More heads set to roll as World Rugby currently holds Rugby Australia’s future in its hands
World Rugby currently holds RA’s future in its hands. A $9.5m cash advance won’t be received unless four strict conditions are met, which means more brutal cost cutting is unavoidable.
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No one is safe.
While Rugby Australia saved $5.5 million in wages on Monday by sacking 40 per cent of their staff it’s no secret the bloodletting will continue in what they are calling “phase two”.
Over the coming months senior rugby personnel could be shown the door as the organisation battles to meet World Rugby’s demands.
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Brutal cost cutting is unavoidable because while Rugby Australia has received $4.7m of their World Rugby cash advance, the remaining $9.5m won’t be received unless four strict conditions are met.
On page 19 of the annual report obtained by News Corp Australia, there are a set of extraordinary conditions attached to the remaining money World Rugby will hand out.
RA must exhaust all reasonable cost saving opportunities, including salaries, and must exhaust all other sources of funding including cash reserves, government handouts and other loan facilities.
RA must also “demonstrate good financial stewardship and provide robust supporting data” and continue to provide World Rugby with updates.
To put it simply, World Rugby currently holds RA’s future in its hands.
The $14.2m bailout is on the strictest terms and is an advance of the expected $19m that Australia is due to receive in the 2023 World Cup year.
The high performance unit is one high cost centre that is facing budget cuts. Last year there was $9.2m spent on “high performance and teams” as well as a $9.6m on “Wallabies teams costs”.
Incoming Wallabies coach Dave Rennie is reportedly on $1m. Rugby Australia’s coaching director Scott Johnson is understood to be on close to $700,000. The Gold Coast-based coaching director, who flies in and out to RA’s Sydney base, was recruited by then chief executive Raelene Castle in late 2018.
News Corp Australia can reveal RA paid out his Scottish Rugby Union contract to the tune of $200,000. As rugby in this country burns, such spending is a thing of the past.
As for Super Rugby? The competition as we know it is all but done but what the competition will look like beyond this year is not confirmed.
Some of the best Australian players are looking to break their contracts as it is all but inevitable their salaries will drop.
The national Sevens program is in the gun — last year $5.3m was spent on it — and there are whispers that will suffer and have to survive on meagre funding in the future.
While there were 200 staff on the books at RA last year, there is talk by the end of 2020 there could be as little as a half left in the front office. This is rugby’s new economic reality as the sport faces a ruthless reset.
RA, which has managed to blow $500m over the past four years and has nothing to show for itself, is in for a period of radical transformation.
Back in 2016 when Pulver inked the $285m broadcast deal he promised the “growth of a future fund to $10m” by 2020. If Pulver’s strategic plan had come to fruition the Wallabies would be No 1 in the world — a mere fantasy now.
In November, when Castle, along with her well-paid broadcast strategists, walked away from a $200m five-year deal; she effectively gambled with rugby’s future.
It has left interim chief executive Rob Clarke with no choice but to be ruthless in mopping up the mess left by a cast including Michael Hawker, Bill Pulver, Cameron Clyne and Castle.
The board must also be held to account for steering the rugby ship onto the rocks.
Nothing will be the same and that is a good thing. If Fox Sports do come to the negotiating table for 2021 and beyond, rugby sources suggest it could be a long-term deal but with a conservative amount paid on strict conditions. Terms designed to prevent rugby from indulging in the profligacies of the past.
While rugby league has enjoyed an almost flawless return, and the AFL is on the cusp of a comeback, all rugby union fans can do is wait.
To get out of this mess, it’s going to be a long climb, and some senior personnel won’t get to set foot on the mountain let alone ascend it.