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Fears for Rebels' future as debt threatens their Super Rugby existence - but CEO says 'we will be fine'

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19th December, 2023
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The future of the Melbourne Rebels is in serious doubt, with the Super Rugby franchise battling to stay financially afloat.

The Roar understands the Australian Super Rugby franchise has up to $9 million of debt – and there are great fears the sum of money is being considered irretrievable.

It’s believed the RA board was shown the Rebels’ finances last month at their November board meeting and were alarmed at the dire situation they saw.

It wasn’t long before whispers began that Australian rugby could return to four Super Rugby franchises by the time the next broadcast deal takes effect in 2026 – or even earlier.

Soon after, Hamish McLennan, who was one of the biggest advocates for Australia having five Super Rugby franchises for broadcast reasons and World Rugby promises regarding their legacy program and growing the game by hosting the 2027 and 2029 World Cups, was ousted.

In recent weeks RA’s new leadership has sought to play down the Rebels’ precarious position, but chief-executive Phil Waugh did leave their commitment up for interpretation by saying the governing body would look to do everything they could to help the national side’s on-field performances.

Taniela Tupou is the Rebels’ star signing. Photo: Melbourne Rebels

“We’ve got five teams and we’re committed to five teams,” Waugh said on Big Sports Breakfast radio recently.

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“I think then it’s about how creative we get in filling those teams to ensure we’ve got five competitive teams.

“Everything is on the table in terms of the growth of the Wallabies performances and what will feed through to us being number one or two in the world.”

Yet, it’s believed some at RA subscribe to the theory of “quality over quantity”.

It has left the Rebels in a precarious position, particularly given their current financial troubles, with the franchise needing to pay off large tax bills by early January and, as the Australian Financial Review revealed on Monday, one of their main sponsors, BRC Capital, facing solvency issues.

Despite the tough times, Rebels chief executive Baden Stephenson told News Corp he was confident of riding the storm.

“I’m absolutely not concerned about the Melbourne Rebels’ ongoing tenure. We’ve got big things coming in 2025 and 2027, we’ve got a lot to be proud of but also to improve on,” he said.

“But we will be fine.

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“We’ve been operating with reduced finances due to Covid since November 2020, it’s been challenging no doubt for all Super Rugby clubs. I am confident in the leadership and the board that I’ve got.

“We’re not sitting back and throwing our hands up saying ‘Poor us’. We only just announced a five-year partnership with La Trobe University [on Monday].”

An RA spokesperson told News Corp “it is our intent to continue to have a footprint there in both provincial and Test Rugby” in Victoria.

They added: “We’re working together to overcome the challenges that the Rebels are currently navigating.”

RA’s comments are hardly surprising given the Victorian Government is set to win the rights to host the World Cup final in 2027 after throwing millions at hosting the once-in-a-generation event.

The 84,000 fans that packed the MCG to see the Wallabies walloped by the All Blacks earlier this year only reaffirmed Melbourne’s ability to turn on an event.

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But Test rugby is one thing, Super Rugby is another.

And it’s believed following the embarrassment of withdrawing from hosting the Commonwealth Games, the Victorian Government could be questioning their commitment to the Rebels.  

Much could rest on the Rebels’ season in 2024 shaping any future decisions for the franchise, with general manager Nick Stiles building one of their strongest lists since their inception in 2011 on the back of luring Taniela Tupou and Lukhan Salakaia-Loto to Melbourne.

As well as signing several other internationals, the Rebels also have an impressive backroom building, too.

But curiously, the Rebels don’t have any players nor staff contracted beyond 2025.

Melbourne sources downplayed that in recent weeks, saying there were few players signed beyond 2025 in any Australian Super Rugby franchise beyond props Angus Bell and Allan Alaalatoa.

While in the past RA would have come to the rescue and helped pay off debt, that’s no longer the case.

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After failing to secure a $200 million private equity deal to help shore up the five Australian Super Rugby sides, RA recently was forced to take up another $80m loan deal to help keep them afloat before the British and Irish Lions tour Australia in 2025.

Despite that, RA has told the Super Rugby franchises they won’t reinstate the $1.7m payments they pulled following the onset of the Covid pandemic because, if they did, they would run the game into the ground.

Despite that, The Roar understands RA is $15m short of where they need to be to service the game properly, particularly with the women’s game, especially the XVs program, becoming more of a priority ahead of the 2029 World Cup.

Kevin Foote, Coach of the Rebels meets a young player during the round two Super Rugby Pacific match between Melbourne Rebels and Hurricanes at AAMI Park, on March 03, 2023, in Melbourne, Australia. (Photo by Kelly Defina/Getty Images)

It has RA looking at every avenue on how to prosper heading into the future.

Only a significant uplift from their next broadcast deal in 2026, – they currently get $29m from Nine Entertainment and Stan – will see RA meet their financial requirements. Whether or not the Rebels can reach that point remains to be seen.

The Rebels’ financial troubles come as both RA and the New Zealand Rugby look to sit down with their respective broadcasters in the first half of next year to firm up the future of Super Rugby from 2026 to 2030 and ask for more money.

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Although there is a long-term commitment to Super Rugby Pacific, the start of the new broadcast deal naturally shapes as the opportune time for any changes to the competition.

It comes as RA and their SANZAAR allies continue to talk about the future of Argentina after the Jaguares exited Super Rugby once Covid brought Super Rugby, as it was previously known, to an end.

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