Wallabies sponsorship deal with controversial businessman Sanjeev Gupta’s company falls over

The Wallabies jerseys were printed with a new sponsor set to inject millions into the team and the game — and then the company hit financial strife.

Sanjeev Gupta was in talks to become the Wallabies’ major sponsor

The Wallabies secured a new jersey sponsor in GFG Alliance, with jumpers printed up with the company logo, only for the deal to fall over at the 11th hour after controversial businessman Sanjeev Gupta’s company struck trouble amid the Greensill Capital collapse.

The mooted deal with Gupta’s steel and mining conglomerate GFG Alliance had been negotiated for months and had only been recently terminated. Gupta is now desperately scrambling to save his global empire after the collapse of his main financier Greensill.

The Weekend Australian understands Gupta’s offer to Rugby Australia was to have at least matched the estimated $5m Qantas had been paying for its major sponsorship for the Wallabies, which ended last year.

The relationship between GFG seemed unlikely, perhaps indicating Rugby Australia’s desperation. One senior rugby source said: “Why a steelmaker in South Australia?”

But talks were called off in recent weeks before a deal was officially struck, although the parties went as far as printing up Wallabies jerseys with the GFG logo on the front.

Seven months on from Qantas stopping their sponsorship with the Wallabies, the team is without a major backer.

Meanwhile, GFG Alliance remains a sponsor of AFL club Port Adelaide, of which it has been a major partner since striking a five-year deal in February 2019. Port sources said GFG remained in touch with the club’s management and had so far paid all of its sponsorship instalments on time and in full.

While the termination of the talks with GFG for the Wallabies deal is a blow for the cash-strapped Rugby Australia, a high-ranking rugby source told The Weekend Australian that the code was confident of signing a major sponsor for the national team within the next month and certainly by the time of planned international matches against France in July.

In September last year when news emerged that Qantas was ending their partnership, Rugby Australia officials Hamish McLennan and Rob Clarke said they believed several international blue-chip firms would step forward to fill the void created by the loss of the airline.

The high-profile Gupta has been scrambling to save his business empire since the collapse of one-time billionaire Lex Greensill’s supply chain finance group Greensill Capital, which became insolvent last month and was this week voted into liquidation by creditors.

Greensill is owed $US5bn ($6.56bn) by Gupta’s GFG, the owner of assets such as the Whyalla steelworks in South Australia, and Gupta has been trying to secure refinancing for the debt.

A court hearing is scheduled in early May related to Credit Suisse’s bid to appoint liquidators to GFG assets including the Whyalla steelworks.

GFG acquired the Whyalla steelworks and other assets in 2017 after it fell into administration and Gupta was hailed a saviour of the town

He may have held a similar title in rugby union, which has been struggling financially and been searching for a new Wallabies sponsor after Qantas ended its 30-year relationship, if the deal had gone through.

Meanwhile, Rugby Australia will hold its annual general meeting next Thursday and announce its financial results for the 2020 calendar year.

While the sport’s finances are still expected to be in a dire state, there should not be a repeat of last year when Rugby Australia had to strike a series of deals to keep it solvent and lodge its financial report with the corporate regulator after auditors KPMG had at first not signed off on the accounts.

Rugby Australia recorded a $9.4m loss in 2019 and struck an agreement with World Rugby to receive a £7.5m ($14.2m) advance, as well as a loan facility of up to $6.9m with financial institution HSBC that is repayable in June 2022.

One reason KPMG had been reluctant to sign off on the 2019 accounts was the potential lack of broadcast revenue last year due to the shutdown of sport as a result of COVID-19 and the lack of a broadcast deal past the end of 2020, a situation that has since been alleviated with the clinching of a new TV deal with Nine Entertainment and its streaming service Stan.

But the Nine deal, while worth up to $100m over three years, is still less than the previous $285m it was paid over five years by Foxtel and international broadcasters.