sign that SA Rugby leadership has a solid grasp of the implications:

1. The sixth SA Super Rugby franchise — the chit-chat and promises Marinos made to Watson at the president’s council meeting last week were just blah blah blah to placate the government constituency. SA Rugby has made promises that will never be fulfilled. Gone is the Rugby Academy in the Eastern Cape and gone is the sixth Super Rugby franchise.
2. The Super 15 Super Rugby tournament and 3 X 5 team conference system — the 15th team is the fifth Australian franchise team and that goes to Australia.
3. A relegation and promotion series — essential for developing a hot television product with a “B” division.
4. The revamp of the Currie Cup — essential for streamlining the six franchises and 14 unions.
5. The Sanzar broadcast deal — essential to retaining at least the same revenue stream.

Sanzar, the three-nation grouping of South Africa, New Zealand and Australia, which runs the Super 14 competition, boasted a 25% increase on the old contract when announcing a new TV rights deal late in 2004.

The original $555 million 10-year deal signed when rugby union went professional was structured to compound by 7% annually, rising to $82 million in the final year. Yet when the new five-year contract of $323 million was announced for the 2006-2010 Super Rugby tournament, the SA Rugby Union declined to say it was less than the final five years of the old deal.

So what will Sanzar and SA Rugby say when its next contract is signed?

The current deal expires on May 30 of the 2010 season and Sanzar’s new competition structure was scheduled to be in the hands of one of the rights holders, News Limited, by June 30.

News Limited owns the rights in Australia, New Zealand and Britain. The rights in South Africa are controlled by the SuperSport network.

News Limited’s half-owned Australian pay TV network, Fox Sports, is making record profits and New Zealand’s Sky Channel values Super 14. Channel Seven, which occasionally shows rugby Test matches, is the only commercial free-to-air network not preoccupied with pumping profit into redeeming debt.

Sanzar therefore believes there is enough competitive tension for there to be a modest increase on the last deal especially if you are increasing the number of games from 91 to 120.

But increased content will be the principal driver of any rise in rights fees negotiated by the international sports agent Ian Frykberg, who is again representing Sanzar.

The number of Super 14 games will rise from 91 to 120 yearly from 2011, when it becomes a Super 15 competition with an additional Australian franchise.

Significantly, the competition will be restructured to create more local derbies.

Games played in Australia will rise from 26 to 40, each of the three nations producing a champion, guaranteeing South Africa, New Zealand and Australia at least one team each in the play-offs.

Last year Super 14 produced only one game in Fox Sports’ top 100 programmes. Even more worrying for the Australian Rugby Union is that its overall ratings at that point were down 24% on the previous year.

Sanzar are still waiting for their paymaster, News Ltd, to provide an answer on whether they want to continue bringing rugby to the TV masses in New Zealand, Australia and South Africa, but more crucially how much they are willing to pay.

Rupert Murdoch and his News Ltd are the lifeblood of the game in the Southern Hemisphere and the fact that they have not come back to Sanzar yet has to be worrying, but they have till the end of August to respond.

The current deal has probably received more media coverage than the two previous contracts, so it would have been difficult for News Ltd not to know what was going to be offered, yet South Africa have acquiesced on two fronts to their Sanzar partners.

The first is the concession of SA Rugby’s share of 38% of the Sanzar revenues to 33%, which in rands and cents is the loss of R2 million a year that would have gone to each of Saru’s 14 rugby unions, or R10 million over 5 years. Another more sinister prospect of this, is that this funding of R30 million a year over 5 years now goes to SA Rugby’s arch rivals, New Zealand and Australia, which will be used to bolster and buttress their unions against South Africa. Call it duped if you will.

Secondly, the writing was on the wall last year already by way of agreement at the multiple Sanzar CEO meetings that the 15th Super Rugby franchise will be a franchise added to the four Australian franchises — to round it up to five Super Rugby franchises each for South Africa, New Zealand and Australia. The fact is that the sixth South African franchise was written out of the script then. Call this hoodwinked if you will and there are a lot of people who fell for this bait — “Oh we will launch the Southern Kings Super Rugby franchise on June 16!” And then? Nothing.

Sanzar almost split earlier in the year over their plans to expand Super Rugby to a Super 15 as they had more matches to offer their broadcasting partners in an expanded and reformatted Super 15 with 120 games and an unchanged Tri-Nations to News on June 30.

According to NZRU chief executive Steve Tew, “we tabled all the documents as per the contractual schedule on June 30”.

What do we hear from SA Rugby on the Sanzar broadcast deal? Nothing. Absolutely nothing but a deafening silence.

It is way too sensitive a topic to go near, especially when the president’s council can be so easily distracted with the IRB charges of bringing the game into disrepute, the Currie Cup, Craven Week, the pending Tri-Nations and the Rugby World Cup Bid announcement in two weeks.

This debacle is bound to end a few careers in rugby.

Then bear in mind the SA Rugby President’s Council elections looming (February 2010) when the deck gets reshuffled and the score card of who was aligned to which failed project will loom large as votes are canvassed.

Out with the old and in with the new!