Rugby Australia posts deficit of nearly $10 million, blames World Cup

Already owing $50 million, RA has announced a huge deficit at its AGM, yet, with new board members at the helm and a big few years ahead on Aussie soil, it is hoping to be back in the black sooner rather than later.

Former Nine executive Alexi Baker and businessman Hans Pearson have been elected to the Rugby Australia board, while director Karen Penrose was ousted in a shock move as the game posted a $9.2 million deficit.

The elevation of Baker, the partner of former Nine chief executive Hugh Marks, has raised eyebrows in some quarters given RA is in the midst of trying to negotiate a new broadcast deal with Nine for 2026 and beyond.

However, RA chief Phil Waugh said Baker – who recently left her job as the NRL’s chief customer and digital officer – would help rather than hinder any new deal, as rumours emerge that Nine is offering less than $10 million a year than what it pays now.

“The very recent appointment of Alexi to the board is an important appointment, we also have allocated a certain amount of money to a broadcasting specialist and consultant to come in and work in-house over the next period of time,” Waugh said.

“The product we’re putting out onto the field [in Super Rugby] is very attractive, and the international content we have coming from 2026 is also very appealing.”

Some insiders have expressed concern that Nine – who have exclusive negotiating rights with RA until the end of the year – now have an ally in Baker if they want to low-ball the game.

Where to next for Rugby Australia? Picture: Getty Images

“The important thing is [she is] a former [Nine executive], she has got great experience across sports administration as well as broadcasting, so understands the landscape particularly well, so we’re very excited to have Alexi joining us,” Waugh said.

Baker and then Marks were sensationally forced to exit Nine when their relationship was made public in 2020.

This masthead understands Nine and Stan Sport’s initial new offer to RA is $23 million a year, down from the $33 million they pay the game annually.

Waugh was reticent to say whether RA could continue to operate with a lesser broadcast deal.

The game has an $80 million credit facility with Pacific Equity Partners (PEP) over a five-year term, from which they’ve already borrowed $50 million.

RA expects to pay back the entire sum next year after the British & Irish Lions tour, forecasting revenue beyond $50 million.

But the next broadcast deal will play a key role in if they need to continue to take on debt to keep the game afloat.

There was a move to oust the entire board from a disenfranchised group including former RA board member Geoff Stooke, but it failed and RA chairman Daniel Herbert said that attitude was not reflective of the major stakeholders.

“The calls haven’t been far and wide, the calls have been from a very small contingent of people and we’ve seen that materialize, that there isn’t actually much to it,” Herbert said.

“We know we need to build trust with all stakeholders, and I include the fans.

“We’ll be continuing that, because the problems we’re facing as a game are everyone’s problems, and Rugby Australia is really a representative body of all of the stakeholders.

“We don’t sit here in ivory towers thinking the problems are seated in one area.

Rugby Australia chief executive Phil Waugh. Picture: Tim Hunter.

“The problems we talk about in terms of living beyond our means, that’s a collective problem we have, and we’ve got to solve it.

“As long as I’ve been around the game, probably 45 years now, there has always been that small group of people agitating in the background and that will never change from what I can see.”

RA’s gloomy result was largely blamed for the loss of Wallabies home games last year, given it was a World Cup year. In the previous two World Cup years, RA posted losses of $9.5m in 2019, and $9.8m in 2015.

RA - which posted an $8.2 million surplus in 2022 – is forecasting another tough year in 2024, but is viewing ’24 and ’25 as one cycle.

Waugh said the unexpected costs of keeping the Melbourne Rebels afloat this year had impacted the financial result.

The governing body will soon decide whether to axe the Rebels from next year’s Super Rugby competition if they deem the franchise too costly, and that will decide the format of the trans-Tasman tournament for 2026 and beyond, for which they’re negotiating broadcast rights.

RA’s chief operating officer Richard Gardham retaining five Australian teams in Super Rugby is possible, but carries enormous strain for the clubs.

“Five teams can work, but it relies on a significant uplift in revenue that’s generated by the game outside of RA-direct revenue, ie the money generated within the club environment as well,” Gardham said.

Under Eddie Jones the Wallabies crashed out in the World Cup pool stages. Picture: AFP

“That’s one consideration we have to deal with in terms of making the decision regarding the Rebels.”

The near $10 million loss follows a tumultuous year in which the Wallabies under coach Eddie Jones crashed out in the pool stages of the World Cup, chief executive Andy Marinos resigned, chairman Hamish McLennan was ousted from the board and the code offered a record $5.35 million deal to NRL star Joseph-Aukuso Suaalii, who joins the code next year.

Jones was recorded to have spent well over budget in RA’s balance sheet for the failed Cup campaign.

“The overall expense for the Wallabies has been well documented, it was $2.6 [million] over the board approved budget,” Gardham said.

“We’ve made a number of changes in our processes to mitigate that going forward.”

Meanwhile, there was genuine shock that Penrose was ousted at the board meeting, with both Waugh and Herbert saying the news was still too fresh to explain.

In one of her final moves as director, Penrose drove the appointment of Kristy Giteau as RA’s first president. Giteau will be co-president with Joe Roff.