Rugby Australia faces financial crisis, Dan McKellar being eyed as replacement for Eddie Jones

Rugby has struggled in Australia for years, but is now at its lowest ebb. The game’s powerbrokers ruined the sport, and now the sport as a whole looks set to pay an immense price.

LYON, FRANCE – SEPTEMBER 24: Eddie Jones, Head Coach of Australia, looks on prior to the Rugby World Cup France 2023 match between Wales and Australia at Parc Olympique on September 24, 2023 in Lyon, France. (Photo by Chris Hyde/Getty Images)

Australian rugby faces becoming an amateur sport, such is the disastrous decline of the game overseen by decades of failed administrative and coaching decisions.

Dismayed rugby officials and supporters could not find any positives after the Wallabies were hammered by a record 40-6 margin by Wales in their World Cup pool match, which is set to see them eliminated next week before the quarter-finals.

The flow-on effect of the result will be debilitating for an already struggling code.

Sponsors will walk, memberships will drop, talented players will head to league or overseas clubs, broadcasting interest will dry up, and jobs will be lost.

The Wallabies’ disastrous World Cup is over. (Photo by Hannah Peters/Getty Images)

Rugby Australia chairman Hamish McLennan’s “captain’s call” decision to sack Dave Rennie and hire Eddie Jones at the start of the year has proved a catastrophic blunder.

Jones has completely lost the trust of the Australian rugby public and will be given his marching orders if RA wants to retain any of their dwindling fan base.

There is no overstating how much damage has been caused by Jones and this World Cup campaign. To watch Australians, who’d paid a small fortune, walk out of the Parc Olympique Lyonnais stadium with 10 minutes remaining will have told the RA board all they need to know.

The board members are as culpable as anyone in this debacle.

Fans are demanding a complete clear-out. Even if that were to happen, there is no guarantee rugby can be saved here.

As one high-ranking official predicted on Monday, Super Rugby is likely to become the code’s version of the A-League, with Australia’s best talent playing oversees and only assembling for Wallabies duty, like the Socceroos.

And with the already low ratings and attendances, the game may have no choice but to revert to amateur status.

Fans of Australia sing the national anthem prior to the Wales clash. (Photo by Hannah Peters/Getty Images)

THE MONEY

McLennan and his board had been banking on receiving private equity funding to prop up the game’s finances.

But that has gone down the gurgler.

Investment firms told RA they’d get nowhere near what they believe they’ll get – up to $70 million – for a future broadcast deal, and so offered them peanuts.

Those investment experts should know. And after the pitiful performance at the World Cup and the scathing reaction from long-suffering supporters, this will be one of the toughest products to sell in an already crowded market.

RA had hoped for $200 million from private equity. Now they go cap in hand to banks asking for $90 million in loans, $65 million to keep the game alive and $25 million to cover the money they’ve already spent from a $40 million World Rugby loan that kept them afloat during the Covid years.

RA is selling a vision that millions will be made when the British & Irish Lions tour here in 2025, and when Australia hosts the 2027 World Cup.

But when there’s not a Wallabies fan that will believe their team can win a single Test against the Lions, the appeal of the series dramatically diminishes.

The Wallabies’ poor form will diminish interest therefore revenue. (Photo by Chris Hyde/Getty Images)

Much of the money generated will go towards repaying loans, and operational costs.

Nine and Stan Sport have the rights to rugby until the end of 2025, but already have suggested they won’t be paying what they are now – $27 million cash annually – to renew.

Industry insiders say Nine and Stan are building a war chest to make a bold bid for exclusive rights to the NRL when the current deal with Nine and pay television network Fox Sports expires at the end of the 2027 season.

There will be little money for rugby from Nine, and other broadcasters won’t be throwing cash at the game.

A home World Cup will obviously rate well, but the problem for RA is that they do not have the rights to the tournament – World Rugby does, and will sell them to the highest bidder.

RA will make money from tickets and sponsorship deals, but the market will be flimsy over the next 12 months when they most need the money.

THE MOVE

Since the glory years under Rod Macqueen, the Wallabies have gone through a carousel of coaches, none who’ve won a World Cup, or poached back the Bledisloe Cup since 2002.

Rennie had a poor record, winning only 38 per cent of Tests, but had planned a World Cup campaign for three years, and built a strong team of assistants including Dan McKellar, Matt Taylor and Laurie Fisher.

McLennan wanted Jones, and when England’s RFU sacked him for poor performances, he made his move.

McLennan and board director Phil Waugh convinced the board that Jones was worth the risk. However, then chief executive Andy Marinos wasn’t convinced.

Jones wanted a five year deal starting immediately, agreeing to a pay cut in 2023 of around $750,000, before his $1.2 million a year salary kicked in from 2024.

Eddie Jones not appear to have been worth the risk. Picture: Tim Hunter.

Marinos was on holiday in South Africa when he received word that the deal with Jones had been done, and he had to jump on a 6am Zoom call to notify Rennie of his axing.

It was the beginning of the end of the relationship between Marinos and McLennan. When McLennan then compiled a $5.35 million, three-year deal for NRL star Joseph-Aukuso Suaalii, Marinos questioned the deal.

Not long after the announcement, Marinos stepped down as CEO, and Waugh was given the job.

Jones entered the fray generating headlines and bringing the type of publicity RA craved.

The RFU was stunned that Australia had signed him, given Jones’ history in England for churning through assistant coaches and staff members.

But hopeful Wallabies fans believed they were getting the Jones who had taken Australia to the 2003 World Cup final, helped South Africa win in 2007, led Japan to the biggest upset in tournament history defeating the Boks in 2015, and taking England to the 2019 decider.

What Jones has delivered instead is a collection of bewildering selections, resulting in seven losses from eight games.

And on the eve of the Wales clash, revelations that he’d been interviewing for the Japan head coaching role days before his team played their World Cup warm-up match against France has severed any faith fans have in him.

THE FUTURE

Already, there are some within the corridors of power in Australian rugby who are keen to get McKellar back from English club Leicester to replace Jones.

Whether they’d be forced to pay out Jones – RA is still paying Rennie, who was contracted until the end of the World Cup – and pay a release fee to Leicester for McKellar will be significant factors.

But McKellar, who was being groomed by Rennie as his replacement for the Wallabies top job, could likely bring the respected Fisher back with him. The pair left when Jones took up the job.

The aftermath of this World Cup will be bloody.

Super Rugby clubs had planned to put out their membership offers soon. With the bitter taste of the Wallabies’ performances, they’re now reconsidering.

Dan McKellar could be an option to replace Jones. (Photo by Matthew Lewis/Getty Images)

And there is no way they trust RA to handle their finances under the proposed centralisation model that would see the national body take over the franchises.

Given what’s transpired over the past 12 months, they can’t be blamed for their reticence. It means there will be continued division between the states and RA, a long-running battle that has crippled progress.

Next June, Australia’s World Cup conquerors are set to visit, with officials working on two Tests against Wales and one against Fiji at home.

How many people turn up depends on the actions of RA over the next few weeks.

Originally published as Rugby Australia faces financial crisis, Dan McKellar being eyed as replacement for Eddie Jones