New Zealand expect World Cup loss

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New Zealand's World Cup boss Martin Snedden is still budgeting for a NZ dollar 30 million (£12.6m) loss on the 2011 tournament in New Zealand.

But the chief executive of Rugby New Zealand 2011 Limited (RNZ 2011), the joint venture between the New Zealand Rugby Union and New Zealand Government organising rugby's showpiece event, admitted the final figure could be even greater given the global financial downturn and the fact their sole revenue stream is from the sale of tickets.

RNZ 2011 has a revenue target of NZD 280million (£118m), almost nine times greater than the amount generated from the 2005 British and Irish Lions tour.

"We're taking a bit of a step into the unknown. If you think about the Lions tour at NZD 32million (£13.5m) being the highest grossing event in New Zealand and we're trying to do NZD 280million (£118m), that's a huge difference," said Snedden at a ceremony in Hamilton to mark two years out from the kick-off of the opening match between New Zealand and Tonga in Auckland.

"There has to be a degree of uncertainty into what will happen in that area. We hope that we've got the best balance we can get in terms of ticket pricing and the way in which it will be distributed.

"But in the end it won't be until we're live that we're really going to know the answer to that. The budget still stands around NZD 30million (£12.6million) but undoubtedly it's under a wee bit of pressure."

Snedden concedes the price of tickets, which will be announced in November, will shock many Kiwi fans, but he argued they were reflective of prices at the 2007 World Cup in France.

The average price for quarter-finals then was NZD 350 (£147), semi-finals NZD 600 (£252) and the final NZD 800 (£337).

"They are pretty significant prices and people will have to take a bit of a deep breath and work out whether they can afford it," he said.

"But they are the sort of prices that were being charged in France in 2007 and not much different to Australia in 2003.

"It's a wee bit of a different market place. But having said that, at the time of those matches is the time when we will have most of our international visitors so they won't be too fazed by that sort of pricing."

Snedden estimates 1.2millon of the 1.7million tickets available over the 48 matches will end up in the hands of New Zealanders.

With the sale of tickets making up the total revenue for RNZ 2011, the International Rugby Board, through Rugby World Cup Limited, generate the bulk of the remainder of their revenue from sponsorship deals and the sale of broadcast rights.

Broadcasting deals are in place in New Zealand, South Africa, France, Italy, Ireland, South America and Japan.

But IRB and RWC Limited chief executive Mike Miller said a deal with the major British market had yet to be finalised.

"The UK deal is obviously a big one and how that goes will be crucial to the amount of money we have to invest in the game over the next four-year period," he told Press Association Sport.

"We're investing NZD 100m (£42million) over the next four years in 116 unions. Everything we make goes back into the unions so my job is to get as much money as we can so we can invest in the game."

Given the size of New Zealand, Miller admitted it was unlikely the country would host another Rugby World Cup on its own in the future.

"In a country which has an economy market that is based on a market of four million people, it's difficult," he said.

"This is now the third largest sporting event in the world. I think it will certainly be a long time before something like the Rugby World Cup comes to New Zealand (again). I don't know, but I think it may be difficult."

But he added: "We don't make decisions solely based on finance. We knew because the stadiums are smaller for instance, and because it's not in the best possible time zone for European television where we make our most money on our television deals, that we'd make a bit less money here than we did in France.

"But money isn't the be all and end all. This is a rugby-mad country. It deserves to have a World Cup. It will be a great World Cup. It will be a great showcase for the game and that's as important as the money we bring in."