Graeme Muller paints an interesting picture regarding how technology will impact our lives in the next several years ( http://www.nztech.org.nz/nz-will-see-dramatic-tech-changes-in-the-coming-decades-nztech-leader-says/ ). Even if he is half right, we are in for plenty of changes to the way we do things.... and we won't have to wait long!

Why then, do our sports and entertainment venues continue to offer the same crappy off-field and off-stage experience that they have for years? If we look at the new San Francisco 49ers stadium or the L.A. Live entertainment precinct, we find technologies being embedded that make our experiences better. Things like sending our mobile device offers in real time like better seats for a cut price (because they are not going to be sold anyway), different menu selections delivered directly to our seats or car parking options as we arrive at the venue. They offer complimentary attractions before and after the event. We leave feeling we have had a real experience!
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NZ venue operators have fallen into the trap of not investing because of a perceived lack of funds, with the result that the underinvestment has created a progressively worse experience and exacerbated their financial loss. They need to learn from their overseas counterparts and invest in new technologies, offer their patrons more and thereby differentiate themselves from the other attractions that are competing with them for their patrons discretionary dollar.

SKY TV’s game plan is not too hard to understand: hold onto rugby at all costs!! SKY has approximately 800,000 subscribers and about 70% of those subscribe to sport... in NZ that means rugby. In other words, sport equates to $400m of SKY’s revenue (i.e. 50% of all revenues) because you have to buy the basic package to get the sport package and if we assume profit is split evenly across revenues, half of SKY’s $175m NPAT relate...s to their ‘ownership’ of rugby broadcasting.

Simplistic... sure, but it shows the importance of rugby to SKY’s bottom line.

The other half of the picture is likes of Netflix, Lightbox, Amazon, iTunes, etc., all now competing with SKY for video on demand (movies and TV series), plus TVNZ and Media Works (TV3 and Prime) competing in the reality and news space. In summary, SKY is going to lose market share in the movies, TV series and news space and so must control live sports to drive revenues across their distribution mediums. And if you want to own live sports in NZ, that means rugby.

So, what does the future look like for SKY? Not good. A little over a year ago, Spark entered into a 50:50 JV with Coliseum (the guys who pinched the EPL off SKY a couple of years earlier and are backed by NZ billionaire Peter Cooper). Some serious horsepower in this JV and if they really want to go after rugby sports rights in New Zealand, they have a financial resources to do it.

In late 2014, SKY secured the NZ rugby rights through to the end of 2020. Given the speed at which the entire cable-satellite-internet space is changing, SKY will want to secure a new deal well before the end of 2020. The question we are left with is how will New Zealand Rugby financially take advantage of having at least two big players duking it out for their broadcast rights?

The answer is not simply running a tender, which is what NZ Rugby currently does. What NZ Rugby needs to understand is how much SKY and the Spark/Coliseum JV will pay, and how do they package the rights to deliver most value?

For the reasons noted above, the answer to the first question is that SKY (at least) will pay way more than they pay now.

The answer to the second question is to break down the rights into a series of complimentary packages across different mediums (both live and delayed) and that deliver ongoing content via lifestyle programming, all with the objective of delivering a bigger revenue pie to NZ Rugby.

Make no mistake, any Waterfront Stadium is directly linked to what happens at Eden Park. What we are witnessing is Facilities Auckland’s not-to-subtle attempt to bring the Eden Park Trust Board (EPT) to the table.

A bit of background. EPT successfully lobbied the Council to have the Eden Park number 2 ground (the cricket pitch over the Western Terrace from the main ground) zoned for a major housing and retail development within the proposed Auckland Unitary Plan. The outcome if the Unitary Plan is passed is enough development rentals to offset the EPT’s $8m annual loss with significant funds left over. You can now understand why EPT rejected Facilities Auckland’s request that they throw their lot in with the other facilities in Auckland and have the whole lot run by a central body... they were in control of their own destiny. Well almost.

The problem for EPT is that they are contractually obligated to Auckland Rugby and Auckland Cricket and Auckland Cricket say there’s no way you are developing the number 2 ground without writing us a very big cheque! In other words, EPT needs to do a deal with Auckland Cricket.

How this is currently manifesting itself is Facilities Auckland pointing out that EPT’s annual loss and lack of investment means that in 10 or so years the Council (who control 5 out of 9 seats on the EPT) will be facing a $120m upgrade bill. The question Facilities Auckland rightly poses is “should we spend $120m on Eden Park or on (say) a Waterfront Stadium. However, as noted above, if EPT do a deal with Cricket and the Unitary Plan is approved, they don’t need Facilities Auckland and they can quite happily live with the number of events and attendance they currently have.

The impact of all this on the proposed Waterfront Stadium is that we will never build a 35,000+ Waterfront Stadium if the EPT can develop the number 2 ground. If they can’t, Facilities Auckland’s question regarding where to spend the money is valid. If EPT can develop number 2, a boutique waterfront stadium of 20-25,000 could quite easily live alongside Eden Park at 50,000. Both would have associated retail precincts, albeit Eden Parks’ would be more housing centric while Waterfront more entertainment focussed.

