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Will Raelene Castle survive the Folau scandal?

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Expert
16th May, 2019
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8035 Reads

Foxtel’s financial flop and more fallout from the Israel Folau saga; it’s a week that’s been far from rosy for Raelene Castle.

As the rugby world waited for the independent panel to hand down its punishment to Folau over his “Hell Awaits” social media posts, some dire news was announced on Monday morning by pay TV provider Foxtel, who contribute a big chunk of Rugby Australia’s broadcast revenue via their Fox Sports deals.

In a statement to the ASX, Foxtel’s controlling shareholder News Corp flagged cuts to the broadcaster’s spending on “non-marquee sporting content” due to a beastly financial loss of $417 million in 2018.

Although News Corp didn’t clarify what sports it considers “non-marquee sporting content”, the NRL, AFL and cricket are central to Foxtel’s future financial health, leaving rugby union and soccer as two major sports looking most vulnerable by likely cost-cutting at Fox Sports.

With rugby’s broadcast deals to expire at the end of 2020, negotiations have only recently kicked off on the next cycle of Super Rugby and Wallabies Tests.

The news would’ve been sobering for Rugby Australia boss Castle, who during her tenure has been unable to find ways to spark a stagnant code that is beset by falling crowds and below-par TV ratings.

Raelene Castle at a Rugby Australia press conference

Rugby Australia CEO Raelene Castle. (AAP Image/Daniel Munoz)

RA signed a five-year $285 million broadcast contract in 2016. That was a 148 per cent increase on TV revenue from the previous media rights deal of 2011-2015.

Castle and her crew at RA HQ might struggle to replicate their most recent deal, while the bumper increases achieved by other sports seems far-fetched for rugby.

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That’s a fiscal pain that will hit RA hard given broadcast revenues are so crucial to any sport’s bottom line these days.

But Castle might struggle to remain in the top job for the TV negotiations if reports regarding Folau’s contract are true.

For someone big on inclusion, it seems Castle and her contracting team neglected to include a key clause about social media manners in Folau’s $4-million deal.

The Sydney Morning Herald on Thursday made the claim that in the four-year contract Folau signed on October 10 last year, Rugby Australia had failed – despite the angst that his social media posts had caused a few months earlier – to insert a clause that would make the current saga less grey.

After realising their mistake, Castle apparently met with Folau in London in November, as the Wallabies prepared for their final spring tour Test against England, to try to get him to sign the additional paperwork.

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Folau palmed that offer away. And even though there was apparently a handshake agreement between Folau and Castle and with some padding in the form of RA’s code of conduct, it means that the current case is less cut-and-dried than it could’ve been.

That is, if Folau had signed the updated contract, RA would’ve felt much more confident in booting Folau out of the game for his “Hell Awaits” “drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolaters” post.

Israel Folau

Israel Folau (Anthony Au-Yeung/Getty Images)

The upshot is that the clause oversight might cost Rugby Australia big time – the type of coin that a financially-strained governing body can ill-afford to bleed given times are tough, and probably getting tougher.

“Castle and her executive team, including head of player contracting Nick Taylor, will not escape scrutiny for their contributions to the crisis that has gripped the code since Folau’s April 10 Instagram post condemning gay people to hell,” Georgina Robinson wrote in the SMH.

There’s a chance that RA might have to pay out the full $4 million to Folau, and there’s also the possibility that a settlement could cost a million-plus.

Any seven-figure amount wouldn’t be a good look for an organisation that cut the Western Force from Super Rugby in mid-2017, largely to save money.

Whether Folau is sacked, suspended or fined, Castle might have to face questions over why she failed to ensure the biggest player contract on the books wasn’t more watertight. Handshakes and goodwill unfortunately won’t get the job done.

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