ARU boss Bill Pulver assures players cost cutting will be matched by head-office belt tigtening

AUSTRALIAN Rugby boss Bill Pulver has assured agitated players that any wage cuts in the future will be matched by head-office belt tightening.

Bill Pulver

AUSTRALIAN Rugby boss Bill Pulver has assured agitated players that any wage cuts in the future will be matched by head-office belt tightening, and the latter has already started in earnest.

In a broad ranging interview, Pulver also addressed other issues on the shaky state of Australian Rugby's finances, including John O'Neill's $2.2m golden handshake, the likelihood of an ARU bid for the 2023 Rugby World Cup and his concerns for the Waratahs after losing HSBC as a sponsor this week.

The new ARU chief executive sent panic racing through the Australian franchises last week when he revealed players could face reduced salaries in coming years as part of a drive to slash costs in rugby.

The ARU recently reported an alarming $8.3 million deficit for 2012, and it followed a deficit of $11m in 2011. Pulver said it was also "commonly known we don't have a lot of cash in the business.

"The reality of our financial state is it is challenging at the moment," Pulver said.

The threat of player wage cuts prompted players to privately say they would only agree if everyone in the ARU, from Pulver down, did likewise.

"Frankly, that's fair game. I have regular meetings with the players association. (RUPA boss) Greg Harris and I are in the process of reviewing the CBA right now. That entire discussion is front and centre," Pulver said.

"There is nothing different in the approach we are taking with RUPA on player salaries than any other part of the business. I have to look at every single cost area in the business.

"There is no question we need to cut our expense cloth according to the revenue in the business. So I am looking at every single area."

Admitting "Corporate" overheads of over $20m a year were way too high - as well as $15m in High Performance costs - Pulver said both were "big numbers" to be reined in.

Previously occupying two floors (ground and sixth) of the St Leonards office building they call HQ, ARU staff last week packed up and all moved their offices into the ground floor.

"That's a pretty substantial cost saving exercise," Pulver said.

"With David Nucifora's exit, Matt Carroll's exit and other senior executive exits, and the organisation structure I announced the other day, it's quite typical of a business in transition.

"What we have in place is a very flat, agile structure that's promoted bright young talent within the ARU. I have only brought in one important new hire, Jon Nichol, in a comercial and marketing role, and part from that hire, I have basically elevated smart people inside the ARU in such a way that round of changes has resulted in a significant cost saving."

Asked if the $2.2m paid to departed CEO John O'Neill disclosed in the ARU's annual report was a contractual payment, Pulver said: "As I understand it, it was. Otherwise I am not sure why it would have been paid. Bear in mind I wasn't party to that transaction but my understanding is, yes, it was all contractually obliged."

The forthcoming Lions tour is expected to be pull the ARU out of a financial hole but with no major events in Australia planned until the next Lions visit in 2025, Pulver said Australian rugby could no longer rely on "periodic windfalls".

"Australian rugby has traditionally financially survived on windfall gains, and that's World Cups and Lions tours. The reality is our next windfall is 12 years away. We just can't sit and wait for another windfall. We are essentially looking for incremental growth in revenues," he said.

Pulver says investing in developing elite talent is a strong area of focus, reasoning that magic balm of on-field success by the Super Rugby franchises and the Wallabies will drive revenue growth.
Such improvement would also help rugby restore its dwindling stocks in today's tough sports sponsorship market, Pulver said.

No local naming rights sponsor was secured for Super Rugby \006 estimated to be a $1m-plus entity \006 and the ARU can't find a community rugby sponsor either.
Until late last week, no naming rights sponsorship for the British and Irish Lions tour was nailed down.

The ARU's negotiations with Westpac fell over, but they are believed to since signed DHL as the Lions tour naming rights sponsor and will announce the relationship tomorrow.

Estimated by experts to be normally worth in the vicinity of $1.5m, the ARU are believed to have settled for a significantly reduced sum.

Asked if he had concerns for the Waratahs - who this week lost HSBC as their naming rights sponsor after 12 years - Pulver said: "The sponsorship market is tough."

"My view is that reflects a pretty difficult economy out there. There has been a pretty substantial loss of confidence in the Australian economy over the last 12 months, which has manifested itself into a tough sponsorship market," Pulver said.

"It's not only affected rugby, its affected a lot of industries. We are just in a difficult place at the moment.

"So yes, the Waratahs will have some challenges. That market is difficult, and when you look the ARU's financials, our revenues haven't been as strong as we hoped they'd be in a difficult sponsorship market."

The Daily Telegraph revealed this week the IRB were looking to scrap the north-south rotation for Rugby World Cup hosting duties, freeing up Australia to bid for 2023.

"I absolutely would consider that, definitely," Pulver said.

"But frankly, I suspect South Africa will be pretty firm favourites for that. That doesn't mean we won't bid."

Despite speculation the IRB are considering only major nations to host World Cups in the future -  to assure profitability - Pulver repeated his concerns the ARU may have to wait another 20 years for a World Cup however.

"North-south could go but it may become an east-west alternate, that would seem a logical thing to do," Pulver said.

"When I look at the history of the World Cups and what they'll want to achieve oing forward, I can fairly logically see South Africa being favourite in 2023, a European World Cup in 2027, and then I can see them unfortunately being tempted to look towards a South American tournament in 2031.  So it's possible we could 35 or 39 as the next opportunity. Now that may be a worst case scenario, but the net result of it we shouldn't be planning on a financial kicker into our coffers from a World Cup any time soon."