The economic and financial effects of the introduction of Super League in Rugby League
The purpose of this research is to examine the effect of a unique experiment by the Rugby Football League, to apply the American professional team sports model to its game, making it the first British sport ever to attempt this. It investigates the economic, financial and social changes, which have occurred within the sport of rugby league, since the introduction of the 'Super League'. The adoption of the American professional team sports model is based on increasing the uncertainty of outcome of games in order to ensure profit maximisation of the clubs. This has raised a number of issues, pertaining to both the game of rugby league itself, the difference between American and British sport, and the ever increasing effect of television revenues and mass media on sport. The adaptation of the model by rugby league officials has resulted in decisive changes to the way the game is played and how the Rugby Football League is run. A change to three divisions from two, the introduction of a 'Super League' copying football's Premiership and a switch from the traditional winter game to a summer season has taken place. Also critical has been the move from terrestrial to satellite television and the effect of this move on network externalities that could influence the long-term future of the game. The £87million financial investment from Rupert Murdoch's News Corporation provided the catalyst for change, in exchange for the five-year exclusive broadcasting rights to the game. The American model was utilised in order to try and financially stabilise the league through the process of profit maximisation. The need for equilibrium within the league also led to the utilisation of various restrictive controls, all of which are common-place in the United States. After critically evaluating the relevant literature, attention is turned to testing the effect of the experiment of applying the American model to British Rugby League. A five-strand approach has been adopted using data both pre and post, the introduction of Super League, utilising nine, case study-clubs throughout the study. Firstly, any change in uncertainty of outcome was examined using the standard deviation of Win/Loss percentage adapted from the approach by Noll (1988) and Scully (1989). Demand for the live matches through attendance figures and broadcasting demand, using audience viewing data were examined. The third strand examines whether the predicted outcome of the American model, and increases in revenue and profit, have been achieved. Finally, two social surveys were carried out on three major stakeholder groups, club officials, players and supporters. The results indicate that the application of the American Professional Team Sports model to rugby league did not achieve the predicted outcome of increased uncertainty, attendance and ultimately, revenue. The reasons for this can be explained by the partial implementations of the model and non-market factors, which appear to be much more significant within British Rugby League than in American sports. The over-riding results suggest that regardless of structural or organisational changes, rugby league is destined to remain a northern minority sport.