Rugby Australia in turmoil and will cut roles across the business
In the face of loses nearing $10 million and a failure to provide audited accounts at their annual general meeting, Rugby Australia will ask the players to take big pay cuts to help save the code.
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Rugby Australia boss Raelene Castle will take a 50 per cent pay cut for the next three months, and ask top Wallabies stars to take significant cuts on Tuesday as the code battles to survive beyond July.
RA lost $9.4 million in 2019 and failed to provide audited accounts at their annual general meeting on Monday due to the coronavirus crisis.
Castle, understood to be earning $840,000 annually, will halve her pay immediately but will still earn more than $400,000, while her 15-person executive team have accepted 30 per cent pay cuts as rugby faces potential insolvency within three months.
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In dramatic developments for the game following the AGM, it was revealed that:
- Castle could not guarantee the future of Australia’s four Super Rugby teams beyond this year
- A “think tank” is looking at scenarios where Super Rugby would be scrapped and a domestic tournament would take its place from next year
- Several jobs would be cut across RA and the four franchises
- RA has appealed to World Rugby and the Australian Government for financial assistance
- Israel Folau’s confidential legal settlement, understood to be up to $4 million, is part of the $6.6 million additional spending RA made in 2019, contributing to the $9.4 million loss
- RA revealed it could take up to three months to produce audited accounts, given the lack of financial security due to lost earnings this year.
Amid this backdrop, RA will confront an angry RUPA on Tuesday.
The players’ union boss Justin Harrison accused RA of keeping Australia’s 192 professional players in the dark about the game’s finances. Castle rejected that notion, saying the fluctuating coronavirus situation made it difficult for RA to present the players with accurate figures.
They’ll be asked to take pay cuts over the next three months, but News Corp Australia understands the players will be reticent to take more than the 30 per cent accepted by RA’s executive staff.
“I'm taking a 50 per cent pay cut and the senior executives will be taking a 30 per cent pay cut,” Castle told reporters via a video conference after the AGM.
Asked if that was enough if she is still clearing more than $400,000, Castle replied: “I think all of these things will be discussed on a monthly basis but I think that's a pretty good start point to set an example around how important I think this issue is. Like every possible line item across the business they will be analysed on a weekly basis.”
Castle could not guarantee all four Australian Super teams would survive.
“We're just not at that stage at the moment, survival for the next three months is the most important piece, then we can sit down as a sport,” Castle said.
Castle said RA had not settled on a percentage cut they wanted the players to take.
“I've committed to RUPA that we wouldn't come to the table as a fait accompli and it be presented to them as a 'here it is, take it or leave it',” Castle said.
“We will work through that scenario planning with RUPA, that's the commitment I've made to Justin, I stand by that and we'll start those discussions tomorrow.
“Rugby Australia is very comfortable with where we are, we've had a good engagement with RUPA, we always have. They have expressed their frustration, I share their frustrations, I wish that we could get there quicker and I wish we could have all this nailed down.”
Given the lack of games, it’s understood broadcaster Fox Sports has asked for some of the money paid quarterly in advance to be returned, however Castle would not be drawn on the matter.
“I’m not going to get into the commercial conversations and specifics of our Fox detail,’ she said.
“What I would say is we continue to be in positive dialogue with them, we have worked very hard alongside them to offer them additional content and new content that they otherwise haven’t previously had access to, to try and work through what is for them and us a really difficult time.
“We are having some conversations with Fox Sports around our broadcast payments and we’ll be having those conversations this week.”
With no content to fulfil broadcaster obligations and collect gate-takings and corporate sales, rugby is walking a tightrope for survival and will desperately need whatever money is on offer from the government and World Rugby to keep going.
The ongoing uncertainty around time frames for resumption of games also means further cuts could be made beyond the next three months.
“There is no doubt that across our business including staff, we are going to have some very difficult conversations,” Castle said.
“But we also know the government are trying to make some announcements around supporting staff so that they get supported through that job-keeper process.
“We're in dialogue with the government to ensure we know what that allowance looks like and we can factor that into our decision-making.”
After the AGM, RA conceded there is “uncertainty surrounding the business into 2020 and beyond”.
The multimillion-dollar payout to Israel Folau and unpredictability of the coronavirus restrictions - set to continue for up to six months and potentially cancel Super Rugby and Test matches this year – means RA can’t give members a clear picture of their full losses for the remainder of 2020.
Originally published as Rugby Australia in turmoil and will cut roles across the business