The Australian Rugby Union’s rejection of billionaire Andrew Forrest’s $50 million offer to save the Western Force was a backflip that came weeks after it told him such a figure would save the club, a Senate inquiry has heard.
The revelations were made by the mining magnate’s friend, former rugby professional and businessman John Welborn at a Senate hearing into the controversial axing of the Perth-based Force from Super Rugby.
If Forrest provided the money, the ARU said its board and CEO would also resign, he said.
Welborn said Forrest had called the ARU’s bluff.
He and Forrest asked ARU chairman Cameron Clyne what they could to save the Force and were given a list that was supposed to be impossible to meet.
That was: underwrite the Western Force for the next eight years, fund grassroots rugby by $6 million a year for eight years and compensate the Super Rugby competition by $20 million to cover the costs in keeping the Force.
The sport was struggling financially as well as on the field in Australia, following a disastrous year for the Super Rugby teams, they were told.
Welborn said that when Forrest told them he was willing to provide $50 million: “I think they were shocked when Andrew turned up willing to make … the largest philanthropic sporting donation of all time.”
They were told it was too late and RugbyWA should have got help earlier.
The sport’s financial problems and justification for dumping the Force were in the “single figure millions”.
“A very short period of time later a genuine and very committed offer of tens of millions of dollar was completely discounted … with no engagement,” he said.
“That stunned me from every perspective as a rugby follower also as a fiduciary responsibility from a director’s position.”
ARU chairman Cameron Clyne had even lectured Forrest on the challenges of running a business with revenue declining, despite the latter’s great success saving his company Fortescue when iron ore prices plunged, he said.
WA Liberal senator Linda Reynolds said during the hearing that the eastern states were sadly mistaken if they thought West Australian rugby fans would take the Force’s destruction lying down.
She also grilled former Melbourne Rebels CEO Peter Leahy but he requested the media and public leave when it came to discussing the confidential financial arrangements made when the club was taken over by private owner Andrew Cox in 2015.
piru
Roar Rookie
And today they announced they intend to drive RugbyWA into the ground with their legal costs. I assume Forrest will foot the bill, but you have to wonder what their motives are. RugbyWA took every avenue they could to protect the game in WA ARU.... didn't
Crazy Horse
Roar Pro
It's a bit unfortunate that the Senate has documents from that meeting. DeClyne was very upset about that. I don't think he gets it yet. There is no hiding from the Senate.
scottd
Guest
he knows all the numbers or so he says but he too seems to be having a small memory blank about a certain meeting held 8-10 days before the ARU signed the "Alliance" deal with the Force in 2016 AMAZING HOW MANY OF THESE GUYS JUST HAVE A BLANK FOR THAT MONTH
Crazy Horse
Roar Pro
http://www.theaustralian.com.au/sport/rugby-union/aru-already-in-talks-to-axe-team-when-force-licence-taken-over/news-story/ebc161f2e6f271bb851af54d906560eb
piru
Roar Rookie
Possibly a case of Force Fatigue, but interesting that there seems to be no reporting on Clyne's claim it was going to take 'well north of 100 million' to save the Force. That would mean the figures being thrown around have gone from $50 m, to $80m, to $100m + Would love to see this spreadsheet that keeps generating bigger and bigger numbers, I think one of their formulas might be off.
ForceFan
Guest
A couple of references for those who may be interested in reading what was actually said at the Senate Hearings rather the make believe that's been getting pushed by EARU/Rebels sycophants. http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22committees%2Fcommsen%2F73598356-3773-4e76-b3e8-1bb8240ce745%2F0000%22 http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22committees%2Fcommsen%2F7435c8f9-6600-4e48-9917-d1c713ce510f%2F0000%22 This still has a long way to play and it's not going to end like an episode of "happy families".
Crazy Horse
Roar Pro
Well said Gazza!
blindsid3
Roar Rookie
And yet Pulver testified that if there was “an insolvency event” the rebels could be cut. Seems to me all that the ARU had to do to cut the Rebels was stop the handouts, since without them both MRRU and the Imperium Group were insolvent.
blindsid3
Roar Rookie
But there is no speculation in Australian Schoolboys lock Nick Frost, son of current ARU staffer (and former retention manager!!) Steve Frost, signing with the Crusaders. Care to comment TWAS?
Hello
Roar Rookie
This looks likely to me rebel. He offerd the money for 5 years (all of the money) but not the 8 that was asked for
scottd
Guest
Ha , great connection mate. If it's true it's a beauty. If it's not true, it's still a beauty.
Ex force fan
Guest
Hell TWAS stop it, you are become more ridiculous with every post.
Bakkies
Guest
The ARU has been called back to front the Committee next Monday for a 90 minute session starting at 7:00 pm AEDT. Just bring it. On in Canberra Fionn if you wish to head down.
Ex force fan
Guest
Hope you are right.
Cliff (Bishkek)
Guest
TWAS, quite frankly, I would not want a Board or Board Member selected onto my Company Board if they had not done a clear due diligence on the "Negotiation of Forrest's Offer of $50 million". By God - that is a failing in itself. Not the refusal or Clyne's statement - but that it was never even analysed!!! You asre welcome to this ARU Board - TWAS. Good business nous they do not have
concerned supporter
Guest
Hi Cliff,you say, "Similarly I tend to get the feeling that Brett is turning into an “ARU Apologist”, but I may be wrong. Seems to too often, not question the actions of the board or protects them. Then that is his right but the sport is in trouble and disappearing." Brett is contracted by the ARU to write articles & publicise the NRC on the Roar.I think he does a brilliant job. Usually in Sydney, there is no other NRC publicity save from Brett. The ARU's Marketing & Publicity Department it seems does not like to spend money.
Timbo (L)
Roar Guru
I doubt that. Twiggy has been talking up sponsors and engaging large populations. In my opinion he is going to tap into a rich deposit. It could cost him a packet if he gets it wrong, but it could also turn him into a media Mogul if he does it Right. The IPL aren't exactly struggling for cash. I am starting a Rumor here, but do you think the resignation of Nev Power at FMG is coincidental? Do you think he is going to make a foray into sports media?
Timbo (L)
Roar Guru
There was no official price but the cost of buying out (breaching) the contract was $6 Million - the additional payments committed to for the duration. 11 Million was mentioned but the fact that the negotiations were never started, indicates that the ARU were never serious about that option.
Timbo (L)
Roar Guru
I could probably understand the $20 Mil, there would be a lot of costs in working around the problem. As to the $48m, this is just extortion, as it is unrelated to the SR franchise.
Timbo (L)
Roar Guru
I think we should be fair about the $30 million figure and only quote differential numbers. The other SR teams were given $15 Mil in the same period, that is just normal Funds dispersal. So the Rebs got an extra $15 Mil........ Still obscene numbers. How about the Salary cap workarounds (Topups). Now these are the ridiculous figures. What is the point in having a salary cap?