Rugby Australia’s financial woes laid bare as World Rugby prepares to help out embattled code
The massive $16m loan Rugby Australia is hoping to receive from World Rugby would only help cover some of the cracks in the embattled code.
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The $16 million Rugby Australia is hoping to receive in a loan from World Rugby is believed to cover outstanding debts including well over $1 million in legal fees for the Israel Folau case and several million dollars owed to other creditors.
The Weekend Australian can reveal the law firm Herbert Smith Freehills, who acted for Rugby Australia in its long-running battle with Folau, are awaiting payment for their services.
“It is a $2 million bill from Freehills for work done on the Israel Folau case and it is yet to be paid,” said a source.
RA denied that amount in a statement, saying the figure was “incorrect”.
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Folau sued RA for religious discrimination after he was axed over his homophobic social media posts, with the two parties agreeing to a private out-of-court settlement — understood to be $3m — in December last year.
RA is likely to receive the $16m loan from the game’s international governing body, which would cover the outstanding debts and the financial loss it made last year.
In the “unaudited” 2019 annual report RA registered a $9.4m loss while CEO Raelene Castle was awarded a $114,000 bonus. Castle maintains she is yet to receive it, but has not ruled out taking it in the future.
The embattled CEO’s days in the job are numbered, with moves behind the scenes to remove her.
Focus has also turned to who to install as an interim leader to steer the code out of the financial disaster.
RA’s chief business officer last week took stress leave with pay.
The game in Australia is facing a $120m black hole due to COVID-19.
It doesn’t have a broadcast deal for next year.
Rugby Australia is in financial dire straits and World Rugby is set to make more than $150m available to help national unions stay financially afloat amid the coronavirus pandemic.
The former ARU chief executive John O’Neill, who led Australian rugby’s most successful period between 1995 and 2003, and again between 2007 and 2013, said RA was now in an “extraordinarily difficult” situation.
“It is a massive reality check for rugby, they went into this coronavirus badly placed,” O’Neill said. “Of all the football codes, it was in the most vulnerable state with the cessation of competition.
“The AFL and NRL are strong and they are coping. They are big sports who can talk with confidence to their broadcaster and stakeholders about how they will start and how they start.
“I am the chair of The Star Entertainment Group, we had to close doors across three properties and had to stand down around 8500 people, so I am acutely aware of how painful this is — but rugby’s vulnerability is that it doesn’t have a broadcast agreement and it doesn’t know what competition it is going to play in.
“They are not the masters of their own universe like the AFL and NRL are. They control their competitions.
“It’s ability to make unilateral decisions is exceptionally constrained — it has to talk to SANZAAR — New Zealand, South Africa … World Rugby … there’s a lot to be despondent about but out of that despondency needs to be genuine leadership and people stepping up to the plate to think about the future.”
O’Neill has suggested that all the conflicted parties “lay down their weapons” and unify to help resurrect the game in Australia.
“Nothing should be off the table, everyone has an opinion and I think there needs to be more of a coalition of the willing who works with the system, to work out what the best option for rugby in Australia,” O’Neill said. “Not the best option for New Zealand, South Africa or World Rugby. See if they can intellectualise a range of options to keep the game alive and well.”
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O’Neill said as a start, as restrictions for COVID-19 are eased, all 192 professional players should be encouraged to go back and play for their clubs.
“The best place for rugby in Australia to start is with the bedrock of rugby,” O’Neill said.
“I am talking as an independent person with a great affection and affinity for the game, why wouldn’t you fix a date with the Shute Shield and the Hospital Cup in Brisbane and find a way to bring Canberra and Melbourne in. Make it, club rugby, the renaissance of rugby as an interim step.
“Just as NRL and AFL are crafting competition structures, fit for purpose, RA together with their major unions should be crafting club competitions albeit in a shortened format.”
Despite being approached to be chair last year, O’Neill has ruled out returning to Australian rugby due to time constraints.
Originally published as Rugby Australia’s financial woes laid bare as World Rugby prepares to help out embattled code