Document

Economic Impact AssessmentRugby League in Englands Northwest

Final Report

5th March 2007

rugby4:tourism strategy 2column 8/5/07 15:34 Page 1

Economic Impact Assessment Rugby League in the North West

Contents Executive Summary................................................................................................................... 3 1. Introduction ......................................................................................................................... 5

1.1 The study requirements ...................................................................................... 5 1.2 Our approach...................................................................................................... 5 1.3 Report structure .................................................................................................. 6 1.4 Background to the EIA of Rugby League in the North West .............................. 6 1.5 Rugby League in the UK..................................................................................... 7 1.6 Rugby League in the North West........................................................................ 7

2. Economic Assessment of Rugby League in the North West ............................................ 16 2.1 Introduction ....................................................................................................... 16 2.2 Our approach to measuring economic impact.................................................. 16 2.3 Value of Rugby League to the North West economy ....................................... 17

3. Economic Impact of the Super League Grand Final ......................................................... 22 3.1 Introduction ....................................................................................................... 22 3.2 Overview of the Super League Grand Final ..................................................... 22 3.3 Our approach to measuring economic impact.................................................. 23 3.4 Outputs from the SLGF Economic Impact Assessment .................................. 24 3.5 Policy implications of the SLGF EIA findings.................................................... 30

4. Supply chain characteristics of a ‘typical’ professional club ............................................. 32 4.1 Introduction ....................................................................................................... 32 4.2 Case study club ................................................................................................ 32 4.3 Mapping the supply chain ................................................................................. 32 4.4 Supply chain analysis ....................................................................................... 33 4.5 Conclusions ...................................................................................................... 35

5. Future developments in Rugby League ............................................................................ 36 5.1 Introduction ....................................................................................................... 36 5.2 Context – Rugby League’s strategic development ........................................... 36 5.3 Key challenges for Rugby League in the North West....................................... 39 5.4 Growth potential for Rugby League clubs in the North West ........................... 42 5.5 Summary........................................................................................................... 46

Annex 1 – Detail Methodology for EIA of Rugby League in the North West ........................... 47 Annex 2 – Detail Methodology for EIA for SLGF 2006............................................................ 49 Annex 3 – Consultee List......................................................................................................... 53

Private & Confidential 2


Executive Summary Introduction This report, to the Northwest Regional Development Agency (NWDA) and the RFL (Rugby Football League) is the final stage of the Economic Impact Assessment of Rugby League in England’s North West. The project aimed to measure Rugby League’s economic value to the North West at a regional and local level and measure the impact of the Super League Grand Final (SLGF), held in Manchester in October 2006. Remit The project’s specific outputs included: • Quantifying the economic value of Rugby League to the regional economy; • Undertaking an Economic Impact Assessment (EIA) of the Rugby League

Grand Final held at Old Trafford on 14 October 2006; • Understanding the characteristics of the supply chain for a ‘typical’ professional

club; and • Assessing the future potential for economic growth of Rugby League. Approach The approach to deliver the above requirements was agreed between NWDA, RFL and Deloitte. This approach follows a tried and tested approach to consultation and data research combined with Deloitte’s methodology for calculating economic value, which is entirely consistent with the commonly used UK Sport Model for economic impact. The key phases of the approach are set out below: • Phase 1 – Data Collection to gather relevant information; • Phase 2 – Consultation with identified key stakeholders; • Phase 3 – Economic Modelling, utilising Deloitte’s input-output model; • Phase 4 – Economic Assessment to test the impact model; and • Phase 5 – Results and Reporting. Key findings and conclusions The detail of the key findings from the consultations and analysis can be found in sections 2 - 5. In summary the main findings and conclusions arising from this project are as follows:

• Rugby League in the North West is a growing sport, both in terms of revenue and participation at all levels;

• Rugby League is now commonly seen as one of the five major sports nationwide, allowing the RFL to continue to be a major influence on British sport as well as providing greater opportunities to secure additional funding;



• The traditional or ‘grass roots’ of the game are strong within the region and should be developed to improve participation and build on the professional platform;

• The value added by Rugby League to the North West Economy is in the region of £54m;

• Rugby League supports approximately 840 jobs across the region either directly or within the supply chain;

• The Super League Grand Final, held at Old Trafford, is growing in popularity across a broad fan base, genders and age ranges;

• Retaining and developing the Grand Final as a major event will improve the image of the region and will add value to the regional economy if visiting fans can be persuaded to stay in the region;

• There are opportunities for clubs to collaborate with each other and with the RFL to improve their purchasing power and gain efficiencies within their supply chain;

• Stadium development and improved facilities remain high on the agenda of the RFL and Super League to increase the numbers of spectators and improve the image of the game as per the Warrington Wolves example; and

• The attraction of other major matches/competitions will add to the economy of the region.

The remainder of this report:

• Outlines the background to Rugby League both nationally and regionally;

• Provides an economic assessment of the value of Rugby League in the North West;

• Provides an economic assessment of the SLGF of 2006;

• Outlines the supply chain characteristics of a ‘typical’ professional club; and

• Provides a view of the future growth potential of Rugby League across the North West.

Acknowledgement In undertaking the assessment, we would like to acknowledge the time and commitment shown by the wide range of stakeholders, especially the four Super League clubs who contributed both time and evidence to provide an informed view to the process.



1. Introduction 1.1 The study requirements The NWDA in partnership with RFL wanted to explore how, through a more cohesive approach, Rugby League could make a stronger contribution to the future growth of the region’s economy. An early priority was to capture the value of Rugby League to the North West economy. The NWDA engaged Deloitte to undertake an independent economic assessment of the impact of Rugby League on the regional economy and the impact of the 2006 SLGF. The main focus of the study was to:

• Identify the overall economic value of Rugby League to the region’s economy and its potential growth;

• Estimate overall gross value added (GVA) contribution of Rugby League to the region’s economy (covering professional and semi-professional levels);

• Assess the future potential for economic growth of Rugby League in the North West based on national / international developments;

• Undertake an EIA of the Rugby League Grand Final held at Old Trafford on 14 October 2006; and

• Understand the characteristics of the supply chain for a ‘typical’ professional club.

The following sections detail the approach taken in addressing the above and the outputs of the study. 1.2 Our approach Figure 1.1 accompanied by the explanation, illustrates the five phased approach adopted by Deloitte to complete this study. Sections 2 and Annexes 1 and 2 provide further details of Deloitte’s input-output modeling methodologies used to measure the value of the game to the North West economy and the economic impact of the SLGF. Figure 1.1: Deloitte’s approach to this assignment

Phase 2 Consultation

Phase 2 Consultation

Phase 1 Data Collection/ collation

Phase 1 Data Collection/ collation

Phase 5 Results & Reporting

Phase 5 Results & Reporting

Secondary data collection / collation

Secondary data collection / collation

Agree assumptions

Agree assumptions

Phase 3 Economic Modelling

Phase 3 Economic Modelling

Phase 4 Economic Analysis

Phase 4 Economic Analysis

DCMS; Sport England; BSkyB;

NWDA; LAs & RFL.

MCC; MTB; Sponsors; Media

Outlets

Spectator primary research at Grand

Final

Super League Clubs; National League Reps

Sensitivity analysis

Sensitivity analysis

Qualitative assessment

Qualitative assessment

Economic impact of rugby league final draft report

Economic impact of Grand Final draft report

Final report

Final report

Objective 1:Identify the

economic value of rugby league

in the North West

Objective 1:Identify the

economic value of rugby league

in the North West

Objective 2:EIA into the Grand Final

being held at Old Trafford on

14/10/06

Objective 2:EIA into the Grand Final

being held at Old Trafford on

14/10/06

Interactive Workshop

Interactive Workshop

Inception meeting

Deloitte’s input-output model

Source: Deloitte, 2006 The approach undertaken followed 2 workstreams, with similar phases, to provide economic assessments of both Rugby League in the North West and of the SLGF.



Phase 1 – Data Collection – involved gathering relevant information including: key financial data from Super League clubs; additional funding details; employment and participation numbers; and any previous studies undertaken. Phase 2 – Consultation – undertaken with key stakeholders within the sport including the 4 local Super League clubs, the RFL and relevant local authorities. See Annex 3 for a full list of consultees. Phase 3 – Economic Modelling – utilising Deloitte’s input-output model which measures the local economy in terms of; who might be expected to buy what and from whom; what they would expect to pay; and what could leak outside the region. Phase 4 – Economic Assessment – to test the impact model and gather the ‘softer’ intangible benefits of Rugby League. Phase 5 – Results and Reporting – producing draft and final reports for the NWDA and RFL. 1.3 Report structure The remainder of this report is structured as follows: 2. Economic Impact of Rugby League in the North West: this section looks at

the findings of Deloitte’s economic assessment of Rugby League in the North West;

3. Economic Impact of the Super League Grand Final: an analysis of the direct

and indirect economic benefit to the region as a result of hosting the Grand Final;

4. Supply chain characteristics of a ‘typical’ professional club: outlining a

high level view and analysis of the Warrington Wolves Rugby League Club. 5. Future developments in Rugby League: examining the potential growth of

Rugby League focussing on the current and potential Super League clubs.

1.4 Background to the EIA of Rugby League in the North West Sport is increasingly being recognised as an important sector of the economy at national, regional and local levels. Sport related activity added around £1.8bn to the North West economy in 2003, corresponding to 1.8% of total value added in the region and c.58,000 people were employed in sport related employment in 2003, equal to 1.9% of total employment in the region1. The North West is therefore widely recognised as a major sporting region. It is not only home to leading professional clubs in sports such as Rugby League, Football and Rugby Union it also boasts globally recognised sporting equipment retailers and manufacturers such as JJB Sports and Adidas and a specialist rugby supplier in Kooga Rugby. In addition, the sport industry makes a significant contribution to the North West economy; employing around 50,000 people and generating over £3 billion in annual turnover, which accounts for c1.5% of the region’s economy.

1“Economic importance of sport: north west region, 2003” Sport England.



In particular, the North West has historic links with Rugby League’s birth and at every stage of its development since the formation of the Northern Rugby Football Union (NRFU) in 1895. The North West and Yorkshire have traditionally been viewed as the game’s heartlands with over 80% of clubs being based in the two regions. Currently, there are 4 North West teams in the sport’s top league, the engage Super League, with a further 10 semi-professional teams in the LHF Healthplan National Leagues and 119 amateur teams across the region. In total almost 90,000 people2 are involved in the sport across the region in a playing or coaching capacity. As part of their wider strategic commitment to sport, the NWDA is working with the RFL and other regional partners to explore how Rugby League can make a stronger contribution to the North West’s economy. This document presents Deloitte’s assessment of the value of Rugby League to the North West economy in terms of expenditure, GVA and jobs. It provides a snap shot – and benchmark - of the game’s contribution to the overall North West economy. In addition, this report also includes Deloitte’s EIA of the SLGF which was held at Old Trafford on 14 October 2006. This measured the additional impact of holding the SLGF on both the Greater Manchester area and the wider North West region. 1.5 Rugby League in the UK 1.5.1 Governance of the game The two key constituents of Rugby League in the UK are the Rugby Football League and Super League Europe Ltd. (i) RFL

The RFL is the governing body for the game of Rugby League in the UK. Since unifying with the British Amateur Rugby League Association (BARLA) in 2003, it has been responsible for all aspects of the game from promotion and marketing to coaching and national development programs.

