2011 World Cup preperations well underway

We sits down with New Zealand's 2011 Rugby World Cup chief executive Martin Snedden to find out how plans are progressing for the global showpiece in the Land of the Long White Cloud
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Q: How has this Rugby World Cup been structured and how closely have you studied previous tournaments?

MARTIN SNEDDEN: We're a joint venture between the government and New Zealand rugby. We have had a really good look at what happened in France in 2007 and have been trying to pick up information from other major events. You know some of them; the Rugby World Cup in Australia in 2003 and some other major events. We want to see how we can deliver this in our own country. So it's been a pretty interesting exercise.

Q: Are the scars from 2003 when your bid to be joint hosts with Australia went so horribly wrong, well and truly buried? Or are they more of a lesson to learn from?

MS: Actually, if anything, they have helped. I guess in 2003 we lost the rights because we made the mistake of calling the IRB's bluff and we lost.

That has been a pretty good reminder to everyone that nowadays if you want to win a major event you've got to comply with the rules. So I guess we understood that right from the start. We had run into road blocks along the way with people. It's certainly not an empty threat to say that we're in danger here if we can't run by the rules that we've agreed to with the IRB, so from that point of view it's been really useful.

Q: What about the stadiums, will they be ready? And what is happening at Auckland with the redevelopment of Eden Park which has been beset by problems involving planning approval?

MS: The beauty of Eden Park is that I think all of the controversy that happened around it forced everyone to focus on it properly, and the result of that is that the upgrade that is taking place is a hell of a lot better than the design that was put on the plate at the time the bid was successful.

So again, a bit of a silver lining in lots of ways. It's also forced us to collectively address some of the issues that exist around having Eden Park in a suburban area, like some of the exits that were obstructive before. So there's a lot of work done on pedestrian and traffic management that should make it a much more accessible venue around the World Cup.

Q: Hasn't it been a tough job thinking about rebuilding and spending a lot of money in the midst of a deepening world recession?

MS: It has been a challenge, but it's not a problem in terms of Eden Park. Eden Park is probably our only major infrastructural issue, although there is a fairly significant stand being built at the AMI stadium in Christchurch, but that is a project that was already well underway. And it will be finished a couple of years before the World Cup.

Why it has been more relevant as the world has moved towards a recession is that it puts a potential strain on things like travel costs which we will be responsible for. But we're building that into our financial planning. Possibly of more relevance is the idea that if the recession carries on for a long time, the affordability of people coming from other parts of the world to New Zealand becomes a greater challenge for them, and obviously we are reliant, as most major events are, on overseas visitors coming in and bolstering the local market.

Q: How dependent on that?

MS: Well, we're expecting about 60,000 or 70,000 visitors. Just to put that in some sort of context, France had about 400,000 but a lot of that reflected France - it's in the middle of Europe and is near the UK. And that's probably some double counting with people coming in and out of the countries like England. Our figures are based more on comparison with what happened in Sydney in 2000 with the Olympics, and 2003 with the Rugby World Cup, and just our own understanding from the Lions tour of 2005.

We're pretty confident with that number. About half of those will come probably in the last two weeks, so hopefully for the quarter-finals but definitely for the semis and the final.

Are we dependent on them? Yes; one of the reasons that we are hosting the tournament is that it attracts overseas visitors, so we want them to come.

Q: Will New Zealand be able to handle the accommodation needs of all the visitors? This isn't a huge country is it?

MS: We targeted right from the start that the existing resources for accommodation in New Zealand were going to be stretched for the second half of the tournament. It won't be a problem in the first half because teams are spread right around the country.

But the second half is the key when the concentration of the tournament will be in two or three major cities and especially Auckland, which is hosting both semi-finals and the final.

So we've established something called an accommodation bank. We've been working with the hotels and the streets throughout New Zealand, attaining a commitment from them to provide to us a fairly significant part of their room capacity, about 70 per cent of their room capacity for the World Cup period.

What that will enable us to do is to meet the demands of all of the official part of the tournament - the teams, the officials, and everyone involved on the commercial side of the tournament, plus sponsors, media, the variety of people that come to New Zealand on official tour packages through the overseas travel agents.

And I think through the use of the bank, we will be able to make sure that the resources are used properly. Below that there's pretty significant lower tier accommodation and the motels in New Zealand are at a pretty reasonable standard.

The bottom line here is, if we're going to get through this World Cup safely, it will be because we were able to form a partnership with the accommodation industry, and actually use the resources at our disposal in a structured way, rather than just leaving it down to the free market.

Q: That would be disastrous wouldn't it?

MS: Yes it would, and that won't happen. As I say we're just about there with the hotel and motel industries so I think it will probably work out well.

Q: What about transport infrastructure?

MS: It's going to be about working with the providers that we've got in New Zealand and it's going to take the careful use of all the resources we've got.

It's not something you can just leave unplanned. I think that's where countries like France were probably not as challenged because there's plenty of that infrastructure.

We've got to use ours well. For a small country like New Zealand, the Rugby World Cup is our biggest ever event and the ability to actually get the co-operation of those sort of industries is enhanced. But it is a challenge - an interesting one to have.

There will be pockets of investment, in Auckland particularly, with the electrification of the rail system likely and I think that will help considerably.

