Western Force axed for code’s survival, ARU says

THE ARU’s dire financial situation has been laid bare, with the game facing a potential $26 million black hole within two years if they continued with five Super Rugby teams.

Western Force players during the season.

THE ARU says it faced a potential $26 million black hole and insolvency within two years if they continued with five Super Rugby teams.

The governing body released financial modelling compiled by their former chief financial officer Todd Day on their dire situation after the Western Force were officially cut from Super Rugby 2018 and beyond after losing an appeal in the Supreme Court of NSW.

So startling is the ARU’s financial situation, they say they would have been forced to go into receivership by the end of 2019 had they persisted with five franchises.

Andrew Forrest is flanked by Western Force players after the court rejected their appeal.

They dismissed the offer of billionaire Force backer Andrew Forrest’s $50 million rescue package because it was “not specific”, and because SANZAAR rejected a 16-team model.

By the time Forrest’s offer was made, the Melbourne Rebels had swiftly transferred their private ownership to the Victorian Rugby Union, ensuring the ARU could not axe them, leaving the Force as their only option.

The alarming projected numbers were released on Tuesday night by the ARU, who up to now have sat on the information for fear they would prejudice the legal case against them by WA Rugby in arbitration and in the Supreme Court.

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After Justice David Hammerschlag dismissed WA Rugby’s appeal, the ARU said they had no choice but to axe the Force.

“Financial modelling undertaken during the assessment phase around the retention of five teams through to 2020 forecasted ARU being unable to meet its liabilities by Q3 2019, with an overall $13m (best-case)- $26m (worst-case) financial hole by Q4 2020,” the ARU said in a public statement titled Supporting Documentation - The Future Of Super Rugby.

“In simple terms, ARU would be unable to continue trading beyond 2019 were it to continue to fund five Super Rugby teams through to 2020.

“The reduction of a Super Rugby team provides an annual saving of $6m from 2018-2020 which would enable ARU to continue trading and to direct a significant portion of the savings for investment into community rugby, player and coach development initiatives and women’s programs.”

But the ARU board and executive must also shoulder blame for allowing this to happen, largely by agreeing in 2015 to expand the competition to 18 teams because of political lobbying from South Africa.

There is no chance the ARU will allow Force stars to join the rebel league proposed by Forrest, and it’s time for the players to put loyalty for themselves and their families over loyalty to the club.

The players have endured enough uncertainty, and while nobody wants to be the first to jump ship, the stark reality of the Force’s elimination from Super Rugby will be laid bare when the 2018 competition draw is released in a fortnight.

An emotional Matt Hodgson.

Under the letter of the law, all Force staff including players and coaches are employees of the ARU given it took over operations of the franchise last year.

The ARU has yet to state a public position on Forrest’s proposed rebel league, but realistically no business would allow a competitor simply hire contracted staff.

The sad reality for players and coaches, should they choose to follow Forrest, would be immediate termination of contracts without a payout, and a ban from being eligible to play for the Wallabies.

ARU chairman Cameron Clyne questioned why Forrest had not stepped forward last year when the Force were on the brink of financial collapse.

“Obviously we stepped in there and bailed them out 18 months, two years ago because no one else came forward.” Clyne said.

The ARU then asked the Force for their best and final offer on August 2 when deciding whether to cut the Perth or Melbourne team.

“At that point in time, it was an inferior package to what Victoria put through and we had to make a decision, so we made that decision (to cut the Force),” Clyne said.

With no Force in the tournament, Japan’s Sunwolves will join the Australian conference.

The competition will revert back to the successful home-and-away derbies against all rival teams in local conferences, and playing four out of five teams in each of the other two conferences.

RUPA boss Ross Xenos pointed out after the announcement that there will now be “more Australian players contracted overseas than what we will have in a four-team environment in Super Rugby, so clearly there is a significant strategic issue for Australian rugby to address in terms of what we’re doing around the retention of our best players”.

* To read the ARU’s full statement, log on to: http://www.aru.com.au/portals/1/SUPPORTING-DOCUMENTATION-THE-FUTURE-OF-SUPER-RUGBY.pdf

Originally published as Western Force axed for code’s survival, ARU says