Rugby Australia slashes $30m from the cost base

Rugby Australia has slashed $30m in costs off its books following the departure of former chief executive Raelene Castle.

Raelene Castle has been appointed to New Zealand’s top sports administration job

Rugby Australia has slashed $30m in costs off its books following the departure of former chief executive Raelene Castle, who has been appointed to the top sports administration job in New Zealand.

The Australian can reveal Rugby Australia has cut millions out of its cost-base year-on-year and sources say there are plans to slash more.

The news of continued cuts at Rugby Australia comes as Castle was named as the new chief executive of Sport New Zealand. She is the first woman to lead the organisation, which is the overarching governing body for all sport and recreation bodies in New Zealand.

Castle, 49, quit Rugby Australia as the organisation plunged into chaos earlier this year.

The Rugby Australia 2019 annual report shows the organisation made a loss and spent nearly $120m last year, including $19m on corporate expenses with only $4.3m spent on community rugby.

It was Rugby Australia chairman Hamish McLennan who signed up renowned “chainsaw” Adam Foulsham to initially slash $15m off the books, but the newly appointed chief operating officer has saved the organisation double that.

Foulsham is expected to trim more from the embattled code.

“There’s been $30 million cut out of the cost base year-on-year and they will go for more cuts,” an Rugby Australia source said.

RA is understood to be on the cusp of signing a television deal, with Foxtel and Nine Entertainment contenders to take up the rights. On Monday, Nine Entertainment newspapers reported the network was close to signing a deal with RA and previous reports stating they had offered to pay about $30 million a year in cash and free advertising.

A decision on the TV rights is not expected this week.

Last November, Castle walked away from Foxtel’s $40m-a-year, five-year offer for the broadcast rights (Foxtel is part-owned by News Corp, publisher of The Australian). Castle was pushing Foxtel for $100m more.

Castle severed her links with Australia several weeks ago and returned to New Zealand on a permanent basis to be closer to family during the global pandemic. At the time she declined to reveal what her future held, citing confidentiality clauses in her arrangements with her potential new employer.

Castle stepped down from her position at RA in April after learning she had lost the faith of her board, although perhaps more correctly directors realised her position had become untenable and that there was no way RA could progress on any front while she remained as CEO. Castle was a polarising figure in Australian rugby, particularly after Wallabies fullback Israel Folau was sacked after making a series of homophobic social media posts.

Bill Moran, the chairman of Sports New Zealand, said in a statement: “Raelene brings tremendous breadth and depth of experience as a CEO in sports administration and is a proven people and organisational leader. The Board of Sport NZ see her has the ideal person to lead our organisation forward as we continue our important work in addressing declining participation among young people and protecting the strength and integrity of our sector.”

Castle, who was in charge of New Zealand netball and then chief executive of Canterbury Bulldogs NRL club before taking up the role with Rugby Australia, said her experience in Australia had prepared her for the new role.

“My time in Australasian sport has shown me the critical role sport and recreation play in bringing communities together and the positive impact those experiences have on society,” Castle said.

She said she believed she was joining Sport New Zealand at a “key moment” in the sport sector’s history, as it recovered from the COVID-19 pandemic.