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Franklin Roosevelt once said “virtues are lost in self interest as rivers are lost to the sea”.
For the last two decades Australian rugby’s rich soil and sediment has not been washed out to sea so much as it has been flushed down the toilet by the corrosive greed of our state unions, relentlessly sacrificing the common good in favour of their own short term interests.
The states’ litany of waste and failure is too extensive and depressing to detail here, but it is rearing its ugly head again today in the form of States opposing centralisation.
Every man and his dog knows that without centralisation Australian rugby will decay into oblivion and yet somehow the Brumbies and Reds continued to oppose reform.
The structure of Australian rugby is complicated but to grossly oversimplify it, at its core it works like this: its a federated system with 5 influential parties NSWRU (Waratahs), QRU (Reds), ACTRU (Brumbies), VRU (Rebels) and Rugby Australia (Wallabies).
For reference the Force/WA are run externally, the smaller Unions (Tas, NT and SA) aren’t strong enough to have an influential say, RUPA are also involved but not relevant to this article. Importantly, of these 5 teams only the Wallabies make money, the rest make a loss year on year and only survive because the wallabies use their profit to prop them up.
Issak Fines-Leleiwasa of the Western Force. (Photo by James Worsfold/Getty Images)
The state unions elect the RA board. Ultimately they set the policy and move the money, together the state unions effectively control RA and this is the problem – like ticks they bleed the RA dry, thieving their revenue and spitting out: dwindling crowds, pathetic tv ratings, poor fan engagement, low player participation, and countless trans-Tasman losses, all the while slowly paralysing the Wallabies.
If you’ve ever wondered why Rugby Australia seem so inept, its because the states have them working with one hand tied behind their back.
Their parasitic attitude is exemplified by Brumbies chairman Matt Nobbs who publicly trashed centralisation in a brazen display of his self interested opposition.
After leading his organisation to the brink of bankruptcy, Nobbs had the audacity to blame RA for not providing enough welfare. “The $1.7 million (of reduced funding) is the reason we are in financial difficulty” Nobbs said, referring to a reduction in funding from Rugby Australia after the pandemic.
Whilst initially it may appear reasonable, its important to note the Brumbies have still been given their share of broadcast revenue and the additional $1.7 million, amounts the Brumbies had nothing to do with generating (essentially welfare payments).
Could someone wake Milton Freidman from his grave to explain to Nobbs that in a market, making less money than you cost means your society doesn’t value you to the point where you should exist! Go out there and make some money, or centralise in order to get more funding!
Tom Wright of the Brumbies. (Photo by Mark Nolan/Getty Images)
While this attitude might appear harsh, our situation is beyond desperate and although this is a small example it does shed light on the darkness that poisons Australian rugby.
Centralisation will turn the structure on its head, instead of the parasitic states owning the national body, the national body would own the states. Not only will this streamline everything and eliminate waste but most fundamentally it would fix the incentive structure that is at the heart of our darkness.
The consequence of the current structure is that states are responsible for spending money but not earning it (since it’s the Wallabies that make all the money).
This structure allows the states to take money needed for grassroots, an NRC, player retention, expansion into state schools, etc… and line their own pockets with it instead. Like a trust fund child, they blow it all of course, then go ballistic if they don’t get more.
Our structure protects the states from the brutal economic pressures every other business on earth faces. The states are akin to government departments rather than businesses (which might explain their pathetic attitude).
Crucially, they don’t have any responsibility in generating or consequence for failing to generate revenue. This is the reason they sit idly and watch Super Rugby decline, players leave overseas, membership evaporate, sponsors abandon them, and even the demise of the Wallabies without doing anything about it, quite simply they have no need to, they get paid anyway.
At the end of the day it is the cold steel of financial failure which motivates reform and frankly the states have never felt it.
Rugby Australia CEO Phil Waugh (R) and Chairman Hamish McLennan. (Photo by Matt King/Getty Images for Rugby Australia)
Centralising would make the people who made the money the same as the people who spend the money, and in doing so fix the perverse incentive misalignment. It would end the competition between states for money and introduce in its place cooperation, but most importantly it would expose all of Australian rugby to the brutality of market forces and in doing so usher in drastic reform.
Word on the street is that the NSWRU and VRU are ready to centralise but the Brumbies and QRU continue holding out. The QRU and Brumbies have stated they support centralising of high performance but oppose handing over their “commercial or corporate functions”.
You may read this as positive but I would encourage you to analyse these actions with merciless honesty, and see it for the political gesturing it is. High performance is a symptom not a cause, and we are so far beyond treating symptoms it’s not funny.
The cause of course is our perverse incentive structure, and if you didn’t know it already incentives matter most!
The future of Australian rugby may well be decided in the coming months. If you think our position is dire now remember it can get a whole, whole lot worse than this.
Whoever you are and in whatever capacity you have, be it a corporate suite or the comments section of this article, please push the agenda of real centralisation, of proper incentive restructure, shed light on this darkness so that our proud code doesn’t fade into oblivion.
Join The Roar rugby editor Christy Doran, former Wallaby Matt Toomua and a cast of regular and special guests as they look at the biggest issues in the game on The Roar Rugby Podcast. If you’re looking for great odds on the next game check out Aussie bookmaker PlayUp. Chances are you’re about to lose. Set a deposit limit.