· All Blacks brand valued at US$169 million (NZ$251 million)
· Up from US$132 million (NZ$197 million) just prior to the tournament
· Conservative approach to sponsorship holding back growth
· Could reach US$500 within a decade
The All Blacks’ commanding win in the Rugby World Cup has cemented their position as Rugby’s pre-eminent brand. Immediately prior to the tournament, specialist brand valuation and strategy consultancy Brand Finance estimated the All Blacks brand to be worth US$132 million (NZ$197m) A third world cup victory (the first on foreign soil) has added a further US$36m (NZ$54m).
The Rugby World Cup is the third most watched sporting occasion, the 7s version of the game will feature in next year’s Olympics and rugby is the world’s fastest growing team sport. Add to that the sport’s more than averagely affluent fan base and you have an exciting commercial prospect for sponsors and broadcasters alike. The All Blacks have established a string of commercial deals with companies as diverse as Air New Zealand, AIG and Bulgari, a lucrative TV rights deal and unrivalled merchandising opportunities.
Bryn Anderson, head of Brand Finance’s Sports Marketing unit comments, “New Zealand are world champions and enjoy a historic win rate of 77%, the closest thing to guaranteed success a sponsor of a major sport could hope for. The All Blacks are a sponsor’s dream off the field too, renowned for their fairness, good-sportsmanship and disciplined behaviour.”
“The popularity of Rugby is growing rapidly, particularly in the US. The All Blacks’ one off game against the US Eagles in 2014 was a considerable success, attracting over 60,000 spectators. The game was broadcast on NBC to a huge audience, one that is even more affluent than in the rest of the world. 88% of registered US players are college educated and 69% work in professional roles. Existing sponsors AIG, Adidas and Air New Zealand would doubtless be more than happy to help facilitate the All Blacks’ forays into the world’s most lucrative market.
However the All Blacks may fail to fully capitalise financially on their World Cup victory. Anderson continues “Adidas extended its deal to 2019 while the fees for broadcast and content rights have been agreed with Sky TV until 2020, meaning two key commercial deals cannot be renegotiated for over three years. In addition,New Zealand Rugby have in the past taken a conservative approach to establishing new deals, cautious of the sense of ownership that many Kiwis feel for their national team.”
“The All Blacks and New Zealand Rugby must seize the opportunity to maximise the commercial opportunities that their brand presents. If managed properly to ensure brand fit, there is no reason they couldn’t establish dozens of global, top-tier partnerships in the same way that football clubs such as Manchester United have done. A willingness to expand and segment commercial partnerships will be important. So too will be increasing the visibility of the team outside of major tournaments by staging exhibition games, particularly in the US, or even locating competitive games in key growth regions, just as the NFL now does in the UK. Brand Finance’s analysis suggests that the All Blacks could command a US$500 million brand by the 2023 world cup.”
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.