Israel Folau set to lose his millions from his out-of-court settlement if Rugby Australia goes under
Israel Folau will be hoping the game he almost bankrupted stays afloat as it can be revealed his multi-million payout from Rugby Australia could take a major hit if the sport’s governing body is forced into insolvency.
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In a very direct way, Israel Folau has driven Rugby Australia to the brink of insolvency, but now it emerges that if the sport’s governing body goes under, it could cost him millions of dollars.
Sources told The Australian that Folau’s out-of-court settlement — which is undisclosed but understood to be the remnants of his four-year contract, some $3m — is being paid off in instalments.
There were no details of what the payments were or how frequently they were being paid but, ironically, it leaves Folau desperately hoping the game he almost bankrupted with his freedom of religion lawsuit stays afloat.
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Should RA be forced to declare itself insolvent, Folau would become an unsecured creditor.
Depending on what assets RA could muster, he’d likely be paid out only a few cents in the dollar.
As one observer put it, he would be paid the same rate as the pest controller or jersey supplier.
After a stand-off lasting nine months following Folau’s decision to post homophobic messages on the internet, in breach of promises he had made to RA chief executive Raelene Castle and Wallabies coach Michael Cheika, an out-of-court settlement between the two parties was reached in December, with both parties apologising to each other.
The following month, Folau signed a one-year deal with the Catalans Dragons in Super League, where competition has been suspended because of the COVID-19 pandemic.
Worryingly for Folau, World Cup-winning captain Nick Farr-Jones predicted that an administrator could be appointed to RA within the next fortnight.
“I understand reserves are minimal ... that would only be funds that have come from World Rugby from the participation right of the World Cup last year,” he told the ABC.
“Otherwise I don’t think we’ve put any acorns away for a winter like we’re expecting at the moment, where there is no income projected.”
RA did take heart though from recent comments from World Rugby as it assists all national unions to navigate through the pandemic crisis — which, of itself, showed how desperately it is travelling because the World Rugby statement promised effectively nothing.
“We are well aware of the situation down south,” World Rugby chairman Bill Beaumont told The Daily Mail.
“The southern unions are looking at the July Tests and the northern unions are looking at the November Tests but we are all in it together.”
The difference is that the SANZAAR partners’ peak earning period is three months from starting whereas the earliest commitments in the northern hemisphere are in November.
The Wallabies are scheduled to play Ireland (November 7 in Dublin), France (November 14 in Paris) and England (November 28 in London) on their spring tour.