Campus

Case Method

Case Library

RUGBY CLUB TOULONNAIS 2014

#Rugby #France #Sport #industry


Abstract

After almost a century in the Elite, the Rugby Club Toulonnais was relegated in second division, due to a deficit of over €1.5 million in June 2000. Despite an improving financial health, its mediocre sport results did not allow the team to return to the then-Top 16 until 2005 (however, only for one season). In 2006, a local businessman, who made his fortune publishing comic books, decided to diversify his portfolio and acquire, along with his childhood friend, the majority in RCT’s stake. In only eight years and €7 million invested from his own pocket, Mourad Boudjellal succeeded in raising the Rugby Club Toulonnais a top European team. Indeed, since the professionalization of the sport in 1998 and the hosting of the World Cup in 2007, the French rugby industry went through significant changes. Long considered a sport with small audiences and with a very strong regional dimension (overrepresentation of clubs in almost rural towns of Southwestern France, a few in big agglomerations), it became, after a decade of struggle, a national phenomenon, attracting businessmen from all over the country and the best players from both hemispheres. However, with this new trend, clubs established in not-so-dynamic areas were penalized. Given the increasing attractiveness of the French Championship, more investments were needed to fund the renovation of infrastructures and shape talent. With their weaker economic fabric and a progressive withdrawal of local governments (on the verge of bankruptcy, not able to sustain ambitions of international reach), teams from the historic cradle of rugby went on accumulating deficits (where elsewhere, those were covered by shareholders). In order to address this problem and make the game more fair, the Professional Rugby League decided to become stricter and adopt new rules toward a « financial fair play ». This new set of measures should help preserve the value and ethics in the sport, refrain wealthy donors to endlessly finance their team’s deficit and focus on structural reforms and, last but not least, push clubs to rethink their business model around what makes them unique. On this last point, the Rugby Club Toulonnais can be considered as something of a role model and as an example to follow in all professional leagues.

Detailed information

Case ID 14-1063
Published 2014
Industry PERFOMANCES (EXCEPT OTHERWISE CLAASIFIED), THEATRICAL COMRANIES
Analyzed Area General management
Pages 21
Language English
Teaching Note Attached