You are here
2018 marks the third full year of business for Rugby International Marketing, the for-profit subsidiary of USA Rugby. RIM was concocted in 2015 by USA Rugby’s board of directors to, “jumpstart the commercial activities of USA Rugby and exploit the market opportunity through an infusion of third-party capital and strategic investor partners in an entrepreneurial environment,” explained USA Rugby and RIM board member Chad Keck.
While about $7 million in outside investment got RIM off the ground, USA Rugby’s contribution was three major revenue streams – events, licensing and sponsorship. They were signed over to RIM via a 15-year licensing agreement. The first four years would see USA Rugby paid an average annual licensing fee of about $1.3 million.
The outside investment came from four entities - $2 million from the Rugby Football Union, English rugby’s governing body, $2 million from Chime Sports Marketing, $2 million from the Harlequins RFC (half to RIM and half directly to The Rugby Channel) and about $1 million from five individuals and families. After those investments, USA Rugby owns 75-percent of RIM and 92-percent of The Rugby Channel.
I was able to sit down with RIM CEO David Sternberg, who had the interim tag removed from his job title in February of last year, and Keck at USA Rugby’s National Development Summit in Denver, and over the course of the next several days will publish a series of stories on the status of RIM’s major revenue streams – sponsorship, events and The Rugby Channel.
Two wins were very recently announced – the signing on of UL (Underwriters Laboratories) and the United States Marine Corps as new sponsors. UL comes on as a presenting sponsor, the same level as AIG, Emirates and Adidas. The Marine Corps came in at the signature level, just below UL. Then there’s a third tier of sponsorship for suppliers, which include Gilbert, Gatorade and Thorn.
CSM, one of RIM’s shareholders which specializes in corporate sponsorship, was helpful in inking the deal with the Marines.
“CSM, our partners in the sponsorship effort, got a meeting with the head of recruitment, the General, and his marketing team to talk about this property and the opportunity,” said Sternberg.
“It was really driven by the creative the Marine Corps had put out showing a female member of the Corps in combat and then also playing rugby. It got fairly wide play in sports programming during the second and third quarter of last year. So that was kind of the genesis of it.
“‘Hey, here’s a direct linkage they’re playing up, we need to talk to these folks.’ We’ve always been cognizant of the close linkage between the armed services and the sport of rugby, historically in England as well as here in the US, and that really was the beginning of the conversation.”
The Marines will be looking to get involved with the sport at the grassroots level, too, potentially working with state rugby organizations, individual clubs and other entities to get their recruiting message out into the community, a la the National Guard sponsorship from earlier this decade.
The Guard had a deal with USA Rugby which saw hordes of college teams outfitted with new jerseys, goal post pads and other basic equipment for free. The Guard would be the title sponsor of national championships and underwrite the broadcasting of a college game of the week on ESPNU. However, the sponsorship ended with little explanation. Sternberg said he did his homework on that failed partnership so as to prevent repeating history with the Marines.
“I think one of the lessons was that there needed to be more sort of market-by-market activation, and we needed to create more opportunities for the Guard to get in front of participants and fans,” he said.
“They also had an internal reallocation of budgets, which we didn’t have much control over from the sounds of it, but it struck me when I came in a year-and-a-half ago, armed services recruitment was one that again, because of the ties between rugby and the military, was a logical category to be filled.”
The National Guard also saw its various offices around the country work separate sponsorships with clubs. Goal post pads from the USA Rugby deal can still be seen on pitches across the country.
From inception, RIM was put behind the eight ball in the sponsorship realm, with several deals timing out in 2015 and the bankruptcy of BLK, USA Rugby’s kit sponsor through the last World Cup and Rio Olympics. The latter left USA Rugby’s coffers low and RIM scrambling to find a replacement. A shorter-than-usual deal was struck with Adidas, and the partnership hasn’t been altogether smooth.
National teams were forced to wear off-the-rack apparel early on, sizes weren’t always right, and orders didn’t always arrive on time. One of the more glaring examples was the men’s 7s team opting to use BLK shorts with their Adidas tops on the HSBC Sevens Series last season. Some of the frustration fell on Adidas, and some on internal USA Rugby logistics issues. But Team USA’s various sides are now all generally wearing bespoke kits and, overall, Sternberg seems pleased with the sponsorship, as negotiations to extend loom on the horizon.
“We’ve had some issues just because of the short time frame that we had to launch the partnership last year with BLK’s bankruptcy,” he said.
“We were up against a very compressed timeframe for design production and delivery of our new kit, so we had some hiccups around that, but long-run I think they are proving to be a really good partner.
“They’ve got tremendous marketing presence and brand awareness, needless to say, and we are getting closer now than we might have been a year ago to their core rugby management team in Germany and in Europe to ensure that going forward our players will get the best possible product and benefit from every innovation that they’re making.”
The hunt for meaningful, big-dollar sponsorships has been helped by RIM’s event business. UL came on board not just as a sponsor of USA Rugby’s national teams, but also the 7s World Cup. AIG was lured in via the All Blacks’ two matches at Soldier Field, the latter of which was a RIM production.
On the aggregate, RIM seems to be ascending in the sponsorship silo, one in which USA Rugby floundered for some time. Sternberg says sponsorships are up 30-percent from 2016 to 2017, and more are expected to be announced in the lead-up to the 7s World Cup.