Melbourne rugby franchise not so super

By Melissa Woods / Wire

The new Melbourne Super 15 franchise is in disarray with investors pulling out after failing to agree to terms with the Australian Rugby Union over funding.

Members of the VicSuper15 group, who were involved in the winning bid for the new licence in the expanded 2011 competition, have “ceased negotiations” with the ARU, according to spokesman Ray Evans.

He said the group had European Cup-winning Australian coach Michael Cheika, who is currently with Irish side Leinster, lined up to coach Melbourne, and “possibly (Wallaby skipper) Rocky Elsom” but was unsure if that would now eventuate.

Mining magnate Kevin Maloney, one of the main backers of the franchise, is among investors to walk away saying the operation isn’t viable.

The parties reached an impasse over funding, with the ARU unwilling to match an annual grant of $4.2m to the existing Australian Super sides.

They initially offered $2.1m which was upped to $3m but members of VicSuper15 say it’s insufficient.

The Melbourne side was set to be the first privately-funded franchise in a departure from traditional state-owned Super rugby teams, however if the ARU runs the team it will put it in a position of conflict of interest with the other state-run sides.

“They won’t provide parity so we’ve basically said it’s not commercial,” Evans said.

“They’re going to set it up now and hope that somebody’s going to pay for it and make money out of it, I don’t know how they’re going to make it work.

“That’s the major sticking point, that they weren’t prepared to provide the same amount of TV rights as the other states.”

Another investor, media buyer Harold Mitchell, is also said to be disillusioned with the ARU offering but is attempting to continue negotiations.

While the ARU will give the franchise a dispensation on the number of foreign players it can recruit, allowing up to 10, it’s understood investors are concerned how they will pay for such players.

They are also wary of other costs such as marketing a new rugby franchise in the AFL heartland.

Evans said the ARU should look at the AFL, who are providing hefty financial and player concessions for the start-up of new franchises Gold Coast and Western Sydney.

“The ARU are trying to get us to start it up without any start-up costs and at a reduced income stream,” Evans said.

Another VicSuper15 spokesman Travis Atkins said investors could be lured back if the ARU came to the table.

“Starting up a new team obviously makes it important that there’s enough funding to do it in terms of support from the governing body as well as private equity, it’s a commercial venture not philanthropy,” he said.

“We want to move forward but under reasonable and rational terms.”

Joining the competition in 2011, the window of opportunity to recruit a top-level coach and first-class players is quickly closing.

“We had a coach lined up, we had Michael Cheika lined up to come from Leinster and probably Rocky Elsom, I don’t know what’s going to happen now,” Evans said.

The Crowd Says:

2010-01-04T01:08:40+00:00

Siva Samoa

Guest


I have a funny feeling when this saga is over and the Rebels are up and running that they would have more club memberships than the Western Force in two years.

2010-01-03T21:35:14+00:00

Grandpabhaile

Guest


Report out today that Cheika is not signed up in any way to the Melbourne deal. He had one contact some months ago about it, and hasn't heard anything since. Looks like Evans might have been stretching the truth with his comments on Cheika being part of his deal.

2010-01-03T06:50:00+00:00

Angus

Guest


This is all very well but it was the ARU that pushed for the 15th side in the Competition. They are the same people that asked for the extended season , now they don't want to pay for it. The more private enterprise gets involved the more influence they have into running the game. They then start wanting to change the game so to make it more marketable. Sad days to come.

2010-01-02T05:49:49+00:00

DanielB

Guest


Siva - the storms losses were around the 3/4m mark, which is comparable to the lions, who lost 2m last year despite higher crowds and more members (the lions/bears were founded in 1987, having an 11 year headstart on the storm). And as said above, the losses weren't real 'losses' considering the value they bring to the game in tv rights and advertising. Besides, the aru should be putting their money towards the reds, who are in serious trouble in what should be a heartland area.

