Melbourne Rebels saga to drag into courts as Rugby Australia faces hefty legal bills

The battle to save the Melbourne Rebels is far from over, as Rugby Australia continue their own investigations into the troubled franchise.

CHRISTCHURCH, NEW ZEALAND - APRIL 26: Ryan Louwrens of the Rebels looks on during the round ten Super Rugby Pacific match between the Crusaders and Melbourne Rebels at Apollo Projects Stadium, on April 26, 2024, in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)

The Melbourne Rabble saga will continue to drag Australian rugby through a quagmire it cannot afford.

Creditors voted on Friday to back a plan by Rebels directors to save the team, relocate them to the suburban town of Tarneit, and raise up to $30 million to keep them going beyond 2024.

With the vote tied – Rugby Australia and the Australian Taxation Office voted against the proposal – the administrator appointed by the Rebels directors cast the deciding vote.

This is despite the club owing $11.5 million in tax, and found to be trading insolvent for nearly five years following a forensic audit by PricewaterhouseCoopers.

Rugby Australia is conducting its own investigation into how financially viable the Rebels are. Picture: Getty Images

What this means is that the private consortium backing the Rebels has 30 days to finalise the Deed of Company Arrangement (DOCA). A timeline around when they’ll have to repay the ATO is unknown.

Directors involved in the vote are liable for $16.8 million, so this result has saved them a significant headache.

Nevertheless, RA is still conducting its own investigations into how financially viable the Rebels are.

They’ve yet to receive a formal proposal from the private consortium, who have vowed to gain up to $30 million from private investment to keep the Rebels afloat.

The likely scenario is that even with the formal proposal in hand, RA will deem the Rebels too risky to continue on.

That would spark legal action by the consortium against RA to retain their license.

Because the Rebels directors are personally on the hook for a number of damaging - and possibly career-ending – alleged financial misdeeds, this is going to get messy and will likely involve numerous lawyers.

Anyone remember how the Israel Folau saga turned out? Or the legal expenses involved in kicking out the Western Force in 2017.

At a time RA is already $50 million in debt, the prospect of a prolonged court case is as appealing as rehiring Eddie Jones as Wallabies coach.

The governing body played a straight bat to the outcome on Friday.

“Rugby Australia (RA) acknowledges the outcome of today’s second creditors’ meeting in which the Administrator – appointed by the directors of Melbourne Rebels Rugby Union Pty Ltd (MRRU) – exercised the casting vote to pass a resolution in favour of the Deed of Company Arrangement (DOCA) proposed by the directors of MRRU,” an RA statement said.

Rugby Australia CEO Phil Waugh at Rugby HQ in Moore Park. Picture: Tim Hunter.

“RA is pleased that the Rebels’ employees will receive 100 per cent of their entitlements under the DOCA.

“RA will continue with its evaluation of the viability of any future business models for the Melbourne Rebels, and engagement with the relevant stakeholders in this process.”

The consortium, led by former Qantas chair and Rio Tinto chief Leigh Clifford, is delighted.

Their plan to relocate the Rebels from AAMI Park to the Wyndham Regional Football Facility in Tarneit, which they would share with the Western United Women’s and Men’s A-League teams.

Consortium spokeswoman Georgia Widdup – Clifford’s daughter – said the vote was taking the Rebels towards a brighter future.

Former Qantas chairman Leigh Clifford is leading a consortium to buy the Rebels. Picture: Aaron Francis / The Australian

Georgia Widdup, a Melbourne Rebels board director, has been fighting to save the rugby club. Ms Widdup is the daughter of former Qantas chair Leigh Clifford. She also works in finance. Supplied

“The Melbourne Rebels are an integral part of the sporting fabric of the state and play a critical role in making Melbourne the sporting capital of the world,” Widdup said. “Today’s decision ensures the women’s and men’s club can progress plans for our financially sustainable future.

“There is still a lot of work to do, but with the vote out of the way and a lot of community and government goodwill behind the club, we can finally get excited about what the future holds and we urge Rugby Australia to support rugby in Victoria.

“Today is a good day for everyone who loves rugby and wants to continue to see top class rugby played and celebrated in Victoria.’’

The ATO said it could not comment on the case.

Originally published as Melbourne Rebels saga to drag into courts as Rugby Australia faces hefty legal bills