Rugby Australia secures $80 million loan through private equity lender
Fears that rugby can’t afford to pay NRL star Joseph-Aukuso Suaalii his record contract have been allayed after a major breakthrough.
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Rugby Australia has avoided insolvency by securing an $80 million loan over the next five years with a private equity lender.
The flexible $80 million credit facility will be loaned by Pacific Equity Partners (PEP) and allow the game to keep going as it prepares for the 2025 British & Irish Lions series and the home World Cup in 2027.
The loan also means RA should have no trouble paying the $5.3 million, three-year salary of NRL star Joseph-Aukuso Suaalii, who begins his contract in rugby in 2025.
RA had explored private equity investment, but it’s understood that a lack of detail around what their next broadcast deal will be worth forced them to seek a loan instead.
With the game in a financial hole, with major sponsors including Harvey Norman and Etoro walking – while most expect their next broadcast deal to be worth millions less – RA needed a significant loan and has finally secured the much-needed money.
There will be investment into high-performance programs, women’s rugby, community and pathways, RA said.
“Following a comprehensive assessment of alternative capital-raising options, RA management and the Board, with the support of financial advisor Jefferies Australia, concluded that refinancing and an increase to its credit facility on more attractive terms was in the best interests of all stakeholders,” an RA statement said.
“With the revenues expected from the British & Irish Lions tour in 2025 and home Rugby World Cups in 2027 and 2029, this new upsized and flexible $80m credit facility on a five-year term, will bridge the period through those events, allowing RA to accelerate its key growth initiatives.
“The additional investment will go to critical areas of the game’s development, with high-performance integration, women’s rugby, community and pathways being areas of focus.
PEP is an Australian-based private capital partner that understands the importance of rugby in Australia, and the potential for growth in the coming years. It is one of the largest and most active private market investors in Australia with approximately $8 billion in assets under management.”
The announcement comes days after the sacking of controversial RA chairman Hamish McLennan, who has predicted the organisation will struggle financially in the coming years.
But RA chief executive Phil Waugh is confident the $80 million will set the game up for future success.
“RA has been assessing various capital raise alternatives with Jefferies Australia for more than a year,” Waugh said.
“Given the visibility we have on revenues from the British and Irish Lions and World Cups, it became clear that debt capital was going to be the best solution for rugby.
“This does not compromise RA’s options down the road, which could include private equity investment.
“This approach ensures that we retain 100 per cent of the commercial revenues from the game, that all capital raised will go into the game, and that RA controls its own direction during this next period of growth and development.
“We plan to invest in the critical areas needed to grow the game – we have identified high-performance integration, women’s rugby, community and pathways as critical areas to focus on, and I believe investment in these areas will give us the opportunity to capitalise on the exciting major events on the horizon.
“In PEP, we have selected a partner committed to helping us on this path – they are likewise excited about this next chapter for rugby in Australia and support our vision and plan. They bring deep experience across different sectors, and investment types, including private equity and debt, and we look forward to working with them.”
World Rugby has changed its structure around World Cups and from 2027 will be the owners and operators of the tournament, which means it controls the delivery of the event.
The RA World Cup team will work closely with World Rugby on the tournament but the global body is in charge of operations, and there is no chance Australia will be stripped of hosting rights.
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Originally published as Rugby Australia secures $80 million loan through private equity lender
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