The Australian Rugby Union (ARU) and Victorian Rugby Union (VRU) have started the process of selling off Super Rugby expansion franchise the Melbourne Rebels.
The two bodies, who own the side, announced on Friday they have entered into an exclusive Heads of Agreement with a Melbourne-based investment company to acquire all shares in the Melbourne Rebels Rugby Union Limited. That entity is the company that controls the Melbourne Rebels.
Imperium Group (ICG) is the company in talks with the ARU, and they would become sole owners of the Super Rugby club if the deal goes ahead.
It is a Group headed by former chairman and owner of A-League club Melbourne Heart Peter Sidwell.
The news comes during the Rebels’ most successful year in Super Rugby to date, in which they have recorded six wins from 11 matches and are still in the hunt for the finals series.
It’s been no secret the ARU has had a desire to sell the Rebels for the past couple of years.
If the proposal goes ahead the Melbourne Rebels Rugby Union and Victorian Rugby Union would remain separate entities.
ARU CEO, Bill Pulver said that talks with ICG have been occurring over the past months, and he believes they have reached an agreement on some key pillars of the sale.
“We are now progressing legal documentation and detailed due diligence is underway to finalise the transaction. We expect a formal transfer of the company will be completed by 30 June 2015,” Pulver said.
“We’re confident the proposed new ownership structure will strengthen the club, with the prospective owners committed to ensure the Melbourne Rebels can build on the on-field momentum of recent seasons and grow Rugby in Victoria more generally.”
Melbourne Rebels Chairman, Jonathan Ling, said the move was aimed at securing the future of the club.
“This transaction when completed will secure the financial future of the club. Our CEO, Peter Leahy, was charged by the Board to bring stability and certainty to the Club’s future on and off the field, and in entering into an agreement with the ICG he has delivered just that.
“While this is very good news for the club, our business partners, our fans and members, right now it’s business as usual, with our focus firmly on supporting the Rebels in their quest to be the best they can in the Asteron Life Super Rugby competition and make Melbourne truly proud.”
Hertryk
Guest
do not see why if the ARU do not provide any financial assistance like they do the the other super sides...... except the team in the West... Welcome to the Force world..
Ozee316
Guest
The founder of IGC is a New Zealander from Queenstown. Which begs the question, if there were NZ franchises available they would definitely attract interest. At the moment the Hurricanes, Blues and Chiefs are partially privatized. I understand the Crusaders are wholly owned by the Canterbury union and the Highlanders are yet to be partially privatized. I also agree that all Super franchises should eventually be privatized upto say 90% with the remaining 10% of each club held by NZR/ARU/SARU. This would mean that private capital can flow into the teams and invest new ideas and structures into the competition. We might get American and European owners investing in our game and players and it would mean they don't have to go up north. Super Rugby could reach its potential as a club competition.
Bakkies
Guest
In sport you need opposition to play against and sustainability. Crush your opposition there will be a poor competition. Only Nigel Wray and Bruce Craig don't realise this.
Lroy
Guest
The two WA clubs are owned by the WA Football league... they both make a ton of money and pay millions of dollars in dividends back to the the governing body ... this body then ploughs the money back into grass roots development... So the more successful these clubs are, the more resources directed toward WA footy... As good as this model is, I cant see how it would work for a rugby club in Melbourne, I think they would have to be given a free rein to run the business as they saw fit. You might provide some restrictions, like they must have a certain amount of Wallaby qualified players in the side, but if they aren't winning, they wont pull crowd or sponsorship. Youd imagine a winning side in Melbourne is going to need a few Kiwis and SAFFAS playing for it... So half the side would be Aussies, seven or eight would be ring ins.. I don't see how else they could do it. Thoughts?
AndyS
Guest
But those regulations have to be lawfully constructed. Salary caps and the like are open to challenge under restraint of trade, but are generally accepted if they are have greater benefits such as spreading talent around and evening the competition. But those beneficial effects have to be realised - if they have a salary cap but it is not having the required effect, it could well be challenged. And I wouldn't say the talent is particularly even at the moment...