2010-01-02T04:45:24+00:00

rugbyfuture

Roar Guru


There is an idea that everything is in the short term, Investing initial capital is must to have long term gain, that was the case with the ARC and is now the fact with the Rebels. Also, the VRU are only their to supoort the flow down to the Grassroots level of the game, its the Vicsuper15 group, kevin Maloney and Harold Mitchell who are asking for it, the VRU just need the involvement and formation of the Teams

2010-01-02T04:40:19+00:00

Mister Football

Roar Guru


I think it was more than $4m

2010-01-02T04:36:25+00:00

stillmissit

Roar Guru


Some of 'You' guys - it never seems to amaze me. I think you live in chocolate castles with candy floss roofs. The ARU is cash strapped, the idea was always stated that the VRU would be able to finance this on their own and would only look to the ARU for a start. If 3m isnt a start in what was always going to be an expensive operation, then what is? The ARU was forced to take over the NSW RU when it went bust, I don't think Australian Rugby can stand another white elephant or more like a burning tyre. We burnt 4m (I think) on the ARC and everyone is jumping up and down about starting that up again. Mr McCawber rules seem to apply to most of you or beer money and champagne tastes take your pick. I wish it was your dough you were putting at risk. Where the hell is the money going to come from - D-heads

2009-12-31T23:51:14+00:00

Mister Football

Roar Guru


Here's the latest on this saga in the Australian: http://www.theaustralian.com.au/news/sport/aru-says-no-to-melbourne-backer/story-e6frg7o6-1225815109074 I get the impression that the ARU are deliberately mucking around to push through their own preferred arrangements - even though they are quoted as saying they do no want to run the cub - this is precisely where it's heading.

2009-12-31T04:04:12+00:00

rugbyfuture

Roar Guru


belgravia group, geoff lord, nothings been said since victoria won the franchise

2009-12-31T03:35:52+00:00

Siva Samoa

Guest


What happen to the guy that owns the Melbourne Victory A-League side ? Wasn't he intereted in the team from the beginning ?

2009-12-31T02:19:38+00:00

Mad Mex

Guest


Dean, I too am an AFL fan, a staunch Melburnian (though admittedly residing in Sin City at present) however your supposition that Melbourne is more League than Union smacks of ignorance. Union has been played in Melbourne for years and is well established in the private school sporting association. Yes, the Storm have had considerable success however one only needs to look back to the 80s and the swans to see how fickle a sporting public can be. That the storn have had considerable success and are still only averaging 10-11k is of concern. Problem is Victorians perceive league to be a sydney game(and us Mexicans have a deep rooted hatred of Sydney sports ;-) Union is recognised as an international game Yes, the new stadium is world class but aside from a novelty factor will that encourage more fans to support league? Particularly when in 2011 there will be a Super 15 side also playing at the stadium? I think not. Melburnians love thei sport however league has had 11 years there now and is still being propped up by News Ltd. I think the fact that the Rebels will play in a competition that will provide not only international competition but a strong state v state tribal asect will appeal to the psyche of Victorians and their quest for being recognised as the best. The Victory is a good analogy which I think will be reflected by the Rebels. Parochialism, coupled with a strong union history will see the Rebels more significantly supported than the Storm. Mind you, rugby needs to get its front office in order first!

2009-12-31T02:08:58+00:00

rugbyfuture

Roar Guru


i reckon the ARU will set a higher price, and the VicSuper15 will return, its a bluff on both parts and harold mitchell and kevin maloney seem to be greater stakeholders. the VicSuper15 team hold a more political image and argument than the others though, so we'll see.

2009-12-31T01:48:37+00:00

Brett McKay

Expert


yeah, good post here Pablo, this was pretty much my take on things as well. You've hit it on the head with "...the 'rugby' media aren’t asking the right questions." Quite. Smith, Growden, Harris, even Geddes (or whoever the token rugby writer in the Telegrowl is this week) all seem to be on holidays still, and the only reports about this Evans rant have been the wire feeds such as this original one this week. Dan Silkstone's offering yesterday (as posted by rugbyfuture) seems to be the best take on things, with comments and quotes from the ACTUAL financial backers and the ARU too. From here, this can either continue to be played out in the papers, or it'll just get resolved overnight. As I said above, if we view this saga as if the Rebels are a star player, and the ARU are the club for which he plays, it’s Contract Negotiations 101.

