Melbourne Rebels’ tax debt brawl looms

The crisis at Rugby Australia has deepened over who should pay the Melbourne Rebels’ $10 million tax debt, and what happens to the club’s future.

Creditors of the collapsed club Melbourne Rebels will meet for the first time on Thursday morning, where the full extent of rivers of red ink will be laid out. Picture: Getty Images

The crisis at Rugby Australia has deepened amid a boardroom brawl over who pays back the Melbourne Rebels’ $10 million tax debt.

Creditors of the collapsed club will meet for the first time at 10.30am on Thursday, where the full extent of rivers of red ink will be laid out.

Administrators from PwC will hold the meeting online, with the ATO the leading creditor, along with $6 million owed to former Rebels board members.

Suppliers including caterers were also expected to make a claim on the team.

There was still no deal on Wednesday for ongoing payment of coaches and back room staff.

A financial report was due later this month.

A second creditors meeting in March will decide if a debt agreement can be made or if the club will be put into liquidation.

Daniel Maiava scores a try at the weekend against the Waratahs. Picture: Getty Images

Former Melbourne Rebels’ board members, who include prominent lawyer Tim North, KC, were expected to claim that Rugby Australia was partly responsible for the tax bill because they were a signatory on player contracts.

Mr North declined to comment when approached this week. Rugby Australia was expected to reject responsibility for the tax bill, with a deadlock opening the door to potential legal action.

The Rebels turned on a spirited performance in a trial at the weekend, beating the NSW Waratahs 38-12, as the players shut out the off field drama.

The Western Force, which had previously been kicked out of Super League rugby, also had a win against the Queensland Reds in a trial match at the weekend.

Rugby Australia CEO Phil Waugh. Picture: Getty Images

Rugby Australia said in a statement that it was working with PwC to work out how much the Rebels’ owe.

“We are working with the administrator on what is required for the Rebels to deliver the 2024 season – that process has not concluded,” the statement said.

But Rugby Australia’s finances were also under strain as it has an $80 million loan with Pacific Equity Partners.

The deal was understood to have been released as an initial $50 million payment, of which $30 million was used to pay debts.

That left $20 million to keep the lights on before the final $30 million of the loan was released.

When asked about the loan, Rugby Australia said: “We are not going to provide a running tally on this. This sort of information will be included in our usual reporting processes.”

Former Rebels board member and prominent lawyer Tim North. Picture: Supplied

Pacific Equity Partners declined to comment this week but sources claim the fund, which was established in 1998 and has $8 billion in assets under management, took a long-term view on its investments.

The collapse of the Rebels and reports that the ACT Brumbies would be in voluntary administration by mid year, has raised questions whether Rugby Australia can continue as a going concern.

The Brumbies rejected claims they were in financial trouble this week.

But if both the Rebels and the Brumbies fell over, a broadcast deal with Stan Sport was likely to reduce in value from its current $30 million.

Stan Sport was contacted for comment.

Rugby Australia has been hoping for a windfall from the British and Irish Lions tour next year and the 2027 Rugby World Cup.

The club’s former chair Paul Docherty, whose other companies are battling $70 million of debts, has not returned calls.

Rugby Australia did not respond to questions.

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