The RFL governs the game at all levels and according to its constitution the objectives of the RFL are to foster, govern, develop, organise and manage the Game, in respect of all age groups, at all levels and for both sexes in Great Britain and Ireland.

(ii) Super League Europe Ltd

Super League Europe Ltd are the owners of Super League, the premier competition for the sport in Europe. Each Super League Club has an equal share in Super League Europe Ltd. Since it began in March 1996 Super League Europe has controlled the arrangement, management, promotion and administration of the Super League competition and all the intellectual property rights.

1.6 Rugby League in the North West

2 North West regional management board meeting Rugby League report Nov 2006



This section of the report provides further detail on the sport of Rugby League in the North West and outlines the scale and growth of the sport in the following 3 section areas: • Rugby League’s geographical footprint; • Super League attendances in the North West; and • International matches and the Grand Final. (i) Rugby League’s geographical footprint

The North West has strong historical links with Rugby League’s birth and every stage of its subsequent development. Of the 21 founder members of the NRFU, formed in 1895, nine were based in the North West; ten if Runcorn are included who later replaced Dewsbury.

Table 1.1, demonstrates that this strong Rugby League regional footprint continues today. For example, the North West currently hosts four of the twelve engage Super League clubs: Salford City Reds; St Helens RFC; Warrington Wolves and Wigan Warriors. Currently, St.Helens, Wigan Warriors and Warrington Wolves are arguably three of the biggest Rugby League clubs in Europe.

In addition the LHF Healthplan National League also has a significant North West focus with nine of the twenty two clubs in Leagues 1 and 2 located in the region.

Table 1.1: Rugby League clubs by location 2007. Engage SUPER LEAGUE North West Yorkshire Other 1 St.Helens 1 Bradford Bulls 1 Catalan Dragons 2 Salford City Reds 2 Huddersfield Giants 2 Harlequins RL 3 Warrington Wolves 3 Leeds Rhinos 4 Wigan Warriors 4 Hull FC

5 Hull Kingston Rovers

6 Wakefield Trinity LHF Healthplan National League One 5 Leigh Centurions 7 Batley Bulldogs 6 Rochdale Hornets 8 Doncaster Lakers 7 Whitehaven 9 Halifax RLFC 8 Widnes Vikings 10 Dewsbury Rams 11 Castleford Tigers 12 Sheffield Eagles

LHF Healthplan National League Two 9 Barrow Raiders 13 York City Knights 3 Celtic Crusaders

10 Blackpool Panthers 14 Featherstone Rovers

4

Gateshead Thunder

11 Swinton Lions 15 Hunslet Hawks 5 London Skolars 12 Workington Town 16 Keighley Cougars 13 Oldham

Source: RFL / Deloitte, 2006



In addition to the above professional and semi professional clubs the region boasts a further 119 amateur clubs, with almost 14,000 regular participants from the age of seven upwards. Aside from running professional teams, all 13 professional clubs in the region run community programmes aimed at the provision of activity to make a positive impact on the communities that surround them. The community programmes involve working in partnership with local authorities, schools, higher education Institutes and the private sector to promote healthy activity, Rugby League and education across the region. During 2006 a pilot programme involving 4 clubs from the region, namely Leigh, St Helens, Warrington and Wigan, was undertaken to measure the impact of their community programmes. In summary the four clubs worked with over 900 schools, held over 3,000 different sessions delivering to over 60,000 individuals. From 2007 all 13 clubs will be part of the programme and will be measuring their results. (ii) Super League Club Revenues and Positioning

In this section we provide a brief snapshot of Rugby League in the North West, to help identify the potential for future development.

Rugby League in the North West is a growing sport, as illustrated by figure 1.2. The total revenues of the 14 Rugby League clubs were estimated to be £21.2m in 2005, 16% above the figure in 2001. This represents a Compound Annual Growth Rate (CAGR) of 4%. In the past two years the pace of growth appears to have quickened, and in 2005 revenues grew by 9%.

Figure 1.2: Revenues of North West Rugby League clubs 2001 – 2005

5.8 5.64.0 4.8 4.9

3.7 4.1

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2.6 2.2

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Wigan Warriors St Helens Warrington Wolves Salford Reds Widnes Vikings Other clubs (estimate)

21.2

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18.118.2

Source: Club accounts, Deloitte analysis

£m

Source: Clubs accounts, Deloitte analysis, not all 2006 data available. The North West Rugby League landscape is dominated by the five largest clubs – Wigan, Warrington, St Helens, Salford and Widnes. These five clubs account for over 90% of total club revenues in the region. The other 9 clubs are estimated to generate collective turnover of £2.1m, slightly less than that of Widnes - the smallest of the ‘big five’ clubs.



Of the big five clubs, only Wigan has seen revenues fall in the five seasons analysed even though their average attendance has risen. Salford City Reds and Warrington Wolves have seen the largest growth, at 11% and 10% respectively. The key reason for these increases appear to be directly related to changes in attendances. Figure 1.3 shows this diversity in the size of Rugby League clubs in the North West, plotting clubs’ revenues, average league position and attendance to give an overall ‘picture’ of the sport in the region. This further illustrates the relative sizes of the five larger clubs compared to their smaller counterparts. Figure 1.3: Revenues, league position and attendance at North West Rugby League clubs

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05101520253035

Average League position, 2004 - 2006

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rage

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nue

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2006

St Helens

Wigan Warriors

Warrington Wolves

Salford Reds

Widnes

Leigh Centurions

Whitehaven

Rochdale

OldhamBarrow

Swinton Lions

WorkingtonBlackpool

Note: Size of bubble represents average league attendance, 2004-2006Source: Club accounts, Deloitte analysis

£m

The above diagram clearly shows how the five larger clubs are considerably greater in scale than the other clubs. Even within the ‘big 5’, Wigan’s average turnover is over twice that of Widnes’s, as is its attendance.

Strategically, it therefore seems unfeasible – at least in the short term – that any of the smaller clubs would have sufficient growth to join the larger clubs in the immediate future. The exception, of course, is the step change in income that would come with promotion from National League 1 to Super League status.

It appears that the main growth potential for clubs will remain with the existing larger clubs growing further. For the long term future of the game in the region and to maximise economic value the smaller clubs should be helped to grow and develop as much as possible, but the main economic growth in absolute terms would be more readily available from the larger teams.

We understand that the RFL has plans that after 2009 there will be no automatic promotion or relegation from Super League and new clubs will be admitted on a franchise basis. Given the primacy of the Super League compared with National Leagues it is clearly important that the leading North West clubs have as strong a case as possible for each securing a franchise.



(iii) Super League attendances in the North West; Attendance at Super League games since 2004 has increased for all four ever present super league clubs as can be seen in figure 1.4, in total this is a growth of 12%. The attendance figures for the 2005 season also hint at the future growth potential for the region as they reflect a season when the North West hosted a total of six Super League clubs including Leigh Centurions and Widnes Vikings.

Figure 1.5, below also demonstrates consistently strong attendances amongst the North West’s National League clubs over the past three years.

Figure 1.4: Super League clubs based in the North West, average attendance

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4,000

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LeighCenturions

Salford CityReds

St.Helens WarringtonWolves

WidnesVikings

Wigan

Super League clubs in the North West region

Avera

ge a

ttendance

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2005

2006

Source: RFL / Deloitte, 2006 Figure 1.5: National League clubs based in the North West, average attendance (2004-06)

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BarrowRaiders

BlackpoolPanthars

LeighCenturions

OldhamRLFC

RochdaleHornets

SwintonLions

WhitehavenRLFC

WidnesVikings

WorkingtonTown

National League clubs located in the North West

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RochdaleHornets

SwintonLions

WhitehavenRLFC

WidnesVikings

WorkingtonTown

National League clubs located in the North West

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tten

dan

ce

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Note: Widnes Vikings in Super League season 2004 and 2005



Blackpool Panthers formed in 2005 Source: RFL / Deloitte, 2006 (iv) Rugby League’s relative position compared to other sports in the North

West

Rugby League is increasingly being seen as one of the five major sports nationwide, along with football, cricket, rugby union and tennis. This marks a significant step forward for the sport and one which takes it to the ‘top table’ in terms of central government recognition.

This will help provide further opportunities to be a key influencer within British sport and the Government itself. For example, the RFL was included alongside the governing bodies of the other four major sports as a core sport that will access additional funding from the National Sports Foundation (£1.5m. per year in 2006/07 and 2007/08). Such opportunities provide the RFL with the capability to expand its Community Development Programme, which aims to facilitate greater grass roots participation by improving the quality of facilities, coaches and administrators.

It is also useful to outline how Rugby League compares with other professional sports in the region. Table 1.2 illustrates a comparative analysis of Rugby League clubs’ turnover compared to other sports in the North West.

Table 1.2: Revenue, profit and attendance in North West professional sports Revenue

(2004/05) (£m)

Operating Profit

(2004/05) (£m)

Average Attendance(2004/05)

Football – Premiership 497.0 79.7 40,127 Football - below Premiership 49.9 12.7 5,517 Rugby League total (2005) 21.9 0.0 4,506Cricket (2005) 9.4 0.6 4,720 Rugby Union 5,7 n/a 8,339

Source: Deloitte analysis Note: The figure for Rugby Union represents the estimated average figure for a Guinness Premiership club. An actual figure for Sale Sharks – the only fully professional club in the North West region – is not available. The club has filed abbreviated accounts since 2003, which do not disclose revenues. Table 1.2 illustrates the dominant financial position of professional football in the North West. In many of our consultations respondents noted the continuing challenge of football to Rugby League’s development. However, our analysis shows that Rugby League still has a strong position within the North West’s sporting landscape, and is clearly the number two professional sport in the region. One of the challenges for Rugby League will be to continue to promote itself effectively at supporter level and within each club’s local community to ensure that awareness and grass roots participation remain buoyant. (v) International matches and the Grand Final

In addition to the regular season activity within the sport, the North West hosts international matches and the Super League Grand Final which also have an economic impact within the region. Table 1.3 demonstrates the North West’s role in hosting a number of international matches in the last 3 years.



