USA Rugby won its first championship title in March of this year. William Tatham Jr. hopes to turn the sport into the next big thing. Photo by Mike Lee KLC Fotos.
Written by Edward Smith
As the World Cup recently concluded without an appearance from the United States, another global sport waits on the sidelines to make its appearance on the home stage as a local entrepreneur tries to make rugby sevens the “sport of the 21st century.”
William Tatham, Jr., president and CEO of Grand Prix Network, LLC, and son of the owner of Copper River Country Club, purchased exclusive sanctioning rights that effectively allow him to professionalize the HSBC Sevens Tour, the biggest rugby tournament in the world. He expanded and extended those rights in 2016 when the sport made its debut in the summer Olympics.
Unlike rugby 15s, each team only has seven players on the field—called a pitch. The game is played in two seven-minute halves. While the rules do not differ much from conventional rugby, having only half the people on the pitch and the same amount of space means a much more high-speed game with continuous flow.
“It’s just option football,” said Tatham. “The quarterback goes out, is about to get tackled and pitches the football. That’s rugby.”
What Tatham found out after discovering rugby sevens more than a decade ago was that the sport fit his “smart-start” business model — creating a sport that avoids the high cost of franchising and player’s salaries, has a short, intense game play, can be watched on a cell phone and that can be bet on like racing. And now, Grand Prix Rugby, Inc. is offering investment opportunities into the tournament and franchises for the company’s premier tournaments in 2019.
Funding the five 24-team, three-day tournaments with a $1 million prize is coming by way of an online public offering. Gran Prix is selling around 20,000 preferred shares in the first round, roughly the amount of seating in the recently completed Banc of California Stadium in Los Angeles where the tournament is slated to be played. Those shares come with accompanying tickets and will be open to the public around the time of the Rugby World Cup Sevens tournament in San Francisco July 20-22.
“The advantage is getting hardworking guys buying tickets and launching your league. If I can sell the tickets in advance, I’m fully funded,” said Tatham,
Selling the stock with accompanying tickets means the company can bypass Ticketmaster and can fund its competition earlier. The stock number will even correlate with the seat number investors pick.
The first round of stocks is being billed as the “Los Angeles Round.” There, the standard tier is the $500 founding member preferred share that comes with a ball, a jersey, a shield with the stock number printed on the inside and two tickets for three days of gameplay that normally sell for $256. Investors also get voting rights and a 10 percent annual dividend, non-compounding.
At that game will be at least 19 of the world’s teams, the USA Rugby team and the appearance of the country’s first regional teams, should everything go as planned. Those teams will compete for the $1 million prize. At the fifth game, the championship, the prize money will double, creating the biggest purse for which rugby players have ever competed. Every year after that, the prize money doubles.
Beyond preferred shares, four franchises are being created for the Los Angeles, New York, Chicago and Dallas regions.
For $2.5 million, Tatham says a team can be created and play alongside USA Rugby and the rest of the world. Teams will share revenue and will be built over a 4-week rugby camp that will put rugby players and football players together that owners will build to appear in the 2019 games.
That camp will have 240 athletes — 40 of the best rugby players and 200 football players from Division One teams who just didn’t make the National Football League cut.
The advantage of having football players is that football players are trained to break two or three tackles, Tatham said. And with only seven opponents, that pretty much means a scoring run.
“Football players are instinctively trained to block and tackle,” said Tatham. “They’re going to think we’re barbarians.”
Tatham puts the estimate at running the tournament at $5 million each for the first year. “If we do a million dollars in prize money, we can break even. We don’t have any other costs,” he said.
The biggest cost for running a league is managing teams, and the only teams he has to pay for are the four regional teams if those are sold in the first year. Even then, the number of players required to run those four teams is about the same as the entire lineup and bench of the Oakland Raiders.
Through the sanctioning rights that Gran Prix Rugby bought through USA Rugby, Tatham gets access to all of the teams around the world. Teams like those from New Zealand, Argentina and South Africa all came to play in Las Vegas in March of this year, where it was USA Rugby who came out the victor. And the chance to play for prize winnings only makes them want to play more, he said.
“Opening the door to the world’s teams and closing the door to competition,” as Tatham said, means cutting back on potentially $72 million of cost, according to his calculations.
Sports leagues have revenue streams outside of just ticket sales, according to Courtney Brunious, associate director of the USC Marshall Sports Business Institute. Media and broadcasters represent a large portion of funding, and emerging sports are taking advantage of online platforms outside the networks.
“That’s an option you’re seeing a lot of startups doing,” Brunious said. “It’s lowered the barrier for a lot of leagues.”
One of the biggest emerging leagues is esports, where multiplayer video gaming competitions like Starcraft or Counterstrike are broadcast. In certain parts of the world, it has become more popular than traditional sports, said Brunious.
“You’re seeing a shift in how people are watching sports,” said Brunious.
As Grand Prix is currently in negotiations with Fox and the NFL Network to broadcast the sport, that means if the deal goes through, it could easily be watched on a smart phone.
The other advantage the sport has is its length. More and more, leagues are looking to capitalize on what Brunious calls “snackable content.”
“There is an interest in the digital era to look at something you can watch in a short time frame,” Brunious said.
Even the National Basketball Association was tossing around the idea of broadcasting the final five minutes of games, according to Brunious, and a 15-minute structure may be able to keep audiences interests piqued.
And as ratings for the World Cup in the United States have dipped due to America’s absence in the games, it will have to be fan interest that sells the world’s other athletic import—rugby.