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It’s an untested hypothesis, given that no host of the Rugby World Cup has ever been knocked out of its own tournament in the first round. But according to the London Business School, should England succumb to the unthinkable, but eminently foreseeable, and lose to Australia at Twickenham, the cost to the UK’s biggest companies could be £3bn.
According to Professor Alex Edmans, who has studied the impact on the stock market of elimination from major sporting tournaments: “A lost competition can have a profoundly negative effect on investor mood.” His research is chiefly based on football, the rather greater national obsession, and is also based on the observation of similar trends in England, France, Germany, Italy, Spain, Argentina and Brazil.
“A rugby loss leads to a next-day decline of 0.15 per cent, which is roughly £3bn when applied to the UK stock market,” he said.
No other host nation has ever come close to falling at the first hurdle. But no other host nation has ever had to contend with being placed in a group with two other world leading rugby nations - in this case Wales and Australia - from which only two can emerge.
But the real risk of England’s early exit has at least been known about for three years. If England lose, the economic boost that should come with hosting the tournament will not all be lost. While the tournament’s sponsors, particularly the likes of o2, who have invested heavily in their relationship specifically with the England team, have known the risks for some time.
The biggest losers are likely to be host broadcaster ITV, who paid £60m in 2010 for rights to broadcast the tournament - before the announcement of England’s group of death. With England out the tournament, the value of its advertising slots could plummet by more than £1m per match. England’s match with Wales last weekend drew a peak audience of around 13 million.
“They want England to be in it for a long time, for there to be a lot of mainstream coverage and for people to tune in,” said Phil Hall, head of Mediacom, the UK’s largest rights agency.“ It could be a disaster for ITV.” Losses to pubs, restaurants and shops will also run in to tens of millions but the market is surprisingly resilient. According to a panel of sports marketing experts, on leading sports business website unofficialpartner.co.uk, the rugby fan market is more secure. “For a rugby fan, the game is bigger than any team,” said Jim Dowling, managing director of Havas Sports & Entertainment. “Defeat or elimination doesn’t preclude a period of mourning.” In the last three competitions, the host team reached either the semi-final or final, or won the tournament.
A spokeswoman for organiser England 2015 said: “This is a record breaking tournament in terms of tickets sold, and our venues have been packed up and down the country supporting all 20 competing nations.
“Whatever permutations the group stage offers, we have sold nearly all the tickets for the knock out stages.”
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