Table 1.3: North West hosted international matches, 2004-06 2006 World Club Challenge Match details Date Venue Attendance Bradford Bulls v West Tigers 3 February The Galpharm Stadium, Huddersfield 19,207 Federation Shield Tonga v Samoa 22 October Headingley Stadium, Leeds 5547 England v France 22 October Headingley Stadium, Leeds 5547 England v Tonga 29 October Twickenham Stoop Stadium, Middlesex 2388 England v Samoa 5 November Kingston Comm. Stadium, Hull 5698 Final 12 November Halton Stadium, Widnes 3390 International Cumbria v Tonga 25 October Derwent Park, Workington TBC 2005 Tri Nations Great Britain v New Zealand 29 October Loftus Road, London 15,568 Australia v Great Britain 5 November JJB Stadium, Wigan 25,004 Great Britain v New Zealand 12 November The Galpharm Stadium, Huddersfield 19,232 Australia v Great Britain 19 November Kingston Comm. Stadium, Hull 25,150 Final (Australia v N Zealand) 26 November Elland Road Stadium, Leeds 26,534 World Club Challenge Leeds v Canterbury Bulldogs 4 February Elland Road Stadium, Leeds 37,028 International Cumbria v Ireland 17 October Craven Park, Barrow 1,216 2004 Tri Nations New Zealand v Australia 23 October Loftus Road, London 16,750 Great Britain v Australia 30 October City of Manchester Stadium, 38,572 Great Britain v New Zealand 6 November The Galpharm Stadium, Huddersfield 20,372 Great Britain v Australia 13 November JJB Stadium, Wigan 25,004 Great Britain v New Zealand 20 November Kingston Comm. Stadium, Hull 23.377 Final (Gt. Britain v Australia) 27 November Elland Road Stadium, Leeds 39,120 World Club Challenge Bradford v Penrith Panthers 13 February The Galpharm Stadium, Huddersfield 17,201 ANZAC v Cumbria ANZAC v Cumbria 27 October Derwent Park, Workington 4,203

Source: RFL / Deloitte, 2006 In addition to the above, the North West has hosted the Super League Grand Final, at Old Trafford, Manchester, on an annual basis since its introduction in 1998. Table 1.4, below gives a breakdown of results and attendances since the competition’s inauguration. As can be seen below, attendance at the Super League Grand Final has increased year on year and certainly in recent years has been close to the capacity of Old Trafford. Table 1.4: Grand Final, previous finals, 1998-2006

Year Result Venue Attendance 1998 Wigan Warriors beat Leeds Rhinos Old Trafford, Manchester 43,5331999 St.Helens beat Bradford Bulls Old Trafford, Manchester 50,7172000 St Helens beat Wigan Warriors Old Trafford, Manchester 58,1322001 Bradford Bulls beat Wigan Warriors Old Trafford, Manchester 60,1642002 St Helens beat Bradford Bulls Old Trafford, Manchester 61,1382003 Bradford Bulls beat Wigan Warriors Old Trafford, Manchester 65,5372004 Leeds Rhinos beat Wigan Warriors Old Trafford, Manchester 65,5372005 Bradford Bulls beat Leeds Rhinos Old Trafford, Manchester 65,5362006 St.Helens beat Hull RLFC Old Trafford, Manchester 72,586

Source: RFL / Deloitte, 2006Note Old Trafford capacity increased from 56,000 to 68,000 in 2000 and to 76,000 in 2005



(vi) The Grass Roots Game The grass roots game is the lifeblood of any sport – and Rugby League retains strong links at grass roots level. Some key statistics reflecting the current situation are illustrated in table 1.5 below:

Table 1.5: Key Statistics for Grass Roots Rugby League in the North West, 2006

Clubs 119 amateur clubs, with almost 14,000 club players 79 regional clubs 66% of clubs have junior sections 49 clubs are accredited with Clubmark, a recognition of

quality for clubs All regional playing leagues from U8 to U12 have

reported an increase in the number of teams taking part in competitions

Education sector 159 secondary schools play Rugby League, around 25% of all secondary schools in the North West

16 University teams and a further 15 college teams Participation Almost 90,000 North West individuals were recorded as

taking part in Rugby League between September 2005 and August 2006. Steps to refine this measurement are being taken which are likely to increase the number further.

Community Programmes delivered to over 60,000 individuals Over 50 full-time or part-time rugby community

development staff Numerous other volunteers support community

programmes Source: RFL This suggests that at grass roots the Game has a strong base of support upon which to build. The challenge for Rugby League in the North West is to develop this participation base further, and to build on this to deliver growth to the professional clubs.

Sport England’s Active People Survey results3 show that Rugby League is 37th in the ranking of adult participation in sports and recreational activities in England. 0.2% of the adult population (i.e. over 16) take part at least once a month. This equates to c.111,000 individuals. Table 1.6 compares adult participation figures for Rugby League against other sports.

Table 1.6: Adult participation in selected sports in England

Rank % of the adult population (16 plus) taking part at least

once a month

Number of adults (16 plus) taking part at least once a month

Football 5 7.1 2,911,000 Golf 7 3.6 1,457,300 Tennis 9 2.1 874,000 Cricket 17 0.9 380,000 Rugby Union 21 0.7 268,000 Rugby League 37 0.3 110,000

Source: Sport England Active People Survey

3

The Active People Survey was carried out by Ipsos MORI on behalf of Sport England. It is the largest sport and recreation survey ever undertaken. In total 363,724 people were interviewed (a minimum of 1,000 in each local authority area) by telephone across England between the period mid October 2005 to mid October 2006. The sample was random stratified and the results are representative of the total adult population in England, the English regions and local authorities in England.



The above table shows results for England as a whole, and the position in the North West is likely to be stronger for Rugby League than across the nation. That said, there is clearly scope for Rugby League to develop its participation base further – amongst adults and also at junior levels.



2. Economic Assessment of Rugby League in the North West

2.1 Introduction This section of the report details the findings of Deloitte’s economic assessment of Rugby League in the North West4. Based on information provided by the RFL and individual clubs with which we consulted, Deloitte have sought to capture the economic value - including GVA5 - of the professional and semi-professional game to the North West economy. The model used in the study shows the extent to which the industry is linked with the rest of the economy and what the contribution of the industry currently is, rather than suggesting what would happen to the North West economy if the sport did not exist.

The SLGF and region-wide contribution analysis have been conducted as separate research streams. It is possible to treat the two elements as additive subject to the following caveat. There will be some degree of crossover between the two due to funding flows between clubs and funds raised as a result of the SLGF. The level of financial information provided to Deloitte as part of the study did not detail specific flows between club and governing bodies as a result of the SLGF, and as such this cannot be factored out of either analysis. To be able to comment on the magnitude and thus materiality of this discrepancy when adding the 2 streams together would require further information.

2.2 Our approach to measuring economic impact This section outlines Deloitte’s input-output methodology for calculating the economic value of Rugby League to the North West region. Many impact studies of sports events use the well-known UK Sport economic impact model. The UK Sport Model is a framework within which to conduct surveys and calculate the direct impact of sporting events, rather than an off-the-shelf model capable of conducting impact assessments. The UK Sport Model suggests a number of questions to ask to discern the direct economic impact of a sporting event.

The Deloitte methodology is entirely consistent with the UK Sport Model in the type of questions asked, and thus the type of results received from the SLGF survey. Where the Deloitte methodology differs is in the treatment of knock-on economic benefits or multipliers. The UK Sport Model advocates the exclusion of multiplier analysis on the grounds of the results being influenced by the economic structure of the area in question. Whilst this is a viable argument, by excluding economy wide effects, the 4 Defined as the North West Government Office region 5 Total expenditure generated by Rugby League is relevant in assessing the contribution made to UK Plc. However, using expenditure alone does not acknowledge the fact that no value is added by the sourcing of physical inputs alone. It is what the organisations in question do with those inputs that contribute to the economy, rather than simply purchasing the inputs. In simple terms, expenditure can be adjusted to exclude intermediate demand so that only the real or gross value added by companies is included in the analysis and the impact does not double count. This means that the real measure of economic contribution (or Value Add) - and the one which can be most readily compared to national indicators such as Gross Domestic Product (GDP) – is given by GVA. To obtain this estimate it is necessary to adjust expenditure to isolate the value added in terms of operating profit and wages paid based on data from Office of National Statistics.



impact of a sporting event on a wider area is likely to be underestimated. As such this was an unsuitable framework for assessing the impact on the wider economy which was outlined as a key study requirement.

In the case of this study, the direct impact would only deliver the on-site expenditure during the SLGF as well as the costs imposed on an individual as a result of attending SLGF. It would exclude any beneficial supply-chain effects and those jobs that are upported indirectly by the SLGF. s

2.2.1 Deloitte’s methodology Figure 2.1, below, illustrates the three stages adopted during Deloitte’s assessment of Rugby League’s economic value to North West economy, specifically these were:

• Stage 1: Data collection and consultation;

• Stage 2: Estimating the direct impact; and

• Stage 3: Input-Output modelling. Figure 2.1: Deloitte’s approach to calculating economic impact

Stage 1: Datacolle

Source: Deloitte, 2006 A detailed explanation of the methodology, including the multipliers used in the modelling stage can be found in Annex 1.

2.3 Value of Rugby League to the North West economy Based on the input-output model findings, a number of key points can be made covering the:

value of Rugby League in total expenditure and GVA terms; and

number of North West jobs supported by Rugby League.

(i) Value of Rugby League in expenditure and GVA terms

Based on the information provided by the clubs in the North West and the RFL our analysis indicates that core rugby league activity generates approximately £38m of expenditure annually. We have defined core activity as the thirteen Super League and National League clubs based in the North West. Figures 2.2 and 2.3, illustrate the Rugby League’s turnover split by club and sub-regional area.

ction &consultation

Collation of financial and

employee data from the RFL, and

rugby league clubs in the North

West

Stage 2:Estimating the

direct impactTranslation of

collated data into estimated rugby

league total direct expenditure by

industry.

Stage 3:Input - Output

modelingDevelopment of an

Input - Output model

to calculate the knock on effects of

any expenditure identified in stage 1

Stage 1: Datacollection &consultation




West





industry.


modellingDevelopment of an

Input – Output Modelto calculate the

knock on effects of any expenditure

identified in stage 1





West





industry.










West





industry.








Figure 2.2: Turnover by club (£m)

5.3

5.2

3.7 2.3

0.4

0.3

0.2

0.0

0.0

0.0

5.5 1.8

2.2

0.6

Warrington WolvesSt HelensWigan WarriersWidnes VikingsSalford City RedsLeigh CenturionsWhitehavenBarrow RaidersRochdale HornetsSwinton LionsBlackpool PanthersOldham RLFCWorkington Town

Note – National League clubs with zero amount in figure = no information available as clubs unable to supply data within timescale Source: Deloitte, 2006

Figure 2.3: Turnover by Area (£m) 0 = no information available

0.0

1.0

7.6

5.2

8.2

Greater ManchesterMerseysideCheshireCumbriaLancashire

0.0

1.0

7.6

5.2

8.2

Greater ManchesterMerseysideCheshireCumbriaLancashire

Note – Zero amount for Lancashire as no information available as clubs unable to supply data within timescale Source: Deloitte, 2006 Deloitte’s input-output model estimates that this expenditure leads to a further £15.6m expenditure on goods and services produced in the North West region; giving Rugby League a total expenditure value of approximately £53.6m.

In terms of Value Added Rugby League’s total contribution to the North West economy is in the region of £46.5m.



Analysis of the relevant financial accounts suggests that much of the GVA created by clubs, with GVA being made up of wages and profit, is traceable to payroll rather than profit.