I’ve also heard people say that we should ditch Eden Park, “sell it off and use the money to develop and new stadium downtown” has been the call. The problem is that the EPT deed stipulates what happens if it is sold or leased. In summary you need 7 of the 9 votes to get it passed. That means either cricket or rugby (who have 2 votes each) have to agree with Council and then any proceeds from the sale or lease enable EPT to invest in another facility where Auckland Rugby and Auckland Cricket have the same rights they currently do, or they can simply divide up the funds “...for the benefit and advancement of cricket, rugby union, or other athletic games and pursuits of an amateur character within the Region...”. And before you jump on the “or other athletic games” phrase, the history of the document makes it pretty clear that Auckland Cricket and Auckland Rugby are the parties to bear the most benefit.

So where to from here re the Waterfront Stadium? EPT will try to solve their number 2 ground issue with Auckland Cricket and that might be as simple as writing them a big cheque with the funds provided by a cashed up developer. That will push any Waterfront Stadium debate to a smaller, not bigger stadium... and Facilities Auckland will be cut out of the discussion.

It is fourteen months since the dramatic conclusion to the 34th America’s Cup and we finally have an America’s Cup World Series venue... in Bermuda. Another will follow shortly and then either San Diego or Bermuda will be announced as hosts for the 35th edition of the America’s Cup. Sadly, this 14-month post-Match information vacuum has become typical of the modern America’s Cup.

The lack of information (read visib...ility) is not what sponsors want. In the past (say 32nd AC), sponsors would value their contribution primarily on the visibility during ‘Cup Year’, with less than a third attributed to the combined three previous years. Due to team cashflow needs, sponsors would generally agree to even out their sponsorship payments over the entire cycle.

For increased sponsorship, sponsors made it clear: increase the visibility. The America’s Cup World Series was an attempt to achieve this and was met with a generally favourable response from sponsors, teams and host cities. Sure, initial attempts to extract large venue fees were resisted by host cities, but over time a model was developed that delivered a cost neutral World Series event for ACEA. The model recognised that politically, host cities were reluctant to pay large venue fees but were more than happy to spend similar amounts on facilities and services that until then ACEA had been funding.

In summary, by the final America’s Cup World Series event in Naples, a virtuous circle had been formed: self funding events led to more visibility led to more sponsorship dollars for teams, etc, etc. What was missing was a central body to manage the America’s Cup World Series into the future, one that was not a subsidiary or solely under the influence of the Defender.

It is not generally known is that such a central body had been discussed and was a potential outcome of the World Sailing Teams Association (WSTA) established to organise and manage the Louis Vuitton Trophy of 2009 and 2010 (i.e. a series of events around the globe that built on the successful Louis Vuitton Pacific Series held in Auckland). Importantly, the WSTA was owned equally by all participating teams, teams equally funded it to the tune of €1m each (most of which was refunded following the final event), it was incorporated in Luxenburg, had a Board consisting of participating teams and an independent management structure.

With the 35th America’s Cup teams committing to an America’s Cup World Series in 2018, it seems the missing piece is the organisation to run it no matter who wins the Match. An organisation such as the WSTA would solve this issue and ensure momentum was maintained until the venue, boats and dates of the next America’s Cup are announced.

Manchester City's global strategy is the right idea (see link below), it's just the execution is flawed.... well, unless you have bottomless pockets!

Reinvestment in the player roster is key to continued success and without injections of capital, requires club's turning a profit (at least over the medium term). To achieve year on year profits, clubs must focus on:

• increasing revenues;...
  
• increasing stadium utilisation; and
• decreasing wages as a percentage of revenue.
  

Manchester City's global strategy specifically addresses two of these: it allows them to grow their fan base which leads to increased revenues, and it provides an opportunity to reduce wage and transfer costs (any FFP issues aside).

The problem for other clubs wishing to follow Manchester City's model is the £1B they have spent since the new owners took control in 2008, including 5 consecutive years of very large financial losses. Most other clubs simply do not have the financial resources to spend at that level.

The answer for clubs wanting to gain the financial benefits of a global model are to focus on the quantitative drivers noted earlier and to add qualitative drivers such as team culture, youth feeder systems, game day entertainment and deeper relationships with fans. The intersection of these quantitative and qualitative drivers provides the roadmap to success.

http://www.telegraph.co.uk/finance/newsbysector/industry/11065644/Manchester-City-FC-have-plans-for-global-brand-domination.html

The Super XV is a rugby competition comprising 15 franchises based in New Zealand, Australia and South Africa. In 2006, the average New Zealand Super XV crowd was 22,000. By 2012, that had dropped to 16,000. Roll forward to the 2014 season, New Zealand teams occupied 7th, 9th, 10th, second last and last place on home crowds stats.

The ITM Cup is New Zealand’s national competition. It comprises 15 teams, is a “feeder” league to Super XV teams and widely acknowledged as a maj...or reason the All Blacks have been dominant for decades. Regarding crowds, they have been in decline since 2008 to the point that now average game-day revenues are less than game-day costs – e.g. Auckland city (population 400,000) averaged 4,500 spectators per home game in 2013!

Tana Umaga (All Black legend, coach of ITM team Counties Manukau http://en.wikipedia.org/wiki/Tana_Umaga ) said on Radio Sport today that we need to get families back into watching rugby. I think he’s right but that means addressing issues like when the games are played, ticket prices, ease to and from the ground, stadium amenities and stadium entertainment.

It’s not simple but it’s imperative given that the current model is broken!