Daz
Guest
It's a good tax write off as long as they keep making money somewhere else. If their real profit streams dry up that's when the s#%& will hit the fan. Eddie Groves bought the Bullets for the exact same reason but it all went pear shaped on the other side of the ledger and the Bullets no longer exist.
wardad
Guest
"These are'nt the droids we're looking for "....."He can go about his business" Even though a more wretched hive of scu.m and villainy would be hard to find no doubt ......
Bakkies
Guest
Like in business they have to follow regulations. In this case the ARU is a regulatory body. It's a good thing so they can focus on business development. Cipriani, Beale and O'Connor didn't work for them. RUPA are one of the reasons why Aus Rugby is in a mess.
AndyS
Guest
True Bakkies, but in order to be legal it has to be effective. I think the new owners and/or RUPA could probably mount a challenge to the Australian system on the grounds that it is neither even-handed nor spreading the talent around...
RobC
Roar Guru
Interesting news. The Rebs CEO is a banker, so its good to see he's using his network, to get things moving. I wonder though, about ICG which is a PE firm: - They seem to focus on consumer markets, which is a good thing. - Their portfolio has strong F&B hospitality focus - Hospitality has more predictable cycles in a well oiled market - Building Rugby's revenue base, is a little more fickle. I hope they have provisioned sufficient cash / reserves, whilst they sort out the revenue side. ARU. I hope they have done full due D / risk assessment. And not try to marry off the 'ugly' daughter - only to take her back after a domestic or divorce
Bakkies
Guest
Good luck bailing them out when they go belly up after the owners can't afford to subside unlimited while there is a small turnover financially.
Bakkies
Guest
jez exactly. It's irrelevant whether a club is union run or private they are limited to what they can spend on wages. That's why the LNR which runs the two top club competitions on behalf of the FFR has a salary cap and their clubs have to follow financial regulations. It's a good system otherwise you end up like England where clubs like Saracens have a debt of £45 million and are advocating to abolish the salary cap to compete with the French. Utter madness.
PeterK
Roar Guru
Agree, I should have said yes they will have to comply but I do not believe they should have to.
Bakkies
Guest
The ARU is still the governing body for the Australian Super Rugby sides, play in a competition that they are a partner of, put conditions in regards to the sale and also register their players. As there is no separate body representing and administering the Super Rugby teams like the Welsh have with the RRW (as far as I know they still have a salary cap), they have to bide by the ARU. It's no different to South Sydney with their ownership of a club affiliated with the NRL. The Saffies also have privatised sides and I think NZ also have private investment in theirs. The salary cap is there not just for financial reasons but also stop hoarding of players which leads to unbalanced teams. In sport you have to have opposition.
PeterK
Roar Guru
thats fine, at least keeps them in australia.
PeterK
Roar Guru
I do not see why if the ARU do not provide any financial assistance like they do the the other super sides. If all they get is a share of revenue from the broadcast deal then it should be up to them how much money they pump in at the risk of going broke. The salary cap is in place for financial reasons.
tc
Guest
ben Just like 99.9999999 percent of the world outside a few southern states in Australia that don't even know or care about AFL.
sheek
Roar Guru
Private ownership caused tremendous debate on The Roar some years back. I forget the finer details, but clearly, if Australian rugby is move forward, it needs private investment/ownership. I actually personally prefer the AFL model of fan-based ownership, but rugby simply lacks the numbers on the ground. So private equity is the way to go. However, I wouldn't agree to 100%. The controlling bodies, VRU, NSWRU, QRU, etc, still require some gravitas in the arrangement. Not an ideal situation, but then, rugby is hardly in an ideal place.....
sheek
Roar Guru
Imperium: power to command. So, is this like letting the lunatics (rebels) run the asylum (establishment)? Or, have I gone too deep??
Mad Mick
Guest
Here we go again with the corporates taking over rugby in an attempt to bring passion to a place that doesn't have it for rugby. Private money means corruption is not far away. We have already seen attempts to influence games by breaking acceptable conduct rules. Mark Ella is right. Rebels should play out of rural NSW where there are real rugby people who would support them and because the Waratahs whilst stealing the emblem of the NSWRU are not a representative team they are a franchise that is based in Sydney. They play as the Waratahs under false pretenses.