Figure 2.4 demonstrates the value of expenditure related to Rugby League in the North West. Figure 2.4: Rugby League expenditure (Total Direct, B2B Additional and Consumer Additional)

0 10 20 30 40 50 60

North West

Expenditure (£,m)

Total Direct Expenditure B2B Additional Expenditure Consumer Additional Expenditure

0 10 20 30 40 50 60

North West

Expenditure (£,m)


Note: Total Direct Expenditure = amounts associated directly with club turnover, B2B Additional expenditure = amounts associated with expenditure within the supply chain and Consumer Additional Expenditure = labour and extra wages paid within the supply chain. Source: Deloitte, 2006 (ii) Number of North West jobs supported by Rugby League

The evaluation process indicated that Rugby League directly supports around 560 Full-Time Equivalent (FTE) jobs in North West. Please note that in figures 2.5 and 2.6 we have assumed a 5% uplift to take account of those people who are employed as a result of rugby league but not directly by the clubs. It also reported a further 280 within the region owing to supply chain effects. This resulted in a total figure for supported jobs of approximately 840.



Figures 2.5 and 2.6, below, illustrate the FTE job number split by club and sub-regional area.

Figure 2.5: Full Time Equivalent jobs by club

100

91

62

50

19

18

18

18

14

11

226 28

50

50

St HelensWarrington WolvesWigan WarriersSalford City RedsLeigh CenturionsWidnes VikingsWhitehavenBarrow RaidersBlackpool PanthersOldham RLFCWorkington TownRochdale HornetsSwinton Lions

Source: Deloitte, 2006

Figure 2.6: Full Time Equivalent jobs by area

205

141

100

65

18

Greater ManchesterCheshireMerseysideCumbriaLancashire

205

141

100

65

18

Greater ManchesterCheshireMerseysideCumbriaLancashire




The following comments can be taken from the above:

• As expected the majority of the full time positions are within the current Super League clubs or those that have competed in Super League;

• Around 700 players, from academy age to adult, are involved in professional clubs within the region, of these only 160 are full time professionals, 150 of these are from those clubs who have competed in Super League; and

• The lower number within Wigan Warriors compared to St Helens and Warrington Wolves is likely to be due to the fact that they share facilities with a Premiership football team and some operational functions will be shared.



3. Economic Impact of the Super League Grand Final3.1 Introduction This section of the report outlines the findings of Deloitte’s EIAof the SLGF held at Old Trafford, Manchester, on 14 October 2006.

Specifically, it covers an:

• Overview of the Super League Grand Final;

• Our approach to measuring economic impact;

• Outputs from the SLGF EIA;

- Survey results;

- Model Outputs; and

- Sensitivity Testing.

• Policy implications from EIA findings.

3.2 Overview of the Super League Grand Final During 1995, it was announced that beginning with the1996 season, the top clubs in professional Rugby League would form Super League, funded by an exclusive television contract with BSkyB. Since March 2006, Super League Europe have controlled the Super League regular season where each team plays 28 games over 28 rounds from February to September. The first 2 seasons adopted the traditional approach of the team leading the league table at the end of season being crowned champions. From 1998, the top five teams in Super League, amended to top 6 for 2003 season, would play a further competition, the playoffs, to decide which team finished as champion. The inaugural season of Super League was won by St Helens who also won the Challenge Cup in the same year.

This play-off structure, based on a successful Australian model, is used to determine which two teams will contest the Super League Grand Final and ultimately be crowned Super League Champions. The final is held at the end of every Super League season at a neutral venue. This has, since the format’s introduction in 1998, been Old Trafford, Manchester. Whilst the top side at the end of the Super League match programme are awarded the League Leader’s Shield, it is victory at the Super League Grand Final which is considered the ultimate prize. Figure 3.1 demonstrates how the Super League Grand Final series works. The Grand Final series is structured to reward the teams finishing highest in the Super League by guaranteeing that the top two sides play fewer games en route to the final. In addition, the higher placed club have choice of ground for the earlier rounds and are granted home advantage regarding colours and dressing room etc. This strategy has proved successful as only once in the history of the event has a team6 finishing outside the top two gone on to win the Super League title at Grand Final.

6 Bradford Bulls in 2005.



Figure 3.1: Route to the Super League Grand Final

WEEK 2


3.3 Our approach to measuring economic impact This section outlines Deloitte’s input-output methodology for calculating the economic impact of the SLGF on the Greater Manchester area7 and the wider North West region. 3.3.1 Deloitte’s methodology Figure 3.2, below, illustrates the three stages adopted during this EIA, specifically these were:

Stage 1: Surveying;

Stage 2: Estimating the direct impact; and

Stage 3: Input-Output modelling. Figure 3.2: Deloitte’s approach to calculating economic impact

Source: Deloitte, 2006 A detailed explanation of the methodology, including the multipliers used in the modelling stage can be found in Annex 2.

7 Defined as a Metropolitan County containing ten metropolitan boroughs, specifically: Bolton, Bury, the City of Manchester, Oldham, Rochdale, the City of Salford, Stockport, Tameside, Trafford and Wigan.

Stage 1: SurveyingCollation of

SLGF expenditure data using

primary survey techniques

Stage 2: Estimating the direct impact Translation of

survey data into estimated total

direct expenditure, by industry as

result of the SLGF

Stage 3: Input-Output

modellingDevelopment of an Input-Output model



WEEK 1 WEEK 3 WEEK 3

Semi Final A: 3rd vs 6th

Semi Final B: 4th vs 5th

Elimination Final: Winner A vsWinner B

Qualification Match:

1st vs 2nd

Final Qualifier:Winner of

Elimination Final vsLoser of

Qualification Match

Grand Final:Winner of

Qualification Match vs Winner of Final

Qualifier

WEEK 2 WEEK 3WEEK 1 WEEK 3

Semi Final A: 3rd vs 6th

Semi Final B: 4th vs 5th

Elimination Final: Winner A vsWinner B

Qualification Match:

1st vs 2nd

Final Qualifier: Grand Final:Winner of

Elimination Final vsLoser of

Qualification Match

Winner of Qualification Match vs Winner of Final

Qualifier



3.4 Outputs from the SLGF Economic Impact Assessment This section details the results of the SLGF EIA. It covers the following key outputs:

• The spectator expenditure survey findings;

• The input-output model outcomes; and

• The outcomes from the sensitivity tests. 3.4.1 Expenditure supporter survey findings Deloitte contracted Aspect Market Research to undertake a survey of Rugby League supporters around Old Trafford in the 3 hours prior to kick-off on the day of the SLGF. The questionnaire was developed in conjunction with NWDA. In total, a sample was taken of 270 with the following quotas as agreed with NWDA.

• A minimum of 200 face to face interviews to be undertaken;

• A quota of at least 70 interviews with spectators from outside the North West; and

• An out of quota sample of 200 others were asked a single question on where they had come from to be used in the economic impact calculations.

The findings of the survey are presented below divided into the following categories:

• Respondents’ characteristics;

• Respondents’ expenditure details; and

• Respondents’ party details. (i) Respondents’ characteristics

Figure 3.4, provides an overview of the survey respondents’ characteristics. Figure 3.4: Respondents by Gender; Age; Support allegiance; Socio-economic; Type of ticket; and Normal residence (%)

Male 64%

Female 36%

Gender (%) Age (%)

Male 64%

Female 36%

Male 64%

Female 36%

Male 64%

Female 36%

23%

35-44 years

30%

25-34 years

14%

65 and over

3%55-64 years

14%

16-24 years

16%

45-54 years

23%

35-44 years

30%

25-34 years

14%

65 and over

3%55-64 years

14%

16-24 years

16%

Gender (%) Age (%)

Male 64%

Female 36%

Male 64%

Female 36%

Male 64%

Female 36%

Gender (%) Age (%)

Male 64%

Female 36%

Male 64%

Female 36%

Male 64%

Female 36%

Male 64%

Female 36%

23%

35-44 years

30%

25-34 years

14%

65 and over

3%55-64 years

14%

16-24 years

16%

45-54 years

23%

35-44 years

30%

25-34 years

14%

65 and over

3%55-64 years

14%

16-24 years

16%

Gender (%) Age (%)



AB

21%

C127%C2

30%

DE

19%

Not

stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

Socio Economic (%)Supporter allegiance (%)

AB

21%

C127%C2

30%

DE

19%

Not

stated

3%AB

21%

C

C2

30%

DE

19%

Not

stated

3%AB

21%

C1

27%C2

30%

DE

19%

Not

stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%


AB

21%

C127%C2

30%

DE

19%

Not

stated

3%AB

21%

C127%C2

30%

DE

19%

Not

stated

3%AB

21%

C127%C2

30%

DE

19%

Not

stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%


AB

21%

C127%C2

30%

DE

19%

Not

stated

3%AB

21%

C127%C2

30%

DE

19%

Not

stated

3%AB

21%

C

C2

30%

DE

19%

Not

stated

3%AB

21%

C1

27%C2

30%

DE

19%

Not

stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%

St Helens

43%

Hull

38%

Neutral

16%

Not stated

3%


Outside UK

1% Elsewhere in

Greater

Manchester

7%

City of

Manchester

1%

Elsewhere in

UK

53%

Elsewhere in

the North

West

38%

General

admission

99%

Corporate

1%

Normal residence (%)Type of ticket (%)

Outside UK

1% Elsewhere in

Greater

Manchester

7%

City of

Manchester

1%

Elsewhere in

UK

53%

Elsewhere in

the North

West

38%

Outside UK

1% Elsewhere in

Greater

Manchester

7%

City of

Manchester

1%

Elsewhere in

UK

53%

Elsewhere in

the North

West

38%

Outside UK

1% Elsewhere in

Greater

Manchester

7%

City of

Manchester

1%

Elsewhere in

UK

53%

Elsewhere in

the North

West

38%

General

admission

99%

Corporate

1%

General

admission

99%

Corporate

1%

General

admission

99%

Corporate

1%

Normal residence (%)Type of ticket (%)

Source: Aspect Market Research / Deloitte, 2006 The following comments can be attributed to the graphs in figure 3.4: • From the sample taken there is a good representation from across all age

groups and a relatively high proportion of female respondents. This appears to support the RFL’s new marketing campaign based on Rugby League being the family game.

• The split between Hull & St Helens supporters is as expected. St.Helens have

a higher percentage of supporters as they are the local side with a higher average attendance in their Super League fixtures.

• There is a large number of neutral supporters, which may illustrate the

attraction of the match to a broader fanbase than just those of the two clubs. This supports our consultation findings which suggested that the SLGF is considered a celebration of the game in its heartland.



(ii) Additional Impact

In terms of calculating the additional impact of the SLGF, the results of normal residence was of particular importance. Of the 270 respondents questioned:

1 normally lived in the City of Manchester; 18 normally lived elsewhere in Greater Manchester; 103 normally lived elsewhere in the North West; 144 normally lived elsewhere in the UK; and 4 normally lived abroad.

These results produced a 46/54 percentage split between respondents’ from inside the North West and those outside the North West. This ensured that the survey’s expenditure findings fell within appropriate confidence intervals and informed a statistically robust measure of the economic impact of the SLGF.

These findings are supported by ticket booking information provided by the RFL for the SLGF. Figure 3.5, below indicates the areas from which the 8,683 bookings (that is 8,683 sales transactions not actual tickets) were sold. The darker areas illustrate where more sales transactions took place. From a future policy perspective, this booking information indicates potential future interest in the SLGF from outside the region.

Figure 3.5: Areas where RFL SLGF sales transactions were sourced.

