Seven years after the messiest year in Australian rugby history that culminated in the culling of the Western Force, Rugby Australia is back to where it hoped it would never return: having to decide what to do with one of its five Super Rugby franchises.
In a situation that could prove to be even more damaging than the Wallabies’ calamitous 2023 season, Rugby Australia’s leadership team, headed by second-year chief executive Phil Waugh, will face the biggest test of their judgement over the next month of their administrative careers.
Indeed, the decision could either make or break Australian rugby, with the game currently spiralling out of control on and off the field.
Rugby Australia CEO Phil Waugh’s moment of truth is nearly upon us. (Photo by Mark Evans/Getty Images for Rugby Australia)
Having taken out an $80 million loan late last year to keep the game afloat, RA must find a minimum of $15m per year to service the game’s many mouths.
Where once the Australian Rugby Union only had three Super Rugby franchises under their banner, that’s expanded to five men’s and women’s sides following the return of the Force in 2020, the Wallaroos and the Australian men’s and women’s sevens squads. It’s believed the cost of running a Super Rugby franchise is anywhere between $12-14m, while a Super W team is an estimated $1m.
At the same time, RA’s broadcast deal has dropped substantially, with the $29m it receives from Nine Entertainment/Stan nearly less than half of the $50m it received from Foxtel during the previous SANZAAR agreement.
The numbers quite simply don’t add up, and with Australia’s Super Rugby franchises struggling and the Wallabies winning at less than 40 per cent over the past eight years, there are great fears RA won’t be able to generate the broadcast revenue they need to help service all the teams under their umbrella.
The looming broadcast deal, where negotiations have been underway for some time ahead of the next cycle which starts from 2026, comes at a time when three of the five Australian Super Rugby franchises are feeling the pinch.
Having had $1.7m taken away from them each year since 2020 as a necessity for RA to stay solvent during the Covid pandemic, the NSW Waratahs, ACT Brumbies and Rebels are struggling to stay afloat.
Three of Australia’s five Super Rugby franchises are feeling the pinch. (Photo by Jenny Evans/Getty Images)
But the Waratahs, who recently handed back their license to RA and exist in one of Australia’s two main breeding grounds for talent and in the biggest market, are secure for the aforementioned reasons despite having around $4m worth of debt.
The Brumbies’ future is less secure given they battle to draw a crowd of over 10,000 and owe RA an estimated $1.1m, but because they are Australia’s most successful Super Rugby franchise and continue to be the pace-setters, it’s unlikely they will be relocated.
The Rebels, meanwhile, have struggled on the field since 2011, struggle to draw a crowd and are starring down the barrel of $9m in debt.
It’s why they are set to slip into voluntary administration, with the Rebels, who have assembled one of their best-looking rosters this season, calling in Wexted Advisors on Thursday to assess the situation.
For now, the Rugby Union Players’ Association has assured the Rebels that their future and wages are secure for the 2024 season. Beyond that though, there have been no guarantees.
It leaves RA on the eve of the season, and broadcast negotiations continuing in the background over the next six months, with the difficult task of determining what to do with the Rebels?
While RA ultimately wants a national footprint, and the common consensus is the governing body is more likely to get a higher broadcast offer with five sides rather than four, something former RA chairman Hamish McLennan was adamant about, they are bleeding money.
RA is also juggling whether their high performance needs, in particular the Wallabies, could improve by returning to four Super Rugby franchises because the depth would not be spread as thin.
“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,” Waugh said late last year.
The Melbourne Rebels’ future is far from certain. Photo: Daniel Pockett/Getty Images
At the same time, the Victorian government has recognised the impact rugby union is having in the state, particularly with the strong and positive impact on Pacific Islanders in the community.
That impact has also flowed onto the national team, with several local ;players of Pacific Islands heritage, including captain Rob Leota, wearing the Wallabies jersey at last year’s World Cup.
Should the Rebels fall over at season’s end, what will that do for the game at large in Melbourne?
In the short term, the players’ contracts would likely be honoured elsewhere, with new homes found across Australia, like in the case of the Force seven years ago.
In the long term though, will it see more players and coaches forced to head overseas? Will young boys and girls turn to other sports instead?
Unlike the four-month circus that followed Cameron Clyne’s grossly inaccurate timeframe of either the Force or Rebels being culled in 2017 inside “48-72 hours” in April 2017, RA wants to move relatively quickly on determining the future of the Rebels.
Before that though, the governing body wants to get the complete financial picture before making its next move.
It stands to be Waugh’s most significant.
piru
Roar Rookie
That's as may be, but the intention is never to destroy Aussie rugby - NZ is well aware that a strong Australia is good for NZ.
jimmy jones
Roar Rookie
I was living across the ditch in early 2000s and distinctly remember the nz board blocking ARU's attempts to get an extra team. In the media they said ' why on earth should we help rugby grow and improve over there'.. thats why we had to wait until 2005 and thankfully Perth got a team which was great for the sport there and in the whole country but it could've been as early as 2001.
