Waking the Giant

Sustainable Commerce for American Rugby.

99.9% of all sports organizations on planet earth are not-for-profit. Every single one of them has a universal problem: Fundraising. In asking how to resolve this universal problem and achieve the holy grail of self-sustaining sports we really need to ask one question: How do you eat an elephant?

The answer, of course, is one bite at a time.?

In the United States, the youth sports industry alone is worth more than 15 billion dollars a year. How is it possible to spend all of that money, yet all the organizations that facilitate participation have no funds??

The answer to this potentially complex question is quite simple; We have been doing it wrong. In order to eat an elephant one bite at a time, you must butcher it correctly - tenderloin here, chuck over there, waste in the bin.

There are six revenue streams available to all sports organizations ranging from the International Olympic Committee, Little League Baseball, the National Football League or your local rugby club.?

That same 99.9% of all American sports organizations do not own their own facilities. This revenue dump is a product of our failure to adequately capture one or more of those revenue streams and reinvest in our own infrastructure.?

My thesis is as follows: Capture any one of the three low-cost-to-entry markets for a revenue stream and do business as normal. Whilst operating like any other business, divert a portion of said revenue into infrastructure that will provide growth and sustainability.?

In continuing normal operations; that of simply facilitating sports participation, we automatically manufacture demand for product(s) via the existing demand for participation.?

In recognizing the participation demand-->product demand continuum, we have understood the basis of all sports commerce: Our product (participation via membership) both advertises and consumes the products that can support our basic infrastructure needs if we were to profit from their sale collectively.

To play Golf, you need Golf Clubs. To Participate, you need Products.

The six revenue streams:

• Membership Dues*
• Kit/Equipment/Merchandise/Apparel (KEMA)*
• Sponsorship/Advertising (including endorsements and TV funds)
• Gate Receipts (Tickets and Parking)
• Concessions (Food And Beverage, including alcohol)*
• Events (including games, socials, and fundraisers as well as private hires)

*Denotes low-cost-to-entry revenue streams

I have demonstrated the ability to capture a revenue stream in a low-cost-to-entry market whilst doing normal business. I have also demonstrated the pitfalls of becoming overly reliant on a single revenue stream whilst lacking a critical mass of fans aka customers. Further, I have demonstrated the ability to manufacture demand for a product via the demand for participation and capture revenue from its sale.

Any attempt at growth requires first that we understand capacity; second, that we understand sports commerce. On the one hand, our job is made simple by virtue of the fact demand already exists. On the other hand, it is made arduous by the sheer volume of machinery required to supply that demand, let alone move all of that machinery into a position from which we can profit.?

Adding infrastructure to the membership increases our value composition beyond simple participation. We must provide basic human necessities for our members such as bathrooms and running water. A safe space to change clothes that isn’t a car in a parking lot.

It is possible for all clubs to access these revenues for themselves, it is possible to do so in partnership with local rivals and anyone above or below on the Talent Pathway. It is possible to do so in partnership with Regional and National Unions as well as Professional Leagues. First, we all have to agree on the objective.?

In order to achieve sustainability in sports, we must form what I call a Sports Totality:

“A sports totality exists when the members, sports participants, having captured all six available revenue streams, become owners of the supply chain via, and in partnership with, the sports membership organizations to which they belong, as well as the regional, national, and international governing bodies to which their sport belongs; including any professional/commercial representation of the given sport via, for example, Major Leagues; have increased revenue collectively while bargaining to lower cost, and re-distributed the margin of profit amongst themselves.”?

The sleeping giant to which the global rugby community refers, in regards to American rugby, is not, in fact, America’s ability to produce world-class athletes. Everyone else is, after all, already producing world-class athletes. This sleeping giant moniker of American rugby refers entirely to the Almighty US Dollar.?

Until now the single biggest impediment to awakening this supposed giant has been determined to be money, or the lack thereof. Our diagnosis of the root cause is logistics.?

There are too few people, playing too little rugby, too far apart. The solution then is more people, playing more (and better) rugby, closer together.?

For context, there are 12.5 million soccer players in the U.S. that equates to 1 player per 3 square miles. By contrast, rugby equates to 1 rugby player per 31 square miles. In order to get more people playing more rugby closer together, we must develop infrastructure to facilitate participation growth and provide sustainability.?

In terms of a systematic, sustained approach to participation growth, any programs initiated must serve as the catalyst for sales of products and services due to the participation demand-product demand continuum. Initiating programs is expensive and therefore profiting from the sale of the products consumed by way of participation is simply a logical way to recoup that initial investment. If not fully, then at least in part - which is more than we are currently doing. Sponsorships, properly structured, may also subsidize cost and supplement revenues when delivering such programs.?

Programs must also consider and fund the training and development of Coaches, Referees and Administrators to better support them in their roles and maximize member acquisition and retention. A Rugby Club Member today is not only a potential future Eagle, but also Tomorrow’s Fan.?

Whilst we have created participation and have certified a pool of administrators, coaches and referees to maintain it as part of the process, we must also have the infrastructure to support large scale participation demand. Playing Fields and Clubhouses.

Fortunately, Playing Fields and Clubhouses provide access to additional, potentially more valuable revenues.

At approximately 120,000 members at its peak, USA rugby’s membership dues and inevitable consumed-product-value is a market worth hundreds of millions of dollars per year.?

Regardless of where membership stands right now, or the ability of USA Rugby to provide for those members; multiple and diverse revenue streams are required to build and maintain infrastructure which provides for additional revenue opportunities in the short, medium and long term.?

Building the grassroots, funding education and infrastructure and profiting from the sale of products and services to those within the ecosystem, by those that are a part of the ecosystem, is how to grow the game AND business of Rugby.?

Money that enters the ecosystem must be leveraged as many times as possible in as many ways as possible, to achieve multiple objectives on its way through the ecosystem before it leaves. Our current model simply extracts the grassroots dollars on the way to someone else’s pockets without providing much in transit, simply removing currency from the marketplace entirely.?