2009-12-31T01:15:01+00:00

Bay35Pablo

Roar Guru


When I read the original Fairfax article, which rugbyfuture posted above, it read like Evans was on his own and engaging in some posturing by media. Pothale's comments above support this was the case. My main question is why the TV revenue/grant issue wasn't sorted out long ago. Indeed, it should have been the first question asked and answered!!! Private equity is getting into this game to make money. No one gets into this game just for the love of the game, at least usually. People can point at football and blokes investing in A League clubs and making huge losses, but even that is because they are taking the long view. In 10 years time they are doubtless hoping that ACL and increased TV revenue will make their money back, and they can sell the club for a motza like has happened inj the EPL. As such, when private equity was buying in, the first question would be "what is the income stream to support this apart from my own cash?" The answer - the grant/cut from the ARU, which is what supports the other state union run franchises. The ARU seems to be intent on making sure this is less than the others, to ensure they have more money to spend on the grassroots of rugby. However, private equity will then be asking why they aren't getting the same income as the others. I am not sure if the $4.2m or so is the TV revenue cut, or the overall grant. Keep in mind each state union uses the overall grant to do everything, as they tend to draw little revenue from other sources (and even those are usually S14 related, like gate takings, merchandise, etc). Arguably, the Rebels should be getting the same TV cut as the others, but no more, as they aren't running any grassroots. The remainder of the money will go to the VRU for grassroots. With the QRU, RWA and NSWRU etc, the ARU throws it all in the same bucket and hands it to them. However, the VRU and the Rebels will be likely incurring duplicate costs, which all others teams won't have as they will be operating one combined office, not 2 like the Rebels and the VRU. As usual, the information on what is going on isn't clear enough to properly understand events, and the "rugby" media aren't asking the right questions. Far easier to engage in lazy sensationalism. After all, how many papers do you sell with the headline "Vic Rugby negotiations with ARU ticking along as expected, with some posturing by Evans"?

2009-12-31T00:54:54+00:00

AndyRoo

Roar Guru


I don't really care for Super Rugby any more but I still want them to do well in Melbourne. I think it’s important for my favorite codes (League and Football) that someone breaks the stranglehold on sports media over Melbourne that the AFL has, it has important repercussions for the rest of the country. The NRL has to get the Storm on TV at a decent time when kids can watch. If it’s 10am on a Sunday Morning so be it just get something sooner rather than later. I can’t see the ARU getting the Rebels on free to air TV in Melbourne but at least a credible franchise that grows grass roots participation in Victoria would be a nice result.

2009-12-31T00:38:58+00:00

Dogs Of War

Roar Guru


The only chance other codes have is to get on free to air at a decent hour.

2009-12-31T00:27:48+00:00

mahony

Guest


I agree. As a Sydney sider originally, I love a good game of League or Union, but after 8 years in Melbourne I can't say I see much of a long-term future for either code here. As I alluded to in another thread, the low overheads and strong grass-roots of football give it some long-term opportunity in Melbourne (indeed most places in Australia) - but it will be a slow, slow burn for football. Neither Rugby code can afford a slow burn approach as the Storm prove with every unappreciated trophy and the inverse relationship between trophies and the sort of debt News Limited are likely to disown in the near future. If I am wrong about this that is fine also - because unlike many Melbourne people, I can see the skill and beauty in rugby(s). It may not be my code of choice, but a reasonable examination of the game(s) leads one to this conclusion. The dominance of the AFL here is what keeps this city small - and any code which can broaden the horizons of the Melbourne community is good news IMO.

2009-12-30T21:12:52+00:00

Damo

Guest


Can't wait for the start of 2011. Maybe Lote will get a run? Maybe Slater will decide to play the international code? Maybe the Wallabies will have the Bledisloe? Maybe Wallaby fans will be pleased with their team? Maybe Quade will get a decent haircut? It's a long time before a S15 ref blows the whistle over a frosty footy in 2011.

2009-12-30T14:44:20+00:00

Derm

Roar Guru


Maybe they should all join Quade Cooper in counselling. Give them some time out to re-think their positions.

2009-12-30T14:35:40+00:00

rugbyfuture

Roar Guru


but are mark ella, travis atkins and the rest of the vicsuper15 team other than evans still gonna be involved?

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