Feather Duster
Roar Rookie
Christy…get the facts right. The Broadcast deal from Nine/Stan delivered about the same amount as Fox plus it achieved free to air coverage for the game. Where the decline in broadcast revenue has come from this time around is the international broadcasters, particularly the UK….that declined significantly and has nothing to do with Foxtel.
LuckyPhil
Roar Rookie
Memories. I lived in Melbourne back in the 90's. They delayed the League State of Origin telecast to show a replay of the 1980 Ballarat Aussie Rules semi final.
Dionysus
Roar Rookie
" IMO Nine/Stan have been strange bedfellows, looking to pull the code down at every opportunity (and not making it easy for pubs and clubs to show it)." As an NRL fan, I warned / predicted that signing a deal with Nine was like signing a deal with the devil. Most NRL fans will tell you that they hate CH9 and would love to move to 7 or 10 or anyone really. There are some really shocking stories particularly if you live in Victoria where coverage was appalling even though they were showing that same content elsewhere in Australia. I remember one Grand Final when Melbourne won the Premiership, Coverage was abruptly terminated in Vic at the final whistle so that the could put a repeat of "Everybody loves Raymond". That same content was extended for another hour in other states. They do not see themselves as true partners and have screwed League something rotten over the years. So I think you would not be alone in that Opinion.
piru
Roar Rookie
Get Twiggy to make an ad egging them on "I bought a rugby team, why can't you? Are you chicken? bawk bawk bawk"
piru
Roar Rookie
That's certainly not the case.
Cec
Roar Rookie
D. Let me clarify my previous post. That question of whether Rebs are worth further investment is for RA not me. I should have further elaborated that point. I’m for keeping Rebs going and agree with your points above.
piru
Roar Rookie
Oh that's perfect, I salute you sir
piru
Roar Rookie
So now we are using pro teams to prop up Sydney club rugby? Isn't that why we're all here?
piru
Roar Rookie
Yeah I felt like Qlders were mostly behind it, the real issues seem to come from a few "places" where people have got a bit big for their boots
piru
Roar Rookie
Yeah that's the one - I understood it died after we were axed?
In From The Side
Roar Rookie
Spot on Piru the self interest and myopic view of people in charge is a huge part of the problem here.
Dionysus
Roar Rookie
Understand what you are saying but I would ask, is losing 20% of your super rugby competition, representation in your 2nd most populous area and probably negatively impacting your TV negotiations a good idea over a reportedly imediate need of just $500k. How does losing the rebels stack with RA's stated aim to use the 80m loan for growth ? How much input / support have the Rebels received to help them achieve a sustainable business model ? $500k is about 1/3rd of Suaalii's annual salary when he arrives next next year. Is this the real value of a club in Melbourne ? I have no doubt that the Rebels have failed to build a sustainable business model however any club is entitled to expect and plan for promised revenues to be delivered. RA has responsibilities here and I believe that it needs to be held to account.
andrewM
Roar Rookie
no problems with keeping the Rebels but it has to be owned and manged by RA. At least then the buck will stop with them. Ever since they were established it's been a revolving door of ownership and management and no accountability
andrewM
Roar Rookie
Hmm..Sounds like the Own the Force campaign, which raised $3-4 million which was then matched by Twiggy
Lichtfield
Roar Rookie
If we lose Melbourne from SR they might still be able to maintain at least some of that pathway with a presence in the GRR and hopefully, gradually built up local participation until they aren't so reliant on getting in players from outside....not sure if that is realistic but, with the article from Geoff suggesting an SR club requires annual revenues of $12 - 13m to run, maybe something on a smaller scale for development players (and a smaller budget) is more sustainable in the short term as we rebuild. Maybe the Victorian government decides to kick in a few million and we can paper over the cracks for another few years until we get the WC money and the BIL money and it will be all OK.
AndyS
Roar Rookie
Would certainly gel with what would constitute ‘planning’ for Rugby. . Along the same lines, I imagine the board probably has a big function planned for tomorrow night with lashings of Moet on hand, waiting for their numbers to be drawn. On form though, wouldn’t bet anyone has actually managed to organise all the minor details…
Lichtfield
Roar Rookie
I think NPC as well as, rather than replacement for, SR might good. While it's a bit pretentious of me to try spending someone else's money, I always hoped that Twiggy Forrest's GRR (perhaps not with all the funky rule changes though some of them have come in to SR and World Rugby anyway) could have stayed. It might be that we can't, for the moment, support all our teams in SR (at least from a financial perspective) but with SR being such a short season (and I think that is one of its limiting factors) we could potentially go from SR into GRR (or some form of it) with squads from the existing 5 Australian SR franchises and perhaps the players from Moana (or separately as Tonga and Samoa) and Fiji and perhaps some of the other sides they had at the time (Singapore, Hong Kong and Malaysia/SA sides). Probably our 5 sides plus the 3 - 5 from the Asia Pacific would be enough - a ten team comp for our players who don't make the Wallabies to play while the in bound tours and the Rugby Championship etc are on. Whether that fits with new models for the Pacific Rugby Championship (Japan, US plus Pacific teams) I don't know.
AndyS
Roar Rookie
Wouldn't you go for Margaret River Reds...?