Rugby Australia chief executive officer Raelene Castle is taking a 50 per cent pay cut and foreshadowed more cuts in other areas, but is adamant the code will survive into next year.
The COVID-19 pandemic has robbed RA of ongoing match day and broadcast revenue, causing further financial heartache after legal costs and the settlement of the Israel Folau saga.
At their annual general meeting on Monday, RA revealed a $9.4 million operating deficit for 2019.
Castle said there would be a professional game in 2021 but her main focus was on the next three months.
She revealed details of her personal sacrifice.
I”‘m taking a 50 per cent pay cut and the senior executives will be taking a 30 per cent pay cut,” Castle said after the AGM.
Asked if that was good enough if she would still earn over $400,000, Castle said: “All these things will be discussed on a monthly basis.
“I think that’s a pretty good start point to set an example around how important I think this issue is.”
She said new Wallabies coach Dave Rennie hadn’t featured in pay cut discussions as he hadn’t started the job yet.
Castle offered no figures about player pay cuts, saying she would meet with the Rugby Union Players Association (RUPA) on Tuesday.
“I said to RUPA that we wouldn’t come to the table with a fait accompli and that it’s going to be presented to them as a ‘take it or leave it,’” Castle said.
“That we would work through that scenario planning with RUPA, that’s a commitment I made to (RUPA CEO) Justin (Harrison) and I stand by that and we’ll start those discussions tomorrow.”
She said it was highly unlikely the three July home Tests would go ahead.
Outlining savings RA has already made, Castle hinted at further cost cuts, potentailly involving her staff.
“Over the last ten days we’ve done nothing but scenarios around how we could take cost out of the business and that includes all the different contracts we could stop,”‘ Castle said.
“Obviously with not flying there’s lots of travel savings, all the different things we’re not doing now because of the shutdown.
“There is no doubt across our business, including our staff, we’re going to have some very difficult conversations.”
She said the 2021 calendar could look different to what was currently planned and while RA was still working on retaining a four-team Super Rugby presence other options could be considered.
RA chairman Paul McLean admitted the code had been thrown into “unprecedented and extremely uncertain times” which would require significant cuts across the business for the sport to remain financially viable.
RA’s operating costs increased by $6.6 million in 2019, with the Folau legal case tipping the scales alongside extra community grants and player payments.
A dearth of domestic Tests in a World Cup year and the shutdown of the current Super Ruby season also damaged RA’s bottom line.
RA quoted a provisional $9.4 million loss in the absence of a fully audited financial account, which is not yet available due to complications stemming from the coronavirus.
Supercars chairman Peter Wiggs, Virgin Blue co-founder Brett Godfrey and Wallabies great Daniel Herbert were confirmed as new RA board members at the meeting.
joe
Guest
not a sound from the Bank jockeys about pay cuts to their exorbitant wages , or for that matter the public service mandarins . !!
Ex force fan
Guest
:laughing: "No-one saw this coming...' despite wo close calls with SARS and MERS....in the past decade. Scientists saw if coming and warned about a CoV outbreak, we just underestimated that the virus relying on our ability to react. China regulators have even stipulated that wild life should not be sold at markets like the the Wuhan Seafood market...etc
Ex force fan
Guest
Increase the proportion of her pay at risk so that she can share in the fortunes of RA.
Ex force fan
Guest
Revenue is not necessary a good indicator of the size, complexity and skill level required at leadership level or the value and CEO can add. If you can look at number of employees and the value of assets under RA's control, RA would struggle to justify $800k per year. Also the lack of significant portion of the pay that is performance base for a CEP is also a concern.
Tight-Head
Roar Rookie
Kafer the fox sports employee who only has a job as long as fox shows rugby had a rant about RA and castle, with his only concrete example of mismanagement under her being castle turning down his boss’ bid for the rugby rights.
Lara
Guest
Did Kafer just give RA a swift kick in the nuts.
Train Without A Station
Roar Guru
I suggest the 2018 report clarifies it. Page 5 of the Directors Report. Item 6 Events subsequent to the reporting date In the interval between the end of the financial year and the date of this report, no item, transaction or event of a material and unusual nature has arisen, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs in the Company in future financial years. I think we can all agree this is definitely a consideration.
