In the week leading up to the Rugby World Cup final, World Rugby announced the launch of a new global men’s 15-a-side competition involving tier one and some tier two nations.

The new biennial tournament will begin in 2026 and comprise a top division of 12 teams – six from the Six Nations, four from the Rugby Championship, and two more participants, highly likely to be Japan and Fiji.

The competition will be jointly owned by the SANZAAR and Six Nations Rugby governing bodies. Both rugby union properties are part of groups of very ambitious stakeholders committed to developing a competition that would create greater storylines around the July and November international windows.

The announcement of the competition was met with excitement from many rugby fans and commentators. However, critics of the new competition have stated that it will hamper the further development of much-improved tier two nations such as Georgia, Portugal, and Uruguay.

World Rugby has decided that many tier two teams will battle it out in a separate new competition, which will have promotion and relegation to potentially allow access into the elite competition.

However, it seems this will not come into effect until 2030, meaning that in the 2027 Rugby World Cup, we are unlikely to see the gap closing in competitiveness between tier one and tier two nations.

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World Rugby potentially ring-fencing this new elite competition may prevent tier two nations from playing highly competitive matches against tier one opponents which will prevent them from properly preparing for the tests they will have at future Rugby World Cups.

This would go against plans that World Rugby had to see the number of potential tier two upsets increase by 2031 at the USA Rugby World Cup.

One of the main reasons for the development of this new competition, known to many as the new rugby ‘World League’, is the commercial potential of the tournament.

It aims to capture the attention of new fans which will help to continue to grow the game globally. Commercially, this should help to create some long-term stability for World Rugby and the many rugby federations looking to increase their yearly revenues.

The commercial footprints of the Six Nations and The Rugby Championship are very different. According to GlobalData figures, the Six Nations, the northern hemisphere-based tournament, generated roughly $17.37 million from commercial partnerships in 2023, which included deals with Sage, Sportable, ByteDance, Breitling, and the competition’s long-standing title sponsor Guinness.

Guinness’ deal allows the brand to be the official title sponsor and beer partner for the competition over a six-year period. The two parties have a long-standing commercial relationship that first started in 2010. Since then, Guinness has become highly associated with the sport of rugby union thanks to various deals with major rugby clubs and leagues.

The Rugby Championship operates in a different commercial style, with the competition having no direct commercial partners. The four nations competing in The Rugby Championship – New Zealand, South Africa, Australia, and Argentina – are all obliged to showcase their own commercial partners on matchday.

For example, New Zealand’s global partner Taisho is serving as the title sponsor of The Rugby Championship in that country as part of its agreement with the All Blacks. The pharmaceutical company has a six-year deal with New Zealand Rugby worth a total of $27 million, according to GlobalData.

The recent World Cup champions South Africa have a one-year deal ongoing with Castle Lager to allow the beverage company to serve as the Springboks title sponsor for Rugby Championship matches. The deal is worth an estimated $3.38 million, which allows the brand to continue its commercial relationship with the Springboks which first began in 1997.

With the leading rugby nations coming together to participate in an exciting new competition, many brands will be intrigued by the commercial potential of this latest sporting league. They will be weighing up the prospect of potentially partnering with the competition.

It is likely that a western-based brand with a global client base may be interested in the title sponsorship rights for the event to secure vast exposure for their brand to hundreds of millions of rugby fans. A title sponsorship deal for the new competition could fetch over $10 million annually.

Rugby nations will want assurances that the league has plans in place to secure various highly lucrative deals, with the money being trickled down into the pockets of many rugby federations to provide much-needed support after years of financial struggles.

Rugby clubs and federations were substantially hit by the commercial effects of the Covid-19 pandemic and remain in bleak financial situations.

This is highlighted by the devastating statistic that all 13 English Premiership Rugby clubs that started the 2022-23 campaign made a loss last year and sadly, three teams – Worcester, Wasps, and London Irish – have all been expelled from the league for being unable to provide the Rugby Football Union with “financial assurances.”

It is estimated that over 800 million people follow rugby across the globe and new markets are developing in Asia and North America, thanks to the success of the 2019 Rugby World Cup in Tokyo and the US hosting the future men’s and women’s World Cups in 2031 and 2033, as well as the development of Major League Rugby (MLR), a privately owned North American competition, which is growing in popularity in the US.

It was reported in March that MLR was looking for a $100 million investment which would be crucial in allowing the league to further establish itself in the lead-up to the men’s and women’s 2031 and 2033 Rugby World Cups on home soil.

An option that World Rugby may look at to further grow the game and create new financial opportunities is to schedule some games in the newly formed competition to take place in the US.

This model of playing international-style matches has been groundbreaking for the NFL with matches played in the UK and Germany being hugely successful both economically and socially.

The prospect of the competition being able to host a prestigious fixture such as New Zealand vs. South Africa in a sports market as big as New York could be pivotal in allowing engagement to increase in the wider American marketplace that could provide substantial benefits to rugby.

There is no doubt that rugby union is at a crossroads and that clubs and leagues are looking to adapt by creating new commercial opportunities.

This is certainly a radical step by World Rugby and proves the governing body is willing to make big changes and take risks to try to grow the game and potentially create new revenue streams that could be critical in the long-term funding of the sport.

That income could be invested in grassroots rugby and the further development of tier two rugby nations, a long-sighted approach to be greatly welcomed.

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