Source: Deloitte/RFL, 2006 Notes: the boxed area is an approximation of the North West region (iii) Respondents’ expenditure details

Figures 3.6 to 3.8 provide an overview of the survey respondents’ expenditure details. Of particular interest is the expenditure – both total and spend per head - of the 55% of respondents from outside the North West (see figures 4.6 and 4.7). This expenditure is 100% additional to the North West economy.



We would make the following comments:

• The graphs indicate that the most common spending categories were

meals & drinks, transport outside Manchester, and retail. • These trends were replicated in terms of actual expenditure for those

from outside the North West. The major spending categories for those respondents were meals and drinks, transport outside Manchester and serviced accommodation.

• Whilst fewer survey respondents spent money on serviced

accommodation this area contributed significantly more to the North West economy than most other spending areas.

• The categories which did not include significant expenditure were non-

serviced accommodation and bought groceries.

Figure 3.6: Area of expenditure, SLGF 2006

7

2

71

21

39

61

48

22

93

98

29

79

61

39

52

78

0 20 40 60 80 100

Accommodation (serviced)

Accommodation (non-serviced)

Meals and drinks

Groceries

Transport and travel (Manchester)

Transport and travel (non Manchester)

Retail shopping

Other leisure spending

Yes No

% of respondents

7

2

71

21

39

61

48

22

93

98

29

79

61

39

52

78

0 20 40 60 80 100



Meals and drinks

Groceries



Retail shopping


Yes No

% of respondents

7

2

71

21

39

61

48

22

93

98

29

79

61

39

52

78

0 20 40 60 80 100



Meals and drinks

Groceries



Retail shopping


Yes No

% of respondents

Source: Aspect Market Research / Deloitte, 2006 Figure 3.7: Areas of expenditure, SLGF 2006

0 20 40 60 80 100 120

Accommodation (serviced) Accommodation (non-serviced)

Meals and drinks Groceries

Transport and travel (Manchester) Transport and travel (non Manchester)

Retail shopping Other spending

£1-10 £11-20 £21-£30 £31 - £50 £51 - £75 £76 - £100 £101+

% of respondents who answered yes to above

Source: Aspect Market Research / Deloitte, 2006



Figure 3.8: Estimated total spending (£) from outside the North West

2165.00

3975.00

3347.50

1370.00

1612.50

932.50

487.50

137.50

0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00


Accommodation (non serviced)

Meals and drinks

Groceries

Transport and Travel (Manchester)


Retail shopping

Other spending

2165.00

3975.00

3347.50

1370.00

1612.50

932.50

487.50

137.50

0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00



Meals and drinks

Groceries



Retail shopping

Other spending

2165.00

3975.00

3347.50

1370.00

1612.50

932.50

487.50

137.50

0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00



Meals and drinks

Groceries



Retail shopping

Other spending

Source: Aspect Market Research / Deloitte, 2006

(iv) Respondent party size details. A final important output from the spectator survey was the findings concerning the number of people which the expenditure outcomes covered. The survey indicated that all expenditure figures were based on an average party size of 2.48 people. This was used in calculating the spend-per-head figures.

3.4.2 Input-output model outcomes The input-output model estimated the economic impact of the SLGF’ on both the Greater Manchester area and the North West region. (i) Greater Manchester area

The input-output model estimated that the overall impact of the SLGF on the Greater Manchester area to be approximately £2.6m in expenditure terms, or approximately £1.39m in GVA terms. In other words, for every £1 firms turned over directly as a result of the SLGF, just over 50% represents net new output retained as profit or paid in wages. Based on a multiplier effect of 1.31, the total local multiplier effect in expenditure terms of the SLGF is calculated to be £0.62m. The 1.31 multiplier comes from Deloitte's UK input-output model which is re-sized to fit the North West regional economy. For more information on Deloitte's EIA methodology please see Appendix 2. This means that for every additional £ spent in Greater Manchester as a result of the SLGF, a further 31p is generated by supply chain links in the local economy.

In addition to the expenditure impact of the SLGF it was also calculated to support approximately 50 FTE jobs (per annum) across the Greater Manchester area, excluding those positions employed at Old Trafford. It should be noted that the staff employed at Old Trafford on the day of the SLGF (e.g. stewards or catering staff etc.) are not additional employees as a direct result of the SLGF as they would employed at Old Trafford regardless.

This does not imply that 50 FTE jobs were created by the SLGF but rather that the activity related to SLGF is associated with 50 FTE jobs. To be clear, the



report cannot assume that in the absence of the Grand Final these jobs would disappear, and workers would not find equivalent employment elsewhere.

(ii) North West region

The overall impact of the SLGF on the North West region is estimated to be approximately £2.2m in expenditure terms, or approximately £1.14m in GVA terms. In other words, for every £ firms turned over directly as a result of the SLGF, just over 50% represents net new output retained as profit or paid in wages.

Based on a multiplier effect of 1.44, the total local multiplier effect in expenditure terms of the SLGF is calculated to be £0.68m. The 1.44 multiplier comes from Deloitte's UK input-output model which is re-sized to fit the North West regional economy. For more information on Deloitte's EIA methodology please see Appendix 2. This means that for every additional £1 spent in the North West region as a result of the SLGF, a further 44p is generated by supply chain links in the local economy.

In addition to the expenditure impact of the SLGF it was also calculated to support approximately 40 FTE (per annum) jobs across the North West region.

Figure 3.9 demonstrates the value of expenditure related to the SLGF to Greater Manchester and the North West region. Of particular interest is the negative expenditure for the rest of North West (i.e. outside Greater Manchester) this is due to the location of the Grand Final within Greater Manchester.

Figure 3.9: SLGF expenditure (Total Direct, B2B Additional and Consumer Additional)

-1.00 0.00 1.00 2.00 3.00

Greater Manchester

Rest of North

North West

Expenditure (£,m)


Source: Deloitte, 2006 3.4.3 Outcome from the sensitivity tests In addition to estimating the economic impact of the SLGF on the Greater Manchester area and the wider North West region, the NWDA also requested that Deloitte run a sensitivity test to examine the potential impact of a 5% increase in the number of people staying 1 night and a 2% increase in the number of people staying 2 nights.



This section covers:

• The revised sample size; and

• The outcomes of the sensitivity test.

(i) Revised sample size Table 3.2, below, demonstrates the effect of the sensitivity on the overall number of attendees of a 5% increase in the number of people staying 1 night and a 2% increase in people staying 2 nights. The overall effect would be an increase of 220 people from outside the North West staying additional nights in the North West.

Table 3.2: Numbers of over-night visitors as a result of the sensitivity test (from within and outside the North West) No. of nights Attendees from within

the North West Attendees from outside the North West

1 night 484 3,279 2 nights 415 2,811 Sensitivity increase 1 night 24 164 2 nights 8 56 New total 1 night 508 3,443 2 nights 423 2,867 Source: Deloitte, 2006 (ii) Effect of the sensitivity on EIA results

The overall affects of sensitivity are demonstrated in table 3.3, results of the sensitivity are limited.

Table 3.3: Additional effects of the sensitivity test Greater Manchester area North West regionAdditional expenditure £23,000 £20,000Additional GVA £17,000 £15,000Additional Jobs supported 1 1

Source: Deloitte, 2006 However, of more interest is grossed up results regarding increased expenditure spend by the additional numbers staying an extra 1 or 2 nights. Based on our expenditure analysis of respondents staying overnight we were able to estimate that average spend per person staying an additional night was approximately £138.00.

3.5 Policy implications of the SLGF EIA findings The findings from our EIA of the SLGF clearly indicate the additional value to the local and regional economy of increasing the number of overnight visitors in relation to SLGF.

Figure 3.10, illustrates hotel occupancy rates in Central Manchester during October 2006. The affect of the SLGF is significant. The evening of the SLGF – Saturday 14 October – produced an occupancy rate of 98%. This was only bettered on Tuesday 17

October when Manchester United played FC Copenhagen in the UEFA Champions League and occupancy rates of 99% were recorded.



Figure 3.10: Hotel occupancy rates in Manchester, October 2006

0

10

20

30

40

50

60

70

80

90

100

Sunday 01

Monday 02

Tuesday 03

Wednesday 04

Thursday 05

Friday 06

Saturday 07

Sunday 08

Monday 09

Tuesday 10

Wednesday 11

Thursday 12

Friday 13

Saturday 14

Sunday 15

Monday 16

Tuesday 17

Wednesday 18

Thursday 19

Friday 20

Saturday 21

Sunday 22

Monday 23

Tuesday 24

Wednesday 25

Thursday 26

Friday 27

Saturday 28

Occ

upan

cy (%

)

Source: Deloitte/Marketing Manchester (Tourist Board covering Greater Manchester area), 2006

Given the current occupancy rate of 98% on the day of the SLGF, there does not appear to be a great deal of existing headroom for growth. However, hotel capacity in the Manchester area is increasing and so more rooms are becoming available. Equally, if demand on a certain day increases, then visitors who can visit on another day may be displaced to other less busy days / weekends. Equally, it may indicate some potential for hotels to increase prices on the SLGF day. In any event, it certainly seems clear that encouraging more overnight stays by SLGF visitors is a sensible strategy from an economic impact point of view. In order to translate these findings into effective public policy which expands the SLGF and increases the number of overnight visitors the relevant public sector agencies need to work together to promote the SLGF as more than a single destination event. Our consultation programme indicated strong support from the various public agencies – primarily Marketing Manchester and Manchester City Council – to work with potential partners to promote the SLGF as part of a wider weekend package tour and collective City-wide marketing approach.

In particular, the SLGF could be a key component of Marketing Manchester’s brand campaign around the various high profile sporting events in 2008, including the UEFA Cup Final being held at the City of Manchester stadium. Another idea highlighted involved making the SLGF the culmination event of a week long celebration of Rugby League beginning with the Man of Steel dinner on the Monday evening followed by various events promoting the game leading up to the final.

There was widespread acknowledgement from the consultations however, that shifting the perception of the SLGF will take time and developing and implementing a strategy to do this would require careful planning.



4. Supply chain characteristics of a ‘typical’ professional club

4.1 Introduction This section of the report outlines the findings of Deloitte’s analysis of the supply chain of a typical professional Rugby League club.

Specifically, it covers:

• How the club was selected;

• A high level Supplier Map;

• Supply Chain analysis, looking at level and location of spend; and

• Conclusions and recommendations.

4.2 Case study club In conjunction with the NWDA and RFL, Warrington Wolves were selected as the supply chain case study club for the following reasons:

• All parties agreed that a Super League club would be used for the case study;

• Warrington are established in a modern ground, whereas St Helens and Salford City Reds are currently planning to re locate to new stadia; and

• Wigan Warriors ground share with Wigan Athletic Football Club which could distort any analysis.

Warrington Rugby League club was established in 1879 and is one of the few clubs to play every one of their seasons in the top flight of the sport. In 2003 they relocated from their traditional home of Wilderspool to the newly created Halliwell Jones Stadium.

As well as being successful in their sport, Warrington have led the way in developing links with the community to encourage participation in physical activity and to improve the quality of life of the town’s population. The stadium now hosts the local Primary Care Health Trust, has a floor dedicated to the community and is home to the Foundation, a stand alone charitable trust comprising representatives from the local authority, community groups and the club.

