Rebels could drop Rugby Australia lawsuit threat if it backs plan to save club

Business heavyweight Leigh Clifford says new investors are willing to treat legal threats against Rugby Australia as a “last resort option” if they find support for their plan to save the troubled club, and has warned the NRL would expand in Melbourne if the Rebels disappear.

Clifford, who is heading a consortium to rescue the Melbourne Rebels, has called on Rugby Australia to put aside past differences with the club and back a new six-year plan that will result in the club continuing as a viable operation until at least 2030.

Businessman Leigh Clifford leads a consortium aiming to secure the future of the Melbourne Rebels.Credit: Eddie Jim

The consortium plan, which has already won interest from overseas investors, would require Rugby Australia to return to the Rebels the licence it took in January after the club collapsed into administration owing its creditors $23 million.

“The danger here is that Rugby Australia abandons Melbourne, but more importantly abandons Victoria, leaving the opportunity for NRL to expand further,” the former Qantas chairman told this masthead ahead of mediation with the sports governing body this week.

“I asked [Rugby Australia chief executive] Phil Waugh at a meeting, ‘If we can come up with a viable proposal for the Rebels in 2025, will you support it?’ And I’d have to say that he looked around a bit, but he agreed, yes, he would. Now we want to see that case brought forward.”

A Rugby Australia spokesperson said the governing body had previously outlined to the consortium it was open to engaging on any plan it put forward.

“Any hold-up has been down to the lack of any details being provided around their plan, which have not been forthcoming,” the spokesperson said.

Asked what impact it would have on Rugby Australia’s position if the Rebels dropped their threat of legal action, the spokesperson said it wouldn’t hurt, but said it had not received any “definitive” communication.

The consortium has engaged advisory firm KordaMentha to prepare a lengthy document of several hundred pages detailing the plan to build and maintain a club that is headquartered in Tarneit on Melbourne’s fast-growing western fringe. The plan includes engagement strategies for suppliers and sponsors.

“We hope to have that to Rugby Australia in the next day or so,” Clifford said. “It’s very comprehensive.”

The collapse of the club sparked a seemingly intractable disagreement between the parties. The directors of the Rebels allege the club was knowingly and unfairly underfunded by Rugby Australia, saying RA did the club’s payroll and knew its tax liabilities. The peak body claims it forwarded the tax funds but the club misused it for other expenses.

Earlier this month, Rugby Australia voted against a $30 million rescue plan put forward by the consortium at a meeting of creditors.

Clifford says he hopes Rugby Australia can take a new approach to the consortium’s plans after initially voting against its first rescue offer earlier this month that was, in part, contingent on the consortium going ahead with its threatened legal action.

“So far, the engagement I’ve had, to be honest, has been a little bit like hitting the ball over the net and it never comes back,” Clifford said. “We’ll say something, and they’ll say, ‘We’ll talk to the board.’

“I hope when they come to this mediation, they come with a positive attitude because the last thing we want is a brawl with Rugby Australia. It’s been going on too long.”

Clifford declined to comment about any discussions between the consortium members and the Tax Office. The seven Rebels directors are engaging with the administrators to have the $11.6 million tax debt they may be personally liable for waived.

He said former Melbourne Rebels president Paul Docherty, who has been mired in business troubles since late last year, had been providing strategic assistance to the consortium as it worked on its new plans.

Why the Rebels entered into administration

Source: PwC administration report into the Melbourne Rebels

PwC administrator Stephen Longley found the club’s disastrous financial state is likely to result in: 

• “A history of trading losses, exacerbated since 2020 by the negative impact on revenue from the COVID-19 pandemic and reduced funding from RA since that time;
• Insufficient revenue being generated from sources other than RA, such as membership, sponsorship and game-day revenue;
• An increasing expense base, including rising wage costs;
• Lack of readily available alternative funding sources to meet the material net asset shortfall and trading losses; and
• Failure to manage its statutory and lease liabilities.”

Rugby Australia has been supporting the club financially throughout the 2024 season, covering player contracts and other costs. Some players are also creditors to the club for relocation costs. Under the plan put forward by the consortium that was backed by creditors, unsecured creditors will receive between 15¢ and 30¢ in the dollar. All staff costs are also covered in the rescue plan.

Clifford said that as the 2024 season moved towards the finals, it was important to reach a resolution to retain the player talent the Rebels had built up at its men’s and women’s clubs.

“This is their career, and they’re understandably concerned,” he said. “We have got to deal with this quickly. Some of the players have existing contracts, and we’ve got to ensure that there’s a team, otherwise there’s going to be financial consequences.”

‘Chock-a-block’: Clifford captivated by Tarneit

Buttressing the consortium’s detailed and confidential financial modelling for the next six years of Melbourne Rebels is a plan to shift the club from its expensive home ground of AAMI Park to a new, partially completed complex in Tarneit.

Under the plan, the Melbourne Rebels’ women’s and men’s professional rugby club would negotiate with Western Melbourne Group to share the Wyndham Regional Football Facility in Tarneit with the Western United A-League teams. The complex has a 5000-seat ground, but there are hopes to include a 15,000-seat stadium for larger events.

Clifford said he had been captivated by Tarneit when visiting the complex recently.

“It’s certainly captured the community’s imagination,” he said. “I went there, and the car park – I thought, ‘It will never fill this.’ I came out and it was chock-a-block full.”

The Rebels’ planned tenancy at Tarneit is part of a broader plan to develop a community precinct that would house thousands of residential homes and the sporting complexes, as well as retail, office and entertainment facilities. Clifford said the consortium had already attracted non-binding interest from two US private equity firms and the Australian arm of a British investment house in investing in the overall precinct plan.

“You have to kiss a lot of frogs before you find a prince, but I would say there has been very big interest [in the investment community] in the whole precinct concept,” he said.

Clifford said the consortium would continue to drum up support for the precinct, and it was delighted to have such strong supporters in the state government for its plan and the future of Super Rugby in the state.

“The government is watching,” he said. “We’ve had comprehensive discussions with the government. They are not happy about this. And you know, the last thing Rugby Australia wants is with the Lions Tour and the World Cup coming up is pissing off the Victorian government, which I think they made a fair attempt of doing.

“We want to grow this business. We want to grow this sport in Victoria. We want a professional team. The reason for a mediation is to resolve issues which concern either side, and I think people come with a good heart that’s possible.”

Sports Minister Steve Dimopoulos previously told this masthead the government “supports rugby union remaining in our state and expects Rugby Australia to commit to a team at the elite level of the sport in Victoria”.

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