Rugby Australia shines a light on Brumbies future

Rugby Australia has revealed what the future holds for ACT Brumbies, after questions were raised of the club’s role in the Super Rugby following Melbourne Rebels going into admissinstation.

The Brumbies played against the Melbourne Rebels at AAMI Park in Melbourne on Friday night in the opening round of the Super Rugby season. There have been questions raised about the future of both clubs in the competition after the REbels went into voluntary administration. Picture: Daniel Pockett/Getty Images

The ACT Brumbies have been guaranteed a place in Super Rugby next year despite concerns about the club’s finances.

Rugby Australia chair Dan Herbert, who insiders say has been under pressure to stand up for the code, said the Brumbies would be supported.

When asked if they would 100 per cent be on the park next season, Herbert said: “We’re committed to them, they are our most successful team and we believe they have a part to play as part of our alignment of high performance.

“They have done things better than a lot of clubs. If you look at the history of Super Rugby every club has at one point had its challenges.”

Brumbies' Noah Lolesio (R) is tackled by the Rebels' David Feliuai (L) during the Super Rugby match between the Melbourne Rebels and the ACT Brumbies on February 23, 2024. Picture: AFP

The questions on the Brumbies future come after the Melbourne Rebels went into voluntary administration in January, with more than $22 million of debt.

There have been claims that Rugby Australia would cut two sides from the Super Rugby competition next year to save money, with Melbourne and the Brumbies the most vulnerable.

The Brumbies released a financial report in November 2022, which showed a $1.3 million loss, but have not released the latest figures, which were expected to be bathed in red ink.

Club membership had already been in freefall, with revenue in 2022 from members coming in at $738,000 compared with $1.8 million in 2013.

ACT Brumbies chair Matt Nobbs was contacted to ask when the club would make last season’s figures public but did not respond.

Rugby Australia CEO Phil Waugh. (Photo by Dave Rowland/Getty Images for Rugby Australia)

Rugby Australia chief executive Phil Waugh has flown to Dublin and London, along with chief financial officer Richard Gardham to meet with World Rugby and British and Irish Lions officials this week.

It is believed they were seeking additional funding for the code, which has an $80 million loan with Pacific Equity Partners.

The private funding deal has been underwritten with the Wallabies brand, which has been conservatively valued at $100m.

Rugby Australia has been pinning its financial hopes on a British and Irish Lions Tour next year and the 2027 World Cup, which will be held in Australia.

Herbert said Rugby Australia was being sensible with the PEP’s funds.

“We’ve still got some headroom on that, you’ve got to be careful and we have been putting some discipline around that,” he said.

“The game can’t afford itself at the moment. After the men’s World Cup we want to put some money aside to safeguard the game.”

Rugby Australia’s $29 million broadcast deal with Stan Sport and Nine runs until the end of next season. No talks have begun on a renewal because scheduling has not been finalised.

Rugby Australia chair Daniel Herbert. Picture: Getty Images

All Super Rugby matches will be played at AAMI Park in Melbourne this week, with three double headers scheduled for Friday, Saturday and Sunday.

The Victorian Government, which was owed at least $2 million by the Melbourne Rebels, has been in talks with Rugby Australia.

However, no plans were locked in for Herbert or Phil Waugh to meet with Sports Minister Steve Dimopoulos this weekend.

Any deal to hand over cash to Rugby Australia was likely to be complicated, with funding likely tied to whether the MCG hosts the World Cup finals in 2027.

Rugby Australia also does control the decision on the World Cup finals, with World Rugby making the calls.

The office of Mr Dimopoulos said: “The Melbourne Rebels are a member of Victoria’s strong sporting landscape which helps pack our calendar with professional sport fixtures and major events, providing lasting benefits for the state’s visitor economy.”

“The Government is aware the Melbourne Rebels are working closely with Rugby Australia following the club entering into voluntary administration.”

Pacific Equity Partners declined to comment.

RUGBY AUSTRALIA DEFENDS THE ACT BRUMBIES

Rugby Australia last week defended the ACT Brumbies, saying the club has been keeping the governing body “informed of their potential challenges”.

The governing body has rejected reports that the club was almost certain to be out of the Super Rugby competition next year to help Rugby Australia manage its $80 million debt.

Rugby Australia chair Daniel Herbert said the Brumbies were “our most successful team”.

Mr Herbert said the club “will play a vital part in the advancement of our aligned High-Performance system to ensure improved performances of our Super Rugby clubs and our national teams.”

“They have kept us well-informed of their potential challenges, and their plans to overcome these challenges – and we will continue to engage with them, and support them,” he said.

The Brumbies have yet to release their 2023 financial reports on their website.

This masthead reported the future of the ACT Brumbies beyond this season is in doubt as Rugby Australia.

The Brumbies face off against the Melbourne Rebels at AAMI Park in Melbourne on Friday night in the opening round of the Super Rugby season.

Both sides are almost certain not to be in the elite competition next year.

Rebels captain Rob Leota. (Photo by Daniel Pockett/Getty Images)

Rugby Australia has made six staff redundant this week as it runs down its $80 million loan from Pacific Equity Partners, which will be offset by a British and Irish Lions tour next year.

Government relations staffer Anthony French, who was behind the bid to get the World Cup to Australia in 2027, left to start his own business.

The Brumbies have denied reports of financial problems, but it’s understood Rugby Australia cannot afford to support five Super Rugby teams next year.

The Melbourne Rebels have already gone broke but were given a lifeline by the governing body to stay on the park this season.

Insiders claim that both teams will be on the chopping block for 2025, with extra rounds added to make up the required games for broadcast commitments with Nine and Stan.

Rugby Australia chief executive Phil Waugh has been in crisis talks with the Victorian Government to keep the Rebels alive this year.

A deal was done to keep Friday’s match in play, with the Victorian Government guaranteeing caterers’ costs for the match.

Mr Waugh said the league was now considering its ongoing future.

“We are doing our due diligence to analyse what the most ­appropriate number of Australian teams is – which covers both commercial viability and RA’s aspiration to have winning teams in gold,” Waugh told The Australian.

Brumbies' Ollie Sapsford tackles Hurricanes' Brett Cameron during the Super Rugby quarter-final match last year.

The Melbourne Rebels board won an 11th hour reprieve in the Federal Court this week to stop the club going into liquidation.

They agreed to pay $100,000 to pay administrators at PwC to continue their work.

They now have 60 days to come up with a deal to pay off the club’s $22 million debt.

The next creditors meeting must be held by April 26, where it is likely Rugby Australia and the Australian Taxation Office, which was owed $11.6 million, will vote to liquidate the club.

Any deal would be complicated as the Rebels no longer own the club’s licence, with Rugby Australia taking over payment of the players this season.

That means a move to get the Rebels back at AAMI Park next year would happen under a new corporate entity.

It was unlikely any previous Rebels’ board members would be part of any new club.

The Melbourne Rebels recruited heavily this season, signing star Taniela Tupou for $500,000.

He also receives payment for playing with the Wallabies.

However, he has been fielding offers of more than $1.5 million to play overseas.

The Victorian Government has been supportive of the Rebels but there was no immediate deal on the table to bail out the club.

Brumbies chair Matt Nobbs did not return calls.

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Originally published as Rugby Australia shines a light on Brumbies future