4.3 Mapping the supply chain In order to understand and produce a high level map of the supply chain of the club, desk based research and face to face consultation was undertaken to understand:

• The financial position of the club, including full income and expenditure and sources and direction of funds;

• Any patterns in the supply chain;

• Nature and scale of goods and services procured between 2004 and 2006;

• Geographical spend between 2004 and 2006; and

• Procurement methods utilised.



Once the research was undertaken it became apparent that due to the large number of suppliers, many of which had a low level of spend, a detailed supply chain map would not add value to the assignment and that a high level view of the supply chain, highlighting the key areas and value of spend would be more beneficial.

In providing this high level view we grouped the expenses into 11 common areas, which we feel will be replicated across other Super League clubs. In addition the major spend item for the club, salaries, was omitted from the supply chain diagram below.

Figure 4.1: Supply chain key expenditure areas

Catering Warrington

Wolves

Merchandise & Kit

Printing and Stationary

Security TravelProfessional Services

Supply Chain Key expenditure areas

Utilities Catering

Cleaning

Stadium

Medical

Miscellaneous

300k + 200k – 299k 50k – 199k

Catering Warrington

Wolves

Merchandise & Kit

Printing and Stationery



Utilities Catering

Cleaning

Stadium

Medical

Miscellaneous

300k + 200k – 299k 50k – 199k

Catering Warrington

Wolves

Merchandise & Kit

Printing and Stationary



Utilities Catering

Cleaning

Stadium

Medical

Miscellaneous

300k + 200k – 299k 50k – 199k

Catering Warrington

Wolves

Merchandise & Kit

Printing and Stationery



Utilities Catering

Cleaning

Stadium

Medical

Miscellaneous

300k + 200k – 299k 50k – 199k

4.4 Supply chain analysis Financial Analysis Based on the analysis period, 2004 – 2006, from data provided directly from Warrington Wolves, the club spent £2,774k with key suppliers on non salary goods and services. A full breakdown is provided in table 4.1.



Table 4.1: Warrington Wolves expenditure breakdown Expense Area Amount

(£000’s) Merchandise and Kit 858 Utilities 342 Catering 341 Printing and Stationery 236 Professional services 217 Security (Including Police) 203 Travel 200 Cleaning 165 Stadium (Non construction) 84 Medical/supplements 64 Miscellaneous 58

The above expenditure was undertaken with 62 key suppliers. Of these, 23 are Warrington based, a further 17 are based within the region, 21 others are based within the UK and 1 is an overseas supplier. 72% of Warrington Wolves total expenditure is with suppliers who are based within the North West, a total of £2,014k and 99% of their expenditure is within the UK. Figure 4.2 provides a full breakdown of the geographical expenditure of Warrington Wolves.

Figure 4.2: Warrington Wolves expenditure by region

North West 27%

Warrington (39%)

Cheshire (6%)

UK (27%)

Overseas (1%)

North West 27%

Warrington (39%)

Cheshire (6%)

UK (27%)

Overseas (1%)


Of the 62 suppliers, major suppliers (defined as those with expenditure of over £50,000 during the 3 year period), account for 75% (£2.1m) of the total expenditure. Of these 16 major suppliers, 12 are based in the North West and account for £1,522k of expenditure.

Opportunities for North West Companies

From the consultation it was clear that Warrington Wolves have adopted a policy of using local suppliers whenever possible, which is supported by the analysis above. However, of the expenditure outside the region four areas of opportunity have been identified for North West companies to a) enter into supply of goods or b) grow their percentage of market share with the club.



• The first area of opportunity is in player supplements and medical supplies.

This area accounted for £64k of expenditure over the 3 year period and is evenly spread over the 3 years. Currently all the suppliers in this area are outside the North West. In addition, the value of this expenditure is likely to be replicated across all the Super League clubs, with similar figures in the national league.

• Secondly, although North West companies do supply security resource and equipment to the club, a further 40% of spend is available to North West companies.

• The third area of opportunity is in the area of vehicle leasing, currently all this area is supplied from outside the region. One reason for this is that the headquarters of these organisations are based outside the region and thus the billing address shows outside the region.

• The final area of opportunity is around ticketing, this opportunity could be developed in two ways, firstly there is the opportunity for a North West supplier to take on this service or Warrington Wolves could provide the service, which may offer savings to the club.

4.5 Conclusions A supply chain for any organisation is a chain of processes and activities that should support the goals of the organisation. The main elements of a supply chain are its structure, capacity, performance and the management of the process and logistics. From the consultations, it was apparent that in keeping in line with their overall community agenda, Warrington Wolves have adopted to use local suppliers wherever possible. This has led to a supply chain structure that it is predominantly North West based, which has allowed the club to build relationships with key suppliers. Evidently, this has a positive impact on the local and regional economy by retaining expenditure in the region. For example Heathcotes, who supply all the catering to the club are seen as a partner rather than a supplier.

• One area for potential improvement, which we understand is being addressed, is around the procurement and measurement function, which at the moment is too limited and seen as a clerical function. There are few formal contracts in place and no formal procurement procedure. By introducing a procurement process there are opportunities for the club to a) build stronger relationships with suppliers, b) improve the quality of the goods by increasing competition and c) potentially improve the profitability of the club by decreasing the cost of goods and services reducing administration costs within the club.

• One further consideration, from the supply chain analysis is that the Super

League clubs procure many similar goods, such as medical suppliers, supplements for players and security for match days. Currently these items are purchased individually and if they could procure these in collaboration they would have greater strength when negotiating. One option for consideration in this area is for the RFL to act as lead partner in these areas as per their agreement with the current ball supplier.



5. Future developments in Rugby League 5.1 Introduction This section puts forward some conclusions on the future economic growth potential of Rugby League across the North West focusing particularly on the region’s current (and aspiring) Super League clubs and major Rugby League events.

For context, we firstly draw on the Super League and National League strategy documents. We then outline some of the key challenges facing the sport as identified by the stakeholders we consulted with. We conclude by outlining a number of potential growth areas relating to the sport’s national and international development drawing upon the findings from our consultations and linking in the potential areas where NWDA might be able to assist the RFL.

5.2 Context – Rugby League’s strategic development For context, table 5.1 below summarises some important aspects of the major strategic documents relating to the development of Rugby League in the UK: Super League (Europe) Limited’s strategy for the period 2005-08.

Whilst acknowledging Super League’s on-going success in terms of increased revenue, crowds and competition, Super League’s strategy document highlights a number of key strategic issues for the game at its highest level, specifically:

• The game’s narrow geographical focus;

• A lack of quality control across the Super League;

• Disparities between Super League club stadia; and

• The lack of central financial resource to support club activity. Table 5.1 Strategic development Strategic Issue

Context

The game’s narrow geographical focus

The Super League strategy is clear that Rugby League should be an expanding sport “that does not forget its roots” and that the game should expand from firm foundations. For example, the RFL Club Support Unit (CSU) is tasked with ensuring that existing Super League clubs (located in traditional Rugby League areas) are given support to grow their businesses to aid the overall expansion and growth of Super League. The strategy suggests potential demand exists at both national and international level outside the sports traditional heartlands. It suggests South Wales and the Midlands may provide further expansion opportunities alongside Cumbria and the North East. London is also identified as an underutilised opportunity. At the international level the strategy suggests that a second French team could join the Super League in 2009 or beyond with the broader aim of rejuvenating French Rugby League and the international game in the Northern Hemisphere. From the point of view of North West Rugby League clubs, stronger teams from other parts of the UK and/ or France might add to the overall



attractiveness of the sport, and eventually to higher commercial, broadcast and other revenues if the sport grows significantly in new markets. That said, growing and developing the game in this manner is necessarily a long-term approach. For clubs in the North West, particularly the smaller clubs, it will be important to ensure that time, money and other resources spent in growing the market for the game elsewhere are not at the expense of investment in the North West, which remains a core market.

A lack of quality control across the Super League

The Super League strategy states that maintaining the quality of Super League and its clubs should be a central focus over the next five years. It states that Super League membership should be “a prize hard won.” It suggests that quality can be maintained through the introduction of quality control processes – in effect minimum criteria - as part of an on-going improvement process. In practical terms, this will be achieved through the application of Super League standards and a points assessment8 applied across four criteria: stadium facilities, player production, financial strength and stability, club infrastructure and marketing.

This assessment will be followed by regular inspections for a minimum of four clubs per year to ensure improved performance and maintenance of high standards. As average standards continue to grow the strategy indicates that winning the National League will not in itself be sufficient to gain entry into the competition. The imperative for North West clubs is to ensure as many as possible meet and exceed the minimum criteria. This is one area where the NWDA and other stakeholders may be able to assist North West clubs. Improving business performance is a priority of the RES, by working with clubs to improve their business functions could assist their financial stability and marketing programmes.

The disparities between Super League club stadia

The Super League strategy states that new stadia and improved facilities are proven to lead to bigger crowds and more vibrant clubs. Therefore the strategy highlights the strategic role that Super League can play in facilitating new and improved stadia and facilities.

The Super League’s vision is for all Super League clubs to be playing in modern stadia with a capacity of at least 10,000. In addition, the aim is for a number of leading National League clubs to be playing in similar stadia to ensure they can challenge for Super League status. The strategy suggests a partnership approach with Rugby Union’s Premier Rugby organisation as a way of maximising government support for a Rugby Trust. In addition, the strategy suggests that the RFL Development Department should provide help and guidance to clubs on how best to obtain alternative funding for stadiums. Some North West clubs have successfully developed new facilities, whilst others are still seeking to do so. The challenge is therefore for those remaining clubs to secure the funding to realise the aim of more modern facilities.

The lack of central financial resource to

The strategy states that the CSU will work closely with individual clubs to support initiatives to grow incomes to £3m per club across as many clubs as possible. The strategy confirms that the CSU will facilitate the clubs to grow their business by:

8 Applied to season 2006 (Super League XII)



support club activity

• Growing their home and away spectator base; • Having proactive ticket sales strategies; • Attracting increased local and national sponsorship; • Having best practice in running club lotteries; and • Maximising game day income. Of the North West Super League clubs, only Widnes does not currently reach that £3m goal. In addition, Salford and Leigh are arguably also large enough clubs to have this threshold as an aim.

In summary, SLE has a number of overarching strategic objectives, many of which are directly relevant for North West clubs. Building on this, we now look at the North West clubs in context and the key challenges facing those clubs.



5.3 Key challenges for Rugby League in the North West A number of key challenges have been identified during our consultation programme, specifically: expansion versus consolidation; marketing the game and enhancing its image; developing the grass roots; increasing regional sponsorship and corporate custom; staying ahead of the competition – football and other entertainment options; stadium development; attracting and retaining major matches – including the Grand Final at Old Trafford; and regional geography issues concerning Cumbria.

