The reason for the rugby rage

Well Obamas salary was $522,000 and Turnbulls is (2016) $527,000 and here we have a $750,000 a year clown bringing about the demise of rugby Australia. Not a meaningless appointment if you are viewed as running the game in Australia successfully - and not meaningless if you can be viewed as responsible for the destruction of the game in Australia.

To clarify yet again, what I am saying is that bankruptcy would not be declared unless and until the receivers had cut all expenditures. Not a choice, it is what someone would do. That would obviously cause a lot of pain and aggravation, so perhaps best they manage their budget and don't go promising everything away before crying poor. If they do that, then they deserve anything they get, but there should be no risk of that based on the new revenues. On which I have to wonder whether you are being deliberately obtuse. The new deal was $285M over the duration of the contract. The money might be more or less in a given year, but over a five year period that is an average $30M+/yr more. If less tests meant it were only actually $24M in a particular year of five, then the other $6M would be seen in other years. That is how averages work. But putting all that aside, say it was "only" the $24M more. The key word is more, on a total turnover of $100-125M...so a 20-25% increase. I seriously doubt that would have been the expectation in any prior modelling; more like the win the lottery get out of jail scenario. Yet as soon as they get it they are bankrupt again? Sounds like the rugby version of Margaritaville to me - "$24M...and it's gone". So to correct your math - after posting a profit of $3.4M the total assets are around $5.5M. If they only post the same profits again for the next two years...then in each of those years they must have maintained the same extra contribution to the Rebels and repeated the $4M one-offs you previously identified as limiting the profit to that value. But neither of those should actually be the case, because one reduces rapidly and the other shouldn't be a recurring cost. So having sorted out the overhang issues in 2016, the only incremental expenditures should be the $10M to the SR teams and the extra $2M to the grassroots meaning they should bank on average over $9M extra per year. And while I agree about the desirability of accumulating some operating reserve, it still isn't bankruptcy. Especially not for a not-for-profit organisation. If you have mortgage repayments worth 25% of your wage, then just spend the rest each week on stuff (even important stuff), you aren't bankrupt. You are certainly at risk should you completely lose all of your income, you may even run an overdraft in big months, but otherwise you are tightening your belt rather than filing for insolvency. So yeah, maybe accumulate a bit of a buffer...lucky they just got a 25% pay rise.

There is plenty to be negative about the state of the game . It is clear the ARU ,( by its blundering through these difficult times without a plan ) is the most unprofessional sporting organization in Australia . The game clearly in big trouble and if there is not a very large amount of money coming into the game in the near future, then there can only be one action to take - pull out of the super rugby comp and go back to the Sydney and Brisbane comps. Players like Folau need their payments halved or more.

Because QLD, NSW and ACT would not allow it. Without at least 2 of them it cannot be achieved. What are the options that will increase revenue? As I noted, the things like increasing the length of the season would impact the Wallabies, the most profitable arm. NZ and SA will never agree to a universal cap, draft or equalization measures.

So you're Ignoring the revenue increasing options. If they were set on centralisation why privatise the Rebels not long ago. You're just msking stuff up.

Yes $30M for TV money. But they only have $24M extra total revenue. Which is what they need to live on. I think you will find that is not during RWC years. TV revenue drops due to less games in the more lucrative Rugby Championship. At least it did last RWC. The other factor is sponsorship and home test revenue drops those years due to no June tests and only 2.5 home tests rather than the usual 6.5 (Home Bled every 2nd year) If you are saying that grassroots expenditure is not fixed, and therefore they can cut it if things get tight, then you are advocating it saying that it's the way to avoid bankruptcy. After posting a profit of $3.4M the total assets are around $5.5M. If they post a similar profit in the next 2 years that will then be $12.3M. If they lost around $10M in 2019 again that will leave them with $2.2M. Basically what they had at the end of 2015 - close to bankruptcy. If having around 2% of annual expenditure in assets is not close to bankruptcy for an organisation, I don't know what is.

