Overseas Covid dramas may save Rugby Australia from player exodus

Rugby Australia has passed on a near 30 per cent reduction in revenue to the Super Rugby franchises while taking a realistic view that the markets that tend to plunder Australian players are still Covid-hit.

Rugby will cop a 30 per cent drop in revenue but Michael Hooper’s Wallabies have been quarantined from any savage funding cuts

Rugby Australia has passed on a near 30 per cent reduction in revenue to the Super Rugby franchises but is relying on private equity to make up some of the shortfall while taking a realistic view that the traditional markets that tend to plunder Australian players are still Covid-hit.

RA chief executive Rob Clarke told The Australian on Monday that the 30 per cent reduction was in line with RA’s own projections of a 30 per cent cut in expected revenue next year.

“We have been consistent in that and trying to share the pain legitimately. We would have preferred not to do but we all have had to face the reality of that,” Clarke said.

“We have now taken $40 million out of the cost base of Rugby Australia so we will be entering 2021 with $40 million less in our cost line. We have reduced our staff by 45 per cent and we have had a 40 per cent reduction in overall expenses.”

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Squad sizes and player salaries will hinge on ongoing collective bargaining negotiations taking place with the Rugby Union Players Association but at least these — at least according to Clarke — are proceeding on a fairly harmonious basis.

“We are working very closely now through RUPA to explore what the impact of the reduced revenue into the game that RA is experiencing and that will be played out in the coming weeks,” Clarke said. “But I am very pleased to say there has been very positive and transparent dialogue around what rugby is facing and RUPA and the players have been outstanding in how they have accepted that and understand that as part of the rugby ecosystem, that will impact on them in one way, shape or form.”

The expectation, though, is that the long-predicted player drain overseas might not happen because all the major rugby markets, Britain, France and Japan, are still very much in the grip of the Covid pandemic.

“We can’t underestimate the impact of Covid on some of those markets that might have traditionally taken our players,” Clarke said. “They are not necessarily very attractive any more. The global economy is different to what it used to be.”

While RA has been discussing the 2021 budget with the states for some time, the final details were only forwarded on Monday to the five Super Rugby franchises – the Waratahs, Reds, Brumbies, Melbourne Rebels and Western Force.

“They’d like more money … I get that,” he said.

Asked if the reductions would allow the franchises to still run viable enterprises, Clarke replied: “That is everyone’s challenge. It is Rugby Australia’s challenge. Are we able to run the game on the revenue that we anticipate we are able to make? And our answer to that is yes.

“But we are also looking at alternatives ways to bring revenue into the game to help to bolster our bank account. Absolutely. And that is what every state is being encouraged to do.”

The Melbourne Rebels already attract private investment while the Force have been kept afloat for the past three seasons by the generosity of Perth mining billionaire Andrew Forrest, generosity that may be beginning to wane.

At least one state has toyed with the idea of inviting in a private equity partner but after the initial courtship, the relationship was never consummated. Still, that is the direction rugby is currently heading and the pace is gathering.

“I am not foreshadowing what model might be implemented,” Clarke said. “What I am saying is that just like the northern hemisphere has done, we understand that NZ is exploring, and South Africa is exploring (private equity), I believe that RA board will now turn their mind to the mind to those types of areas that may well unfold during the course of next year and as a legitimate way of helping us transform our game.”

While Clarke indicated that all parts of the RA’s business had been subjected to intense scrutiny – including the Wallabies – there also was an understanding of the importance of the national team to the overall health of the game in Australia. That sounds suspiciously like that Wallabies have been quarantined from any savage funding cuts.

Significantly though, RA has retained community funding grants at the 2019 levels, which were significantly up on what they were after the coronavirus pandemic struck this year. “So we have tried to protect the grassroots game with our community rugby funding,” Clarke said.