Q: What's the biggest challenge you face?

MS: Selling enough tickets. You know, the financial model we worked on is pretty challenging.

Q: You've got to give the IRB what the French gave, £48m?

MS: Yeah, we're contracted to £48 million pounds, that's about NZ$125 million (as at March, 2009).

Q: Is that intimidating?

MS: Well, on top of that we pay for all of the costs of the tournament.

Q: So what would that be roughly?

MS: Oh, about NZ$150 million New Zealand dollars. So the total cost is about NZ$310 million. Our only source of revenue is ticket sales, and that's a small market. So it will be challenging. And the maximum capacity of any of the grounds is about 60,000. The stadium in Wellington is about 39,000, and then the next level down is sort of 25,000 to 26,000.

Q: Is that enough?

MS: Well, it will have to be. We're (the NZRU) forecasting to make a NZ$7million dollar loss on this.

Q: Is that acceptable?

MS: Well it is in New Zealand, because the government has decided that hosting a Rugby World Cup in New Zealand is worth that sort of investment. The agreement that they have with New Zealand rugby is that they underwrite two thirds of New Zealand rugby. So the government is staring down the barrel, I suppose, of a NZ$20 million loss. I think for both of them (the Government and the NZRU), they take the view that it's worthwhile. If they do it well, then the investment is worthwhile.

Q: The London Olympics started off allegedly costing £4 billion but has now got closer to £12 billion. If that catapulted that way with you, with your figures, would that be cataclysmic for New Zealand?

MS: Uh, it would be interesting (laughs). I mean, obviously I do a lot of public speaking and I have a little section where I talk about the costs in London and how that has to be avoided here. We've done our homework, to start with. And the forecast that was done was pretty good.

The people involved with the French tournament have been great to us, and we had access before, during the tournament and subsequent to that, to the five or six top senior managers from the French organising committee. Also, the whole of the IRB senior management team has been down here, trawling through each aspect of the tournament. Our finance team went to France and were able to spend a week going through the financial side of it.

So what we have now, having reviewed the whole thing, is that we were pretty accurate. There are always swings and roundabouts, with the overall package but our forecasting was pretty good.

The idea that it's based on is achieving some pretty demanding ticketing revenue targets which are going to require us to sell out a fairly substantial part of the tournament.

Q: Is it a tough dividing line between selling out, but putting tickets at a realistic price?

MS: Yes, but I have been pretty clear in saying when we get to the stage of the semi-finals or the final, and to a lesser extent the quarter-finals, we are paying international prices, like the prices in France, and that's what the prices will be.

Q: And will the New Zealand public accept that?

MS: Yes, they will, as long as we find the balance in the pool matches. We have priced it during the pool phase at the sort of levels that people can afford so that it sort of balances out the fact that, at the knockout stages, it's an expensive exercise.

Q: What percentage mark in the ticket sales do you need to hit?

MS: France hit 95%, Australia had about 91%; if we can get to 90 we're okay. But realistically, we make our money off the big matches so we'd want to be selling out the quarters, semis, final and bronze. If we can do that, it's a significant part of what we have to achieve.

I think, particularly during the knockout phase, the number of visitors here who will be used to paying those sort of prices and are quite happy to do that, means the semis and the finals are not that much of an issue.

We're going to have to be very careful about the quarter-finals and get that right. The opening match is something I think the New Zealanders will be really interested in. That, hopefully, will give us a bit of breathing space with the other pool matches, particularly those not involving the All Blacks.

Q: Could the 2011 World Cup change New Zealand?

MS: I think it can have a significant impact on us.

Q: In what respect?

MS: I think we're a nation that over the last few years has started to feel our isolation more, and has started to realise we're a bit smaller than we thought. We have lost a bit of confidence in ourselves and have started to develop a bit of negativity at times as a default position.

But this is an opportunity to change that, to use this as a major international profile opportunity. But I actually think of it as an opportunity for New Zealanders to prove to ourselves we can really do something significant and do it really well and in a way that will be recognised both internationally and domestically. And through that, regain a bit of self confidence.

I've been very open about explaining this and I think it's something that has resonated with a lot of people. An interesting part of this is us getting knocked out in France. That was a bit of a shock to New Zealanders and tests your national character. But 2011 isn't just about the All Blacks.

The project that we've got is that it's one of the major international sporting events that happens in the world and we only have a Rugby World Cup once every blue moon. So let's enjoy the event for the fact that it's an event, not because it's a mechanism for the All Blacks to win the thing.

Q: Hasn't the Rugby World Cup become too big for this country?

MS: When I started out, I thought yes. But I think that if we can run this World Cup really well, it might send a signal that it is still worth having a mixture of small and large countries hosting major events.

If we don't do a good job, then I would have thought that our chances - and the chances of any other small country hosting in future - would be slim.

Q: How are you going to guarantee that the All Blacks win it?

MS: One challenge is to get people to understand that there are two separate things here. They'll look at me and wonder if I'm an idiot or not, and you have to explain it carefully to people, but they get part of the argument.

And as we get closer to the event I hope they get more of it. But we've been to a number of World Cups, like 2007, where we've thought the All Blacks were going to win it and they haven't.