(i) Expansion versus consolidation

As already mentioned, achieving the appropriate balance between broadening the game’s geographical coverage and ensuring Rugby League’s continued development within its heartland is a critical challenge for the game’s future. Whilst many consultees agreed that the game’s geographical coverage should be broadened in time, some suggested that the RFL’s expansion plans have perhaps been too ambitious and that failed, and struggling, attempts to develop clubs in France (e.g. Paris St. Germain) and London have damaged the game’s reputation. Indeed, some consultees felt that resources used supporting these expansion plans could be better spent establishing 14 strong and well supported Super League sides from the game’s heartlands and using that as a basis for expansion. This challenge of balancing the game’s expansion with consolidation at a regional level is particularly pertinent for the North West’s aspiring and current Super League clubs because any decision made to protect the Super League status of a newly introduced team from outside the region could have a direct impact on the Super League future of the regions teams.

(ii) Marketing the game and enhancing its image

There was general agreement amongst consultees that Rugby League has an excellent product but that marketing the product effectively is a continued challenge. This point was picked up by the SLE Ltd strategy which recognised that the marketing of the game had to improve based on a clear understanding of its unique offer and how it should be projected. However, whilst this could be considered a challenge for the game in general it is also significant for the North West region given the many areas of the region which do not follow the sport. For example, a number of consultees highlighted that whilst Rugby League is widely followed in St. Helens, Wigan, and Warrington it is largely ignored in other North West towns of similar size and historical and cultural development, for example, Blackburn, Preston, and Bury. Within the North West region the heartland for the game is clearly variable in terms of intensity of support and development of the game. How and when to market the game effectively in these non-Rugby League playing / supporting areas of the North West is an important strategic decision.

(iii) Developing the grass roots Section 1 provided some figures related to grassroots and community involvement in Rugby League. The sport is one of Sport England's Top 10 'priority' sports and as a result receives more than £4 million per year (nationally) in Government investment



related to grassroots. It is important for the future of the game that at grassroots and community level, the RFL, Sport England and its partner organisations work closely with clubs to maximise participation and recruit and retain young players in the sport.

(iv) Increasing regional sponsorship and corporate custom All consultees reported that finding and sustaining strong regional sponsorship from local businesses was a continuous challenge in terms of sustainability and revenue generation. Linked to this is the continual challenge for clubs to develop and maintain good contacts with local businesses and ensure corporate hospitality offerings are attractive to local sponsors and businesses. A number of consultees indicated that Friday night fixtures had been particularly useful in boosting corporate hospitality sales for example.

(v) Staying ahead of the competition – football and other entertainment

options A significant number of consultees reported that the game in the North West faced intense competition for audiences – live and on television. Football was the most cited example but the rise in competing cultural and social activities were also mentioned. Rugby League is competing not only with other sports, but also within a wider leisure market where there are innumerable ways in which consumers can choose to spend their disposable income. The practical key to tackling this competition was believed to be a focus on schools and local clubs to ensure young people are brought into the game at an early age and maintain their interest, producing the next generation of Rugby League players and fans in the North West.

(vi) Stadium development As stated, new stadia and improved facilities are a key part of Super League strategy. There are a number of positive developments in the North West in this regard, with stadium development plans advanced beyond the planning permission stage. These should see some local Rugby League clubs in improved facilities: • Leigh Sports Village: this partnership between developers Greenbank,

Wigan MBC, and Wigan & Leigh College will see a £17.5m, 10,000 capacity sports stadium developed to be used by all the major sporting clubs in the town including Leigh Centurions Rugby League Club, Leigh RMI Football Club and Leigh Harriers Athletic Club.

• City of Salford Stadium: In November 2006, after a Public Enquiry, Salford City Reds were granted permission for a new 20,000 seat stadium at Barton.

That said, a number of clubs are still actively aiming for stadium redevelopment or relocation, but are not at such an advanced stage or have ‘stalled’ somewhat. These include St. Helens relocating from their Knowsley Road ground, and Whitehaven redeveloping their stadium.

(vi) Attracting and retaining major matches – including the Grand Final at Old

Trafford As stated, the North West regularly hosts a number of major Rugby League matches – both domestic and international. As shown earlier (see section 3) –



these events can have a positive economic impact on the North West economy. Strategically, it is important that the North West region puts as strong a case forward as possible to host desirable fixtures. Some of the leading events include the following: Super League Grand Final: The majority of consultees stated that retaining the Grand Final at Old Trafford should be a priority for the North West region. Old Trafford was widely supported as the suitable venue for the Grand Final and recognised as a positive event for the North West region and the game in general. However, retaining this event was identified as a potential - albeit presently low risk - challenge given Wembley’s re-opening and the Millennium Stadium’s continued interest in the game. Rugby League World Club Challenge: This is an annual match between the champions of Australia’s National Rugby League and England’s Super League. The past seven matches, since 2000, have been held in Britain, of which three have been staged in the North West (two at the Reebok Stadium, Bolton and one at the JJB Stadium, Wigan). The 2007 match is due to take place at Bolton. Strategically, it is important that the North West continues to retain its fair share of these matches, particularly as there have been calls from Australia to host the match there in alternate years. Challenge Cup final: The final of this competition has traditionally been held at Wembley Stadium. During Wembley’s recent redevelopment the match has variously been held at Murrayfield, Twickenham and the Millennium Stadium. It is anticipated that Wembley’s reconstruction will be completed in time to host the final there in 2007 and thereafter. There appears to be little chance of this event being relocated to the North West in the foreseeable future, and so it does not represent a realistic current opportunity for the region. Internationals / Tri-Nations / World Cup: The next Tri-Nations tournament in England is planned for 2009. In 2007 New Zealand will tour England to celebrate a century of Rugby League in New Zealand, while the Rugby League World Cup will be held in Australia in 2008. There have been discussions at the Rugby League International Federation that France could join the Tri-Nations competition for 2009. It is important that relevant stakeholders work together in helping put forward the case for holding major matches in North West stadia. Major international matches all have the potential to attract significant numbers from outside the region to high-profile matches – for example non North West resident GB / England fans, Australians / New Zealanders from other parts of the UK and visitors from France.

(vii) Regional geography - Cumbria

Our consultations indicated that regional geography is a major issue for the region’s Cumbrian Rugby League clubs. There are a number of challenges. For example, Cumbria is relatively sparsely populated and lacks major conurbations. Therefore, despite the popularity of the game in the region, there are barriers to its development and growing the fan base. Cumbria is also relatively remote from the rest of the North West region – and travel within the region is slower given the terrain. For example, Whitehaven is an hour away from the nearest motorway. This increases travel times and



costs for away fans visiting Cumbria – and for Cumbrian clubs travelling to away matches. Therefore, whilst there is potential for the game in this region, there are a number of intrinsic geographical and population constraints which will also impact on the game’s development in the region

5.4 Growth potential for Rugby League clubs in the North West In this section we comment on the key potential areas for growth for Rugby League in the North West, including some areas in which the NWDA can facilitate the development of Rugby League at a regional level.

We provide a summary in key areas:

• North West Rugby League ‘Plc’ – i.e. sport wide issues across the region;

• Club revenues;

• Facilities development; and

• Major events (i) North West Rugby League ‘Plc’

It is important that all Rugby League stakeholders work together in many of the areas listed below to enhance and protect the Rugby League industry in the North West. Moreover, in particular, clubs and other stakeholders may be able to work together to help build the game within the North West but outside its traditional heartland towns.

(ii) Club revenues

For elite clubs, growth is likely to be in terms of revenues. Here we provide a high level analysis of clubs’ key revenue areas and consider opportunities for developing them further. Figure 5.1 shows a breakdown of revenue for each of the five largest clubs.



Figure 5.1: Revenue breakdown for the big five NW Rugby League clubs, 2005

rive local fan base and attendances h attendance at matches. Figure 5.2 shows

Figure 5.2: Revenue breakdown for the big five NW Rugby League clubs, 2005

778378

1,3421,577 1,612

859

859

849843 826996

2,184

1,695

1,803

2,460

0

1000

2000

3000

4000

5000

6000

Widnes Vikings Salford Reds Warrington Wolves St Helens Wigan Warriors

Gate receipts Distributions Commercial and other

Note: Revenue breakdown for Widnes was unavailable

2,633

3,421

3,886

4,224

4,898

£'000s

Source: Deloitte, 2006 D

Gate receipts derive largely througthe average attendances at the big five clubs relative to capacity. All five clubs have significant excess capacity, therefore there remains scope for further expansion.

4,302 5,079

10,302 10,433

13,669

55%

73%

59%

38%

38%

0

5,000

10,000

15,000

20,000

25,000

30,000

Capacity Utilisation

Salford Reds Widnes St Helens Warrington Wolves Wigan Warriors

Average Attendance, 2004-2006


o drive attendances up clubs need to engage with lapsed and potential more

businesses.

2006


o drive attendances up clubs need to engage with lapsed and potential more

businesses.

TTsupporters and build stronger community links, either in general terms or specifically through closer integration with schools, local amateur clubs and supporters and build stronger community links, either in general terms or specifically through closer integration with schools, local amateur clubs and



Ticket pricing and strategy

Ticket pricing and strategy, and customer marketing are areas where clubs can be more sophisticated and share best practice

control

Visitinisiting fans from outside the North West region will bring increased economic

the area. It is worth exploring the potential to market the North West as

Attract increased local sponsorship opportunities / corporate links ey commercial contracts negotiated by the club include shirt and kit

mes – down

ld help in this area – as well as with corporate hospitality sales. A number of consultees stated that the

encourage best practice sharing and enchmarking across North West clubs in terms of successful partnerships with

acilitating links with key community partners A number of consultees felt that organisations, such as the NWDA, RFL and

them in building innovative links

in local

(iii)

eur clubs

There is potential for continued improvement of facilities at amateur clubs as ne the strength of the sport in terms of

potentially North West and innovations. Ticketing is the major revenue area clubs have mostover and the majority of additional income form increased ticket sales flows straight to the ‘bottom line’. An increase in attendance of 1,000 per game, assuming a notional average ticket price of £15 per game and 14 games perseason would increase revenue by around £200k per club net of VAT. g fans Vvalue toan attractive visitor destination to visiting fans – particularly those from key clubs outside the North West – in a similar way as would be appropriate for major Rugby League events (see below).

Ksponsorships, but also other sponsorship and partnership programto pitch side or other stadium advertising opportunities.

Improving links between clubs and local businesses cou

NWDA could provide assistance in helping their club build links with regional businesses (and potential sponsors) and introduce them to any conference or match day hospitality available at their local Rugby League club. Although theNWDA and stakeholders are unable to directly assist the clubs in forming partnerships with companies, by developing the clubs to improve their overall “offer” to companies, could lead to closer links and potential sponsorship opportunities for North West clubs. Equally, there is again opportunity toblocal business and marketing to the corporate sector. A club best practice forum where clubs can they learn from each other may be useful.

F

Sport England, local authorities could assistwith key public sector organisations that could provide links to the local community and potential additional revenues. This was particularly pertinent the context of utilising the club’s facilities and building links with schools,community groups and promoting participation in the game at all ages.

