English "hearts were broken," but for the majority of the companies that have spent millions on the Rugby World Cup, "the exit of the hosts is regrettable but not calamitous," according to Malcolm Moore of the FINANCIAL TIMES. The excitement of "the rugby on offer so far, coupled with the tournament's greater than expected global reach, has satisfied global brands such as DHL, Emirates, MasterCard, Société Générale and Heineken," all top-line sponsors that are paying an average of $12M each a year. The tournament's governing body said, "While we naturally feel for the England fans at their team's early exit, there is no material adverse impact on World Rugby's operations." A spokesperson pointed out that "97 percent of the tickets had been sold and attendance records had been set in matches not involving England." Online merchandising sales were "twice what they were at the last World Cup" -- and there have been record TV audiences in France and Japan, "where 20 million people tuned in for the match against Scotland." The "biggest impact will be on ITV," which paid £60M ($91M) for the broadcasting rights for the 2011 and 2015 World Cups, "twice as much as it paid for the preceding two tournaments." MediaCom Head of Investment Phil Hall said that the broadcaster could lose between £1M ($1.5M) and £2M ($3M) per match "as the price of advertising slots falls." ITV had a peak of 11.6 million viewers for England's match against Wales, "a 49 percent market share." ITV declined to comment on advertising revenues, but said that "there had been significant audiences for non-England games." One person close to the company also suggested that "much of the tournament had been pre-booked with advertisers, limiting the financial impact of England's departure" (FT, 10/4).
DOOMSDAY SCENARIO: In London, Harris & Peters reported ITV execs, brewery owners and stockbrokers "watched England through their fingers on Saturday night, fearful that defeat by Australia could cost them millions of pounds." Tournament organizers have insisted the damage from such an eventuality "would be minimal" but quantifying the "financial pain" of the host being eliminated from its own World Cup "has become a fraught business since England's loss last week to Wales." ITV sources said that all advertising for the knockout stages has been pre-sold, but "if viewing figures plummet," advertisers could be refunded up to £1M for each match England does not play after the pool stage. Pubs and clubs could collectvely be down by £5M ($7.6M) a match, and according to one academic, "even share prices are threatened, with a multi-billion-pound hit." One ITV insider said that "England's exit, whenever it came, could downgrade interest in the tournament to 'Six Nations levels, with only core rugby supporters watching.'" London Business School Professor Alex Edmans predicts "losses of billions, from share prices." Edmans "oversaw a long-term study that examined the effect of defeats for 39 national teams in major sporting tournaments over a number of years." It found "investor mood is severely dented," or that "stock markets take a battering as the national mood dips" (DAILY MAIL, 10/3).
