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USA Rugby is on the verge of rolling out a for-profit subsidiary called Rugby International Marketing. It will be owned by the non-profit national governing body, and USA Rugby CEO Nigel Melville will be at the helm.
“It’s just a way of increasing our opportunities here commercially. We’ve got some opportunities ahead of us that we felt were very exciting, and in order to deliver those we’re going to need some investment. Also, we need to protect the non-profit status of USA Rugby,” Melville told Rugby Today.
“There are some projects we wanted to get involved in we think are very special and will have huge impact on the game here, and so we needed to bring in some investment, we need strategic partners, and we looked at some different models of what could work, and one of those was to set up a for-profit company. To set up a for-profit company would enable us to maintain control of our assets, but also to bring in outward investment to help fund some of these projects.”
Chief among the projects are bringing the 2018 Sevens Rugby World Cup to the United States and a potential professional league or two. It’s common for private companies to work in concert with a national governing body to host an actual World Cup, to prevent the NGB from financial loss or liability.
“If you look at things like England 2015, it’s a company, it’s not the Rugby Football Union that are running it,” said Melville. “They use separate companies to protect the main business.”
On the professionalization front, USA Rugby is no stranger to fielding phone calls from people with grand ideas and plans. One, William Tatham, Jr., has paid for the rights to sanctioned professional 7s a couple of times, yet nothing has come from it. But there are more irons in the fire, including a possible collaboration with those involved in the European game.
“There are some investors who are, we’ll call them rugby investors, who are interested in helping us set up a pro league here in the US,” said Melville, who hobnobbed with Premiership investors in Chicago around the All Blacks game last month.
“They’re guys who have experience in setting up a professional rugby competition, but don’t have the expertise of understanding American sports. So it’s pairing people who do have domestic interest, but don’t have the rugby piece.”
As the CEO of a non-profit with a multi-million dollar budget, Melville already has a pretty demanding job. Heading up a brand new for-profit wing could as well be a bit onerous, couldn’t it?
“One thing the inward investment brings is the opportunity to employ more staff on the commercial side,” said Melville.
“That’s one of the goals of Rugby International Marketing will be to have an increased number of event and commercial staff working specifically on the projects they’re working on, which is two-fold. It reduces USA Rugby’s cost, so enables us to put more money into specifically development and National Teams, but it also gives us an opportunity to expand the number of people working on commercial issues as well.”
The success of Rugby International Marketing will only be discovered over time, but on the face of it, it would seem creating an investment vehicle, other than a purely charitable donation, for rugby people like Dallas Mavericks owner Mark Cuban and D.C. United and San Francisco Giants owner Will Chang, who also serves on the USA Rugby Board of Directors, is a worthy concept.