Warwick Todd
Guest
Jacko do you remember this comment Jacko Guest June 23rd 2019 @ 1:16pm A fantastic effort Aus U20….Both sides looked to contain some future International stars and it shows the game still has some great strenths in Aus…Now if only the Muppets in head office could perform their tasks as well as this U20 side has done thru-out this tournament….Well done…
Pedro The Fisherman
Roar Rookie
Not to add any value laden judgements at all ... Perhaps you could look at what advice she had given to the Board and staff during this period?
Eagle
Roar Rookie
I don't know if was Vic only figures, but i remember reading that afl womens games had a bigger audience that super rugby ;) So my big question is, when this is all over, will there really be somebody wanting to pay top $ for super rugby anyway ?
Geoff Parkes
Expert
My understanding Val is that there is a 'think tank' being formed now, with people co-opted from outside RA. Thinking further about what there is to be worked on, it's not only scenarios about what/if/when, but almost certainly they will be working on financial contingencies with a range of potential lenders. It's very revealing to read today for example, about the number and calibre of people involved with the new urgent funding arrangement put in place between the AFL and the NAB and ANZ. Owning Marvel Stadium is now shown to be a masterstroke, which RA obviously can't match in terms of collateral. But they will be working on shoring up a range of options with potential backers incl World Rugby and their bankers, so that they are ready to go once they have an idea of what they have to work with - or at the least, will be able to put some bridging in place if required.
Jacko
Guest
List her failures and successes John.....I bet you have no idea...
Val Saunders
Guest
Thanks for your response Geoff as its always appreciated. Yes, retrenching staff is difficult, I've had to do it three times plus being on the end of it as well and this time there is really nowhere to go. Hence Jobkeeper which is massive plus. Maybe you are right and RA takes this time to look at how rugby in Australia is run, Kafer certainly seems to think it needs it. But the question then of course is - are the current people who got the game into trouble (even before Covid-19) the best people to sort out the problems? Let me say difficult times show the cracks in an organisation as never before (my experience) and in Australia RA is not alone in this!
Jacko
Guest
Thats the funny thing tho isnt it....Give credit to others for any good stuff and blame her for everything bad...
Jacko
Guest
Agree Pedro.....But re-asses it with Due diligence not with rumours runnning around on here....Start looking at her achievements that no other CEO of RA or ARU has ever achieved and add all the good in with the bad...see how much was actually her decision and how much was dictated to her ( Folau Saga ) and then make a well informed decision.
Train Without A Station
Roar Guru
The value would be based on their ratios. In 2018 RA posted a higher operating profit (as a percentage) than the NRL. You are looking at bulk numbers, not margins. RA basically has 5 teams, where the NRL has 16. Almost all 16 struggle financially in good times, because they aren't well supported. The NRL's market looks great because it has 16 sets of fans. But it also has 16 sets of mouths to feed.
Warwick Todd
Guest
The AFL has always operated with a 20% premium on broadcast revenue to the NRL and the NRL 500% to RA. If the NRL was to refinance with a corporate bond it could conceivably price the debt at market rates. RA would trade as a distressed asset. The point is if both the NRL and RA went into forced administration the restructuring of the NRL with it's well established, loyal market would be a much brighter proposition. Can RA reduce opex to improve margins? Can RA secure a reasonable broadcast deal? Will potential broadcasters have the confidence in projected revenue to offer RA a reasonable deal?
Geoff Parkes
Expert
In a broad sense what you're saying is true, Val. Most of RA's staff head home from today, ongoing operations are now essentially shut down. Sure it's their job, but having been through the process of shutting my own business down last week, doing all I could to insulate it beforehand, putting 22 staff off, some of whom won't qualify for govt assistance, perhaps I've got a more sympathetic understanding than some others of the personal toll that takes on CEO's, who, of course are just people, with families and obligations, like the rest of us. At a strategic level, RA is using this time to take a deep look at how rugby operates. Professional rugby will still exist when all of this is over, and RA's challenge will remain the same as it has since professionalism came in - how to effectively operate both the amateur/club/community game AND the professional game. What complicates this more is the global nature of the sport. Australia's professional game is tied to the fortunes of NZ and South Africa, and also to World Rugby and northern hemisphere nations with respect to what transpires with a global calendar. The various scenarios are multiple and complex, certainly when compared to the AFL and NRL.
Train Without A Station
Roar Guru
Nah. The AFL has that. The difference is the NRL has obligations of hundreds of millions. They are not in a better place than RA really.
Warwick Todd
Guest
The difference is the NRL has a rock solid fan base and a product that rates highly. Like I said RA was a financial basket case long before covid-19.