Rugby in the red, spending at $120m

Rugby Australia is in a disastrous ­financial position, with leaked documents showing administrators spent nearly $120m last year, including $19m on corporate ­expenses.

Hamish McLennan hopes to start as Rugby Australia chairman this week, as the administration battles to dig itself out of a financial hole. Picture: John Feder

Rugby Australia is in a disastrous ­financial position, with leaked ­documents showing the game’s bosses spent nearly $120mlast year, including $19m on corporate ­expenses.

The Australian has obtained key details from the still unaudited 2019 annual report that confirm the organisation has totalliabilities in excess of $45m, of which there is $20m owed to creditors — including $7.04m in a currency hedge fund to HSBCon December 31.

Auditor KPMG is still waiting for a $17m loan from World Rugby, expected to arrive this week, before providing an audit reportfor the 2019 results.

The 2019 report details RA’s biggest operating expenditure is on Super Rugby, which tops $30.9m. “Super Rugby team costs” total $6.3m and “Super Rugby and high-performance funding” hit $24.6m. Player payments and player association costs were $20.5m.

There was a $19m spent on “corporate” operating costs, but last year only $4.3m was spent on “community rugby”.

Wallabies team costs were $9.6m in a World Cup year while “national Sevens teams” costs were $5.3m.

There are concerns the game is heading for insolvency as it struggles under the weight of COVID-19, with no start date for a competition, no assets and no broadcast deal for 2021.

The annual report shows RA had $12m in cash equivalents on the balance sheet as of December 31. It is unknown how much of that is left four months later.

Sydney businessman Hamish McLennan told The Australian he was “hopeful” of joining the RA board as chairman in the coming days, as the administration battles to dig itself out of the financial hole.

Mr McLennan, the chairman of property group REA, signalled an intention to make an ­Australian bid for the 2027 World Cup a key focus should he take the role.

“I think the 2027 World Cup bid is an incredible opportunity for the country,” Mr McLennan said.

“We are the only winter code to be able to pull off something like this which would then bring a billion into the Australian economy.”

The Australian reported last week that the media executive and Magellan director was a preferred candidate of interim chair Paul McLean, a revelation that triggered the resignation of RA board member Peter Wiggs and the withdrawal of Australian Olympic Committee chief executive Matt Carroll from the race to be the new rugby chief executive.