Facilities development

Development at grassroots / amat

these facilities ultimately help to determiparticipation and grassroots. The RFL and Sport England will continue to provide the lead in this regard and it is important that they continue to work withamateur clubs to help develop high quality funding applications (e.g. for Community Club Development Programmes).



pment at Professional clubs DeveloThe continued demand for alternative funding strategies for upgrading or

ntified as an area for support for North West e es

shows that professional clubs – not only in Rugby League – which have been successful in relocating or redeveloping their stadia have

ft’ f

e

’ relocation to a new stadium – following a successful planning process and Public Enquiry – is a key example of the importance of

ced

lanned

(iv)

As a leading host region for top Rugby league events, the first priority for takeholders in the region is to protect existing major events in

sions on host locations / staging agreements for major Rugby League events are

leveraging matches, once secured, there is continued potential to market North West locations as attractive visitor destinations to visiting fans –

redeveloping facilities was ideclubs. For example, could clubs utilise any untapped funding sources for thesfacility improvements. Equally, clubs may benefit from networking opportunitiand PR assistance regarding the positive economic impact of stadium development.

Recent history

often benefited from some form of public sector assistance, whether it be ‘sofunding in terms of free or reduced cost land or more direct capital funding ofacilities – often to then be leased to the club as a tenant. There does appear tobe a trend towards public sector agencies realising the value of an iconic stadium to a local area, in terms of effective land use and regeneration – particularly if the design incorporates facilities for the use and benefit of thlocal community.

Salford City Reds

facilities to the development of clubs. The new stadium will provide enhanrevenue generating abilities for the club and, of course, a considerable economic impact to the region in terms of capital expenditure related to the construction of the stadium and associated developments such as the p210 bed hotel, exhibition centre and retail park.

Major events

Rugby League’s sNorth West – e.g. Grand Final, World Club Challenge & Internationals.

Showing strong public sector backing for North West venues when deci

being negotiated is important when seeking to retain and attract major matches.

In terms of

to increase the average length of stay and therefore spend of visitors.



5.5 Summary As a summary figure 5.3 highlights the key elements to consider in terms of future economic development of Rugby League in the North West.

Figure 5.3: North West Rugby League Growth Potential

Stage 1: Data collection & consultation




West




industry.





RLNW ‘Plc’

FACILITIES

MAJOR EVENTS

Build game in NW outside current heartlands

Local fanbase and attendance

Visitors

Sponsors and corporate links

Best practice sharing and benchmarking

Building links with community partners

Amateur clubs

Professional clubs

Protect existing events

Secure fair share of events

Visitor destination marketing

Engage lapsed and potential fans

Community club links

Target away fans

Market the region as a destination

Links between clubs and local businesses

Improve funding applications

Develop funding strategies

Assistance/partner with public sector

Public sector backing for North West venues

CLUBS





West




industry.





RLNW ‘Plc’

FACILITIES

MAJOR EVENTS



Visitors




Amateur clubs

Professional clubs






Target away fans







CLUBS





West




industry.





RLNW ‘Plc’

FACILITIES

MAJOR EVENTS



Visitors




Amateur clubs

Professional clubs






Target away fans







CLUBS



Annex 1 – Detail Methodology for EIA of Rugby League in the North West Figure A1.1: Deloitte’s approach to calculating economic impact





West





industry.










West





industry.










West





industry.










West





industry.







(i) Stage 1: Data collection and consultation During this stage, Deloitte met with the Club Accountant at the RFL to gather all

available account information from the North West’s current four Super League and 10 National League clubs. In addition, face-to-face consultation meetings were held with senior management at Salford City Reds, St.Helens, Warrington Wolves, Wigan Warriors and Whitehaven RLFC.

During this process Deloitte collated information including:

• Detailed breakdowns of the latest available Profit & Loss account data; and

• Number of Employees (split between players and non-playing staff); and

• Average attendance data. (ii) Stage 2: Estimating the direct impact

Using the data collated from the consultation process, Deloitte were able to calculate the direct value of Rugby League to the North West. The direct impact of Rugby League on the North West economy consists of all economic activity that can be directly attributable to Rugby League. This can include: total turnover; GVA; or employment. As highlighted above, GVA is the sum of overall net profit of all Rugby League entities plus Rugby League’s overall expenditure on salaries. The expenditure data was then translated into the relevant industry category to be used in the input-output model.

(iii) Stage 3: Input-Output modelling

The input-output methodology recreates the local economy in terms of:

• who might be expected to buy what from whom;

• who might be expected to pay whom for their work; and

• what is likely to leak outside the region because the necessary local suppliers are not available.



A key feature of the model is its round effects. This means that for every pound spent in the North West region some proportion of it will go towards purchasing inputs from suppliers, some will go into people’s pockets and some will leave the region.

Of the proportion that remains in the region those suppliers who benefited from the initial spending will themselves have to source further inputs locally. Equally the people with additional money to spend will spend some of it on goods and services produced in the region. This process carries on until the effects have filtered out of the system, and are known as multiplier effects.

Table A1.1, below, indicates the three types of multiplier arising from the initial direct impact. The results from the model are given in expenditure terms (consistent with the inputs) but can be related to Value Added by using UK industry average expenditure to GVA ratios (accounting for profitability and employee compensation).

Table A1.1: Three types of multiplier

DIRECT IMPACT This is the additional expenditure in the North West region calculated from data collection. TYPE I MULTIPLIERS (INDIRECT EFFECTS) – Business to Business These give the total additional expenditure caused by businesses’ sources from further down the supply chain. TYPE II MULTIPLIERS (INDUCED EFFECTS) – Including consumer spending effects These give the total effects of the initial impact and by subtracting the type I effect it is possible to isolate the associated consumer spending effects. TYPE III MULTIPLIERS – Synergistic effects These are multipliers that arise as a result of a change in the underlying structure of the area, for example a new firm choosing to locate in the North West region because of Rugby League or additional future tourist activity that is generated by Super League Grand Final-related publicity. Unfortunately, this multiplier cannot be modelled.




Annex 2 – Detail Methodology for EIA for SLGF 2006 Figure A2.1: Deloitte’s approach to calculating economic impact

Stage 1: SurveyingCollation of

SLGF expenditure data using

primary survey techniques


survey data into estimated total

direct expenditure, by industry as

result of the SLGF





Source: Deloitte, 2006 (i) Stage 1: Surveying

This stage involved undertaking primary research with visitors at the Super League Grand Final, particularly related to expenditure levels. Respondents were asked questions covering a number of important areas including the respondent’s:

• Normal home location;

• Length of stay;

• Total expenditure; and

• The number of people this expenditure covers.

(a) Normal home location Respondents were asked where they normally live. This is crucial to establishing the additionality. It is necessary to isolate the impact of respondents from outside the region under investigation. (b) Length of stay Respondents were also asked how long (i.e. number of days) they are due to visit the region in question. This information enables a spend-per-day ratio to be established. (c) Total expenditure Respondents were also asked to estimate their total expenditure across a number of categories, specifically:

• Serviced accommodation;

• Non-serviced accommodation;

• Meals and drinks (served);

• Groceries - food and drink - (bought);

• Transport and Travel (within the sub-region);

• Transport and Travel (outside the sub-region);

• Retail shopping; and

Admission, entry fees and other leisure spendin• g.





(d) The number of people this expenditure covers Finally, respondents were asked to indicate how many people this spending covers. The mean result from this question informs the spend-per-head calculation as the sample size can be adjusted to accurately reflect the number of people the recorded expenditure covers.

(ii) Stage 2: Estimating the direct impact

Using the initial survey outputs, Deloitte are able to calculate the initial impact of the SLGF. The direct, or initial, impact of the SLGF consists of all expenditure made in the Greater Manchester and North West region, that would not have occurred in the absence of the SLGF. In order to calculate this direct impact, any expenditure by people residing in the Greater Manchester or North West region, or who otherwise would have been in the North West region regardless of the SLGF is omitted. This is because the vast majority of their expenditure would have occurred within the North West region regardless. This point is evidenced by Figure A2.2, below, which demonstrates the additionality direction of SLGF spectator expenditure.

Figure A2.2: Direction of spectator additionality expenditure (Greater Manchester, elsewhere in the North West and lives outside North West)

Case 1 - Lives in Greater Manchester Case 2 - Lives elswehere in North West

Case 3 - Lives outside North West Expenditure Flow Key

Additional

Non-additional

North West

External

GM

North West

External

GM

North West

External

GM


The expenditure data was then translated into the industry categories necessary to run the input-output model.



(iii) Stage 3: Input-Output modelling The input-output methodology recreates the local economy in terms of:

• who might be expected to buy what from whom;

• who might be expected to pay whom for their work; and

• what is likely to leak outside the region because the necessary local suppliers are not available.

A key feature of the model is its round effects. This means that for every pound spent in the North West region some proportion of it will go towards purchasing inputs from suppliers, some will go into people’s pockets and some will leave the region.

Of the proportion that remains in the region those suppliers who benefited from the initial spending will themselves have to source further inputs locally. Equally the people with additional money to spend will spend some of it on goods and services produced in the region. This process carries on until the effects have filtered out of the system, and are known as multiplier effects.

Table A2.1, below, indicates the three types of multiplier arising from the initial direct impact. The results from the model are given in expenditure terms (consistent with the inputs) but can be related to Value Added by using UK industry average expenditure to GVA ratios (accounting for profitability and employee compensation).

Table A2.1: Three types of multiplier

DIRECT IMPACT This is the additional expenditure in the Greater Manchester area and North West regions calculated from survey results. TYPE I MULTIPLIERS (INDIRECT EFFECTS) – Business to Business These give the total additional expenditure caused by businesses sources from further down the supply chain. TYPE II MULTIPLIERS (INDUCED EFFECTS) – Including consumer spending effects These give the total effects of the initial impact and by subtracting the type I effect it is possible to isolate the associated consumer spending effects. TYPE III MULTIPLIERS – Synergistic effects These are multipliers that arise as a result of a change in the underlying structure of the area, for example a new firm choosing to locate in either the Greater Manchester area or North West region because of the SLGF or additional future tourist activity that is generated by SLGF-related publicity. Unfortunately this multiplier cannot be modelled.


The model framework allows data to be entered for Greater Manchester as well as the North West region, which means that it is able to approximate the spill-over effects of the SLGF on the rest of the North West by subtracting Greater Manchester results from the North West regional results.



Annex 3 – Consultee List Contact Role Organisation North West Super League Clubs Sean McGuire Chief Executive St.Helens David M. Tarry Chief Executive Salford City Reds Paul Snape Financial Director Salford City Reds Andrew Gatcliffe Chief Executive Warrington Wolves Dave Hutchinson Commercial Director Warrington Wolves Darren Sherrat Assistant Finance Director Warrington Wolves

Neil Kelly Warrington Wolves Foundation Warrington Wolves

Carol Banks Chief Executive Wigan Warriors National League Division 1 Bill Robson* Commercial Manager Whitehaven RLFC Sky Sports Vic Wakeling Managing Director Sky BBC Roger Mosey Director of Sport BBC Rugby Football League

Richard Lewis Executive Chairman Rugby Football League Grand Final contact Sally Bolton Sports Consultant N/A Old Trafford contact Ken Ramsden Assistant Secretary Manchester United FC Trafford Council

Gary Pickering** Deputy Chief Executive Trafford Council Marketing Manchester

Paul Simpson Deputy Chief Executive and Finance Director Marketing Manchester

William Hill Gary Kane North West contact William Hill


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