The WRU is punching well above its weight in its share of the total revenue generated by the world's major rugby unions, new research shows
Despite having the smallest population and economy of the 10 so-called tier one unions – which, as well as Wales, are England, France, South Africa, New Zealand, Ireland, Argentina, Australia, Scotland and Italy – the Welsh Rugby Union last year managed to generate 12% of their total combined revenues of £477.2m.
The first analysis of the revenue generated by unions globally was commissioned by the International Rugby Board and carried out by professional advisory firm PwC.
The WRU’s 12% share was the result of its record revenue of £58.5m for the financial year to the end of June 2010.
Only England’s Rugby Football Union and France’s FFR generated greater revenues in the year with incomes of £112m and £77.4m respectively. The RFU generated 24% of the global income.
The analysis also showed that Wales had the highest compound annual growth rate (CAGR) of any of the unions for the period 2005-10 at 13.2%. During that time the union’s annual revenues grew from £31.5m to £58.5m. South Africa had the second highest CAGR at 9.4%, followed by Ireland at 8.8% and England at 7.9%. Only New Zealand saw its revenues fall over the five-year period. This was due to the $34m revenue upside for the British Lions tour in 2005.
Group chief executive of the WRU Roger Lewis said: "This is a welcome and positive reflection of all the hard work we have put in over recent years.
"We have partnerships with Wales’ best brands as well as global brands in addition to worldwide media companies.
"This is a modern success story for Wales and shows that our nation can punch well above its weight.
"To financially outperform all other rugby unions across the world is a tribute to the outstanding people we have working all across the WRU.
"The benefits to Wales, Welsh rugby and the Welsh economy driven by these results are considerable. Over one million paying visitors a year attend a rich array of events at our Millennium Stadium which helps sustain over 2,400 full-time jobs and generates some £100m of economic benefit to Wales."
The WRU’s accounts for the last financial year to the end of June are currently being audited.
Mr Lewis said: "Given the tough market conditions in which we have had to operate I am confident that we will produce results to be proud of. "However, the economic outlook will remain challenging for all us in Wales over the next few years."
Recent research by global sport and entertainment company Lagardere Unlimited estimated that the global rugby market was the fastest growing of any sport between 2005 and 2009. Revenue growth was estimated at a CAGR of 16% – twice the rate of that achieved by football.
However, Largardere estimates that the rugby accounts for less than 3% of the global sports market, with football taking 43%.
Mr Lewis said: "What is exciting for rugby is that it has headroom from considerable growth.
"Having the game of sevens in the Rio Di Janeiro Olympics of 2016 will be a key driver for rugby per se globally."
PwC also provided an analysis of the 10 unions latest audited operating profits as a percentage of turnover.
This shows the WRU ranked fifth at 7%, behind France and Australia at 8%, Argentina at 17% and England top at 23%.
The £25m operating profit generated by the RFU was more than the combined total of the other unions.
The £4.1m generated by the WRU was the third highest behind France in second place at £6m.
The New Zealand Rugby Union was the only governing body in the red with operating losses of £3.9m in 2009.
Mr Lewis that the union’s profit margin had been impacted in recent years by its focus on reducing its debt and increasing funding to the four professional regions and the community game in Wales.
The WRU’s debt now stands at £25m – its lowest level for ten years. It now has a financial model which could lead to the debt being eliminated entirely by 2021.
Mr Lewis said the union’s ownership of the Millennium Stadium was a key factor in its financial success.
He added: "I must pay tribute to the people who made the strategic decision to build the Millennium Stadium, which is such a great vehicle for us in cutting broadcasting deals and attracting blue-chip sponsors such as Under Armour and Admiral."
The lion’s share of the union’s revenue is generated from its television contracts and ticket sales. It also generates income from sponsorship, as well as corporate hospitality and non- rugby events at the Millennium Stadium.
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