Where are Australian rugby's Nathan Tinklers?

Nathan Tinkler, flush with funds from a successful mining entrepreneurship and Novocastrian pride, is the great white hope of Newcastle sport. He has styled himself as Daddy Warbucks, dispensing largesse to those in need.

The most prominent recipient has been rugby league’s Knights, but his generosity has extended to the A-League’s Jets. I suspect every team down to the local bowling club is fantasising about catching Nathan’s attention.

Of course, Tinkler’s aren’t the first mining dollars to be invested in sport. The A League’s Gold Coast United are Clive Palmer’s team, literally, given run-ins with the FFA about capping crowds for games at Skilled Stadium.

But Tinkler and Palmer aren’t the first to create their live version of Fantasy Football Manager. England’s Premier League is the best example, with Roman Abramovich’s Chelsea (or Chelski, to some wits) and more recently Manchester City essentially buying the best talent available.

Manly has ben proppsed up in recent years by the Penns and Delmeges, and South Sydney’s rugby league team were apparently on their knees before Peter Holmes a Court and Russell Crowe rode to their rescue, even if it is yet to take effect on the pitch.

In the past few days come suggestions that Tony Page may be willing to bankroll an NRL team in Perth, a city with a six-year-old Super Rugby side that might suddenly feel nervous.

European rugby union has its own sugar daddies, especially in the French Top 14, where Toulon’s Mourad Boudjellal and Stade Francais’ Max Guazzini are the most prominent.

So where are Australian rugby’s equivalents?

Rugby likes to regard itself as the code for the big end of town. Surely, then, rich and successful private school boys with a few spare million could be expected to help kick the can?

While the relevant state unions have started to make moves to make this possible, such as the Waratahs separating the team from the NSWRU as a corporate entity, the only real private entity has been the Melbourne Rebels, and they still have some involvement from the VRU.

Rugby, and indeed most Australian sports, aren’t structured in a way that allows private individuals to take over teams and effectively bankroll them. Teams and sporting associations are usually member-based, meaning they are not for profit and run by members who elect officers and an executive committee.

Even if a generous billionaire wanted to rock up to the gates of the Reds, or even Randwick, offering buckets of cash, it would be difficult to see how the deal would be easily structured. A club can’t really sell a share in the current set-up, while a a sponsorship deal either will be far less than might be on offer, or essentially a gift with no real reward.

Southern District Rebels in Sydney’s Shute Shield has in recent years enjoyed increased sponsorship and support from mining magnate Kevin Maloney, who also supported the Reds, and that has allowed them both to be more competitive.

Further, in recent days it ha been announced that he has or will sign a significant sponsorship deal with the Waratahs.

However, while a sugar daddy like Nathan (or Kevin) could easily essentially buy a title in semi-pro/amateur Shute Shield, the question is whether they would front the cash to the club and just trust the club to spend it right, with or without some feedback and input.

Maloney, it was suggested, might be interested in private equity in the newly separate ‘Tahs, but as they say, if wishes were dollars…

Even if the structure is right, club members can see the price as insufficient for decades of building the club, volunteer hours, history and tradition. What value does that have, and once sold can you ever buy the club back?

The easiest way is probably to sell new entities, as was the case with the Melbourne Rebels (which Maloney missed out on being in the right syndicate for, leading to his support for the Reds). And with the benefit of hindsight perhaps Australian rugby missed its chance to harness private equity for rugby. That is, in the Australian Rugby Championship in 2007.

The A-League had been established several years before, and to a great degree went for a franchise model that could try to draw in private owners with the funds necessary to see the teams through the lean early years. Futher, other sports like basketball had long run their comps this way. While certain parameters were put in place, and there was a preference to ensure strong links to state or regional bodies, capturing private equity seemed a strong aim and one that has been achieved by the A-League.

The ARC had certain hoops to jump through, but more to get existing clubs together (in Sydney and Brisbane) or for Super rugby teams to meet. All those ARC teams were essentially joint ventures between existing clubs, or virtual subsidiaries of Super teams (meaning the relevant state union). No private equity in sight.

How different it might have been had an A-League style approach been taken. We might have seen teams paid for by private money, albeit it propped up by ARU money in the short term until it became viable (which the ARU, under new leader John O’Neill, didn’t due to leaking money – surprise, in the start up year) in the way the A-League is starting (kind of) to be.

The sad, or frightening, thing is that the guarantees Tinkler has provided to the Knights would appear to have been sufficient to keep the ARC running. Tinkler was a rugby fan and around in 2007, and talked to John O’Neill before he euthanised his predecessor’s creation.

Surely getting eight sugar daddies to share the burden would have been a cinch?

Of course, this all assumes that the ARU, state unions and teams would have been willing to give up enough control to let private equity in, or on acceptable terms. And that the private funders would be willing to do business with a sport renowned for its internal politics, and ability to run unions and clubs broke.

Or that the funders would invest in what is still referred to as a “third tier”, jammed in between Super rugby and internationals, always missing the main Wallaby squad, and playing 2nd fiddle to Super Rugby and any future expansion.

Nevertheless, with the benefit of 20/20 hindsight, it is possible to look back on the ARC and wonder what might have been had it been aimed at engaging private equity in Australian rugby, and helping fund what many (including this writer) believe is necessary to secure the depth of Australian rugby – a 3rd tier to provide the equivalent of NZ’s IPM Cup and South Africa’s Currie Cup.

Instead of having a competition that lasted one year, sucked several million out of ARU reserves with no prospect of recovery, and not given the chance to establish itself as a viable competition, we might have a comp funded by private equity providing significant backbone and depth to Australian rugby in the same way that the Currie Cup or Vodacom Cup does for South Africa, or the IPM Cup does for NZ.

Alas, that chance may never come again, even as recent noises from the ARU suggest it wishes to harness private equity to support the Super teams.

The Wallabies are the real cash cow for the ARU, with the state unions and Super teams having to be supported from the overall SANZAR cut. This is why private money is now so attractive. However, it reveals the scale of union against league or AFL, when union can only support 5 teams against the NRL’s and AFL’s numerous club and reserve sides.

Nevertheless, I can’t help but feel that private equity isn’t being properly courted by rugby, and that the ARC was both the perfect vehicle in many ways to attract it, and could have been made viable by it. Private equity might well now be recruited to ensure survival, when if done a few years ago it might have been building wider foundations for the sport instead.