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Israel Folau to lose his millions if Rugby Australia goes under

Israel Folau could lose millions of dollars if Rugby Australia is forced into insolvency.

Israel Folau playing for Catalan Dragons last month. Picture: Getty Images
Israel Folau playing for Catalan Dragons last month. Picture: Getty Images

In a very direct way, Israel Folau has driven Rugby Australia to the brink of insolvency, but now it emerges that if the sport’s governing body goes under, it could cost him millions of dollars.

Sources told The Australian that Folau’s out-of-court settlement — which is undisclosed but understood to be the remnants of his four-year contract, some $3 million — is being paid off in instalments.

There were no details of what the payments were or how frequently they were being paid but, ironically, it leaves Folau desperately hoping the game he almost bankrupted with his freedom of religion lawsuit stays afloat.

Rugby Australia Chief Executive Raelene Castle.
Rugby Australia Chief Executive Raelene Castle.

Should RA be forced to declare itself insolvent, Folau would become an unsecured creditor. Depending on what assets RA could muster, he’d likely be paid out only a few cents in the dollar.

As one observer put it, he would be paid the same rate as the pest controller or jersey supplier.

After a stand-off lasting nine months following Folau’s decision to post homophobic mess­ages on the internet, in breach of promises he had made to RA chief executive Raelene Castle and Wallabies coach Michael Cheika, an out-of-court settlement between the two parties was reached in December, with both parties apologising to each other.

The following month, Folau signed a one-year deal with the Catalans Dragons in Super League, where competition has been suspended because of the COVID-19 pandemic.

Worryingly for Folau, World Cup-winning captain Nick Farr-Jones predicted that an administrator could be appointed to RA within the next fortnight.

“I understand reserves are minimal ... that would only be funds that have come from World Rugby from the participation right of the World Cup last year,” he told the ABC. “Otherwise I don’t think we’ve put any acorns away for a winter like we’re expecting at the moment, where there is no income projected.”

RA, which has no intentions of declaring itself insolvent, met on Sunday with the Rugby Union Players Association in an attempt to work out an emergency pay deal with its players to cover the next three months.

“This is about cash, this is about our cashflow position and what we can afford to give the players,” said RA chairman Paul McLean. “The rest of rugby has taken an 85 per cent payroll cut. It’s not forever. It’s for three months, and then we can continue to work with them on a weekly basis as things change.”

The meeting broke up after 2½ hours with no resolution.

“Talks were positive and robust, with both parties agreeing to continue to move negotiations forward with ongoing discussions scheduled for this week,” RA said in a statement. “Rugby Australia remains focused on securing a fair and reasonable deal with the players that will help protect the long-term future of our game.” RA also took heart from recent comments from World Rugby as it assists all national unions to navigate through the pandemic crisis — which, of itself, showed how desperately it is travelling because the World Rugby statement promised effectively nothing.

“We are well aware of the situation down south,” World Rugby chairman Bill Beaumont told The Daily Mail. “The southern unions are looking at the July Tests and the northern unions are looking at the November Tests but we are all in it together.”

The difference is that the ­SANZAAR partners’ peak earning period is three months from starting whereas the earliest commitments in the northern hemisphere are in November. The Wallabies are scheduled to play Ireland (November 7 in Dublin), France (November 14 in Paris) and England (November 28 in London) on their spring tour.

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Original URL: https://www.theaustralian.com.au/sport/rugby-union/israel-folau-to-lose-his-millions-if-rugby-australia-goes-under/news-story/37b4f3134a77beedf5aaae6bac763e95