No, $30M+ more (http://www.rugby.com.au/news/2016/01/31/australian-rugby-announces-new-media-rights-arrangements-for-2016-2020). $24M was a comparison between total revenues in two particular years, which happened to have a different number of test matches - specifically, one less Bledisloe. The new broadcasting deal itself went from $23M to $57M. That extra is over $30M a year, each year, including RWC years. Which means that whatever they were doing before, they are now doing with about $11M/yr of spare revenue after having already given the SR teams a solid bump. So between now and 2020, that is $44M extra to save or spend, over and above whatever level of grassroots expenditure and member distributions were being made prior to the new deal. So no, bankruptcy isn't imminent. Not having enough to do all the things they might like to do might be imminent, but that is always the case. Bankruptcy means you cannot meet hard and fast contractual and legal commitments, resulting in forced sales of assets, liens on future revenues, trustees running the business, potentially not being allowed to trade (play?) and all sorts of auditing. It does not mean you merely can't dish out the money as you normally would, or have promised, or would like. And I think most folk know that, but wave it around like a big boogie monster because it sounds much worse than merely running out of budget. For someone who often complains about people putting words in his mouth, I'm a little disappointed to see you doing it. I didn't say they should give the grassroots less - what I said was that they would have to be giving both them and the member unions literally nothing, and possibly even the SR teams as well, and then still run out of money before they would be designated as bankrupt. So with none of that remotely imminent, and with the surplus from the new deal, there is absolutely no way that "the code would potentially reach bankruptcy before the next TV deal". If you actually believed that, then it would be you advocating that they cut the existing spending and spend none of the new deal to avoid the risk. Personally, I'm good with them throwing some more at the grassroots; there isn't a better use for the money IMO. Even doing so, the numbers still say to me that they are actually in a very solid place relative to the same point in the last contract. They proclaimed that very fact long and loud themselves when they signed the deal. If they are now saying the opposite after only a year, then they really do all need to be removed. They actually seem to have done well, which is what makes it so hard to credit that they have so quickly and collectively trashed the product to their market...wonder what interest they will get from Europe next time after this farce?

The ARU board make somewhere between $0 and $20,000 per year. This would be the most meaningless appointment in any of their careers looking at their individual resumes. They professionally and financially have almost nothing to gain from this job. The only person who has gained anything is Pulver, and all he has gained is his salary. He is the highest paid person at the ARU and makes approx $750,000. No multi million dollar salaries. Either please know the facts when you post, or f--- off. The situation is bad enough without people making blatant false statements that can generate more negativity.

Were SA and NZ on board with that? If not then it wasn't an alternative...

You're the first person I've seen to propose we spend less on grassroots...

No. $24M more. The grassroots expenditure is not binding annually. But it's essential to try and build a future fan base. Read the all annual reports, read the cash reserves positions and tell me that bankruptcy isn't imminent. They will lose $10M in a World Cup year due to drop in income and the RWC participation fee not making up for it. If they post $3.4M a year, they will basically be where they were financially at the end of 2015, at the end of the 2019 RWC.

It has been the ARU's desire to implement centralisation for almost as long as Pulver has been there. Perhaps before his commencement even. All the teams have fought against central contracting and the ARU can't enforce it without their agreement. Next option?

But there's another possibility that nobody is willing to consider. That RugbyWA ultimately does not have a case. I'm not at all saying the ARU are in the right and RugbyWA is in the wrong. There is nothing to suggest either. From what I've read I think I understand what the ARU intend to argue. Which is that the alliance agreement guaranteed the participation of the Force under the duration of the current broadcast deal and that this is now a different broadcast deal. If this is the case obviously RWA would be arguing it is not. Now that perhaps explains the convoluted process where it was resolved with broadcasters and SANZAAR announced a team would be cut in Aus, before it as decided who. But this is all speculation by a bunch of people who have no idea what the alliance agreement states. It could state that the Force are guaranteed in Super 18 format and they'd have no case. It could also blanket guarantee them in any format until 2020 and they'd have a strong case. But ultimately none of us know, but plenty are happy to take a side on who supposedly has the best case based on their existing biases.

