Castle refuses to rule out shuttering another Super Rugby team

Professional rugby will survive the coronavirus pandemic in Australia but Rugby Australia boss Raelene Castle could not rule out axing another Super Rugby side in 2021.

Castle announced she would take a 50 per cent pay cut on her $815,000 a year salary to help the game survive a critical next three months and said further cost-cutting - at head office and to player salaries - would safeguard a professional footprint for the game next year.

Half: Raelene Castle will take a 50 per cent pay cut for the next three months as rugby tries to operate through catastrophic revenue losses. Credit: Getty Images

What shape it would take, however, was not a question Castle could answer. After announcing a "think tank" on the future structure of the game at Monday's annual general meeting, she refused to guarantee the existence of the four Super Rugby sides beyond the end of the year.

"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," she said. "We proposed this morning that we have a think tank that will bring together all the key stakeholders across the game and start thinking about some of those scenarios about what options for the game could be considered.

"At the moment we've got contracts in place around delivering a Super Rugby structure, with four teams, and that's the model that we'll be working to. But it would be crazy for us not to be thinking about other scenarios that might roll out. Be that domestic, international or the SANZAAR product [Super Rugby]."

She added later: "What I know is that we will always have grassroots rugby and we will always have the Wallabies and the Wallaroos and the like and we will be working to ensure that after this period in time that the game’s in the strongest possible place it can be."

Castle endured a tough two-hour forum with the game's members and unions on Monday, albeit from the safety of her own home as the meeting was held virtually.

She and interim chairman Paul McLean were peppered by the players' union, which accused them of shutting them out of negotiations on player wage cuts, and was grilled on the organisation's solvency after failing to lodge an audited 2019 financial report with the corporate regulator.

Tabling the unaudited financials and releasing a brief summary publicly, the organisation reported a $9.4 million loss for the year amid a shortened home Test season due to the Rugby World Cup, and a $6.6 million blowout in costs.

The organisation's settlement out of court with former fullback Israel Folau and its associated legal bill was on the list of extra costs, as well as increased community grants and player payments.

We have enough cash with plans we've put in place to ensure we can be cash positive at the end of that three-month period.

Raelene Castle

The last comparable year, 2015, saw the then-Australian Rugby Union report a $9.8 million loss. At the time its Super Rugby grant bill was larger because the Western Force were still licensed participants.

McLean confirmed the board needed up to three months to be sure the business was a going concern before the directors could sign off on the financials. He revealed directors had accessed "safe harbour" advice from outside consultants, which are provisions under the Corporations Act that allow directors to seek protection from individual liability if a company is trading insolvent while they seek a restructure. The federal government recently extended the safe harbour provisions to help businesses deal with the coronavirus outbreak.

"That’s been going on for the last three weeks, I suppose, and those provisions are helpful and also the government’s most recent statements about directors relating to insolvency as well, so we’ve taken all of that on board and those steps have been in place for, I suspect, three weeks now," McLean said.

He said there were no insolvency concerns coming out of 2019 until the virus outbreak reared its head.

"Directors need to ... know what [their access to cash and reserves] looks like for the next 12 months before they’ll sign off on those [accounts], so it’s not unusual for accounts to be finalised and not signed for a period of months after," McLean said.

"The first deadline is the 30th April to sign those, but in this current environment we’ve been advised it’s not one month, it might be two or three. Once the board and directors have a clearer picture that provides certainty we will be a position to finalise this conclusion and then finalise the statements and allow KPMG to complete the audit."

Castle confirmed the organisation had put off announcing a staff restructure until it was across the federal government's $130 billion "Job Keepers" wage subsidy package, which was announced later on Monday.

But she confirmed her own salary savings and said the 15-person executive team was taking 30 per cent cuts, effective immediately and in place for three months.

"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," Castle said. "Like every possible line item across the business they will be analysed on a weekly basis."

Castle also declined to say whether broadcast partner Foxtel had asked for some of its first quarter payments to be repaid, as the competition was suspended two weeks before the end of the quarter. She said mooted administrative cuts and savings would allow them to keep the doors open until the end of June, while also looking into loans from World Rugby, federal and state governments, private lenders and talks with private equity firms. Those options could take four to eight weeks to materialise.

"We have enough cash with plans we've put in place to ensure we can be cash positive at the end of that three-month period, so that's a good start point," Castle said.

"That's before we've had any discussions with RUPA and where those ultimate discussions and options might lead them. That's where we are at the moment and we will be looking for options that can help us at the back end of the year."