CODE Sports Investigations: Fears Rugby Australia’s $200m private equity investment will kill clubs

Division within the ranks of Rugby Australia has exposed a risk that a $200m private equity investment plan could end up destroying club rugby as it has in the UK.

Unrest at Rugby Australia and potential investment could cause more damage

Rugby Australia has been warned Super rugby clubs may die if the sport pursues a $200m private equity investment plan in the coming years.

In a stark warning to Rugby Australia chairman Hamish McLennan who has been openly talking about the potential for selling off the game to private investors, local officials have pointed to the struggles in the UK where multiple clubs have folded just four years after huge cash injections.

A CODE Sports Investigation into the state of rugby union has uncovered division within the ranks, not only around the $5m Joseph-Aukuso Suaalii deal but also in how the game builds a legacy from the 2027 rugby World Cup and looming decision around Private Equity.

Two famous English clubs, Worcester Warriors and Wasps, collapsed this season due to insurmountable debt despite private equity firms CVC Capital Partners sinking $376m into the English Premiership four years ago.

Several sources spoke to CODE Sports on the condition of anonymity, but said there was genuine fears within the game that any move to Private Equity creates a “hunger games” scenario where every decision is based upon profit and loss.

“If it’s a loss-making exercise, they won’t be as attached to the five teams as Rugby Australia is,” one source said.

“They have no allegiance to the history and culture of clubs, they invest in sport because they want influence, and expect return on their money.”

As another leading powerbroker said: “PE will give the game the immediate sugar hit we need. What we don’t know is what the game lookslike five years from now.”

READ THE FULL STORY ON HOW PRIVATE EQUITY COULD KILL CLUBS