So to summarise: $30M more per year (apparently my memory served, surprisingly) Less the GPR = $21M $10M to the SR clubs...assume that is a permanent change, fair enough $4M to the grassroots directly and via the states, nice but discretionary Maybe $4M in one-offs, even assuming they would be entirely attributable to the additional income $3M left over to contribute to general revenue. So assuming the $10M is somehow contractual and actionable, that still leaves $11M that is discretionary and unattributed year to year. It is nice they could bung a bunch of money to the grass roots, but it is not a binding commitment that means the code might go bankrupt. Try telling the receiver that you have some money, but it can't be touched because you promised to take the kids to Dreamworld. As I noted, if they over-promise there is the risk that they might be caught short, but certainly not "bankrupt". Any more than they were bankrupt when they ran a $2.6M deficit. In practice, after presumably binding commitments, they would seem to be running a sizable surplus even with five teams - over 5% even if the significant increase in expenditure to the grassroots were locked in. Which is largely as expected and as proclaimed when the deal came down. I'm sure they all have their various reasons for fingering a team for the high jump, but more money to the grassroots and impending bankruptcy are neither of them - even with five teams, the new deal means they are already getting a big chunk of one and could/should be rapidly building a buffer against the other.

in reality like most corporates in Australia Ceo;s and boards are only concerned with their multi million dollar annual salaries and have very little concern for anything else so why would the ARU be different .

O'Neill likes to take potshots at then ACTRU for undermining him in his first stint as CEO. O'Neill reckons is due to the fact that he had 'the temerity to raise the issue of the Brumbies location if the 4th team didn't go through.' Of course the ACTRU would be right to be annoyed at that but that wasn't the reason. The ACTRU were annoyed that they weren't getting recognition at ARU level despite being the top side and that they also didn't have a representative on the ARU board. Back then ACT were represented by the combined states representative

Many of the suggestions aim to increase competitiveness of teams and thereby increase revenue by making matches more attractive. Those are the things to look at first. If they fail to increase revenue then your question becomes relevant. You'd first look at centralised contracting and sharing of overheads. Centralised contracting can enable the loss of players to be spread across performance groups rather than loosing all the stars while keeping all players below a certain level, thereby aleviating the feeling that SR only has second rate players. There are all sorts of things to try.

Unanimous, you make those points persuasivly. But perhaps you could go two ways on this: either the ARU didn't understand their own constitution, or their recent agreements with RugbyWA or with Cox's Rebels, and had to have it pointed out to them by VicRugby Chairman Tim North QC, or they did know about all of it and decided to go ahead with it anyway, in the hope they could get it through. Either way they look hopeless as managers and custodians of the sport. Also, probably somewhere in there is the reason for Rob Clarke's early departure.

Kicked, Nice piece, I am a bit like you, if the Force goes, I want Perth Spirit to be competing in a full season NRC comp that I can get behind. The ARU haven't even hinted at an olive branch to give to the rabid supporters over here. We are looking into an abyss and it has made us angry, If we could see a bridge being built to cross it, it might be different. One of my centers of anger revolve around my pet idea which is a merger. The ARU response is along the lines and as detailed as "Nope!". If they had responded with: we have discussed this option and looked at the financing and.... and...it wasn't feasible for reasons..... It would at least show that they care and have been looking into lots of possible solutions. Instead, we are left with no option but to put on our tinfoil hats and conclude that the Sydney run ARU have decided to torpedo HMAS Westralia and pillage all of its ammunition and treasure for itself. True or not, the optics are terrible. We see the ARU paying the Tahs an extra $1.5 Mil/year so they can have the 1/2 a player that is Israel Folau and $1Mil per year so the Reds can have Carmichael Hunt. The Rebels get an extra $1 Mil because Andrew Cox knows how to write a decent contract. I am afraid to hear how much they are paying Beal to return. $3.5 Mil would go a long way to keep the Force solvent. I fell like the ARU dumped an out of favor Tatafu Polota-Nau and the expenses associated with his contract on the Force so they could make way for their Heir Apparent - Latu. I am sure Heath Tessman and Harry Scoble weren't consulted about this decision. It has backfired a little, Taf is doing such a great job on the field and we have adopted him as our own, Fro and all. You should have heard the jubilant applause as he came off after his 65 minute stint against the Lions.

Crazy Horse, I can guarantee that most Sydneysiders don't want WF or MR to be culled. They main exception if NSW Greedy Head Honcho, Mr Roger Davis. Don't the majority of the ARU Board come from Queensland?