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On Monday 20th November, in the wake of the removal of Hamish McLennan, newly minted Rugby Australia chairman, Daniel Herbert, told reporters; “We keep looking for a sugar hit, it’s just not coming. So, we need to put the foundations in, we need to get the right people in and then we need to get the unity.”
Referencing the central body’s relationship with the states, and the prospect of centralising high performance and commercial operations, Herbert added; “The principles are the same, we actually have to work in an integrated system, we can’t work in competition with each other.”
As everyone knows, Australian rugby’s year from hell didn’t end with McLennan’s ousting. In December, following Eddie Jones’ resignation, CEO Phil Waugh, trying to shift the focus towards the future, talked about how, “we want to be a game of integrity.”
Rugby Australia CEO Phil Waugh. (Photo by Chris Hyde/Getty Images)
“Unity”. “Integrity”. Noble words. Yet, just weeks later, Australian rugby once again finds itself wallowing in more shit than a pen full of laxative-fed pigs, with failure to walk the talk on unity and integrity right at the core.
Media reports over the last week highlighted the dire financial position of the Melbourne Rebels and, depending on the report, the prospect or “all but certain” outcome, that the Rebels will fold at any time between now and the start of the 2025 season.
Yet the core of this crisis is not about the Melbourne Rebels. It is about Australian rugby, and Rugby Australia’s ability to navigate the sport through difficult and highly uncertain times.
Australia’s five franchises operate with the same business model. There are some differences in emphasis and choices made at the margin, but the template is the same.
It costs approximately $12-$13m per year to run each franchise. The revenue side starts with Rugby Australia’s annual grant of $3.8m – essentially a share of money from broadcast rights – to which is added revenue from membership and sponsorship. Tepid match-day attendance and receipts (for all sides), means that when stadium hire and match-day operations are taken into account, gate income isn’t really a factor.
Did someone say $3.8m? Four years ago, franchises received an annual grant of $5.5m, which Rugby Australia cut by $1.7m during COVID. Despite franchises receiving assurances that funding would be restored to pre-COVID levels and, not unreasonably, budgeting on that basis, realisation has set in that this shortfall – now totalling $6.8m – will never be made up.
With the Rebels’ management and board coming under fire for financial mismanagement, despite the goalposts being moved, consider how other expansion clubs – the AFL’s Greater Western Sydney and Gold Coast Suns – receive annual grants of $25m each.
For the record, in 12 seasons, GWS’s best finish in the home-and-away season is 4th, while they made the final from sixth in 2019, and in 13 seasons the Suns have never finished better than 12th.
That context suggests that rugby fans shouldn’t be quite so quick to beat up on the Rebels and other Australian franchises for lack of on-field success; in a competition containing some of the best rugby franchises in the world, with the sport funding only 30% of their operations.
It is here where the central misunderstanding rears its head. The franchises (rightly) view this as Australian rugby’s problem. Never mind arguments about cutting a team or two; the sport does not generate enough money to independently sustain a fully professional competition that resembles the best leagues from around the world.
One solution – favoured by many in Australia – is to abandon Super Rugby in favour of a lower-level, even semi-professional, domestic league, akin to the NBL or soccer’s A-League, where Australia’s best players and coaches are employed overseas and don’t even participate.
That argument conveniently sidesteps the issue of Rugby Australia having signed a Super Rugby participation agreement until 2030, and assumes that there exists an administrator prepared to have as his or her legacy, the significant downgrading of rugby at professional level.
Keen to maintain the highest level of professional rugby as possible, the franchises believe they should continue to work together with Rugby Australia, and despite the commercial impediments, figure out how to do that.
For its part, Rugby Australia now seems to have determined that it is for each individual franchise, all faced with the same equation, to find their own solution. ‘Pay to play’, if you like.
That’s easier for some, than others. From a precarious financial position, the Reds, through establishment of a foundation which receives sizeable donations, and a helpful state government in Olympic Games mode, are now the most stable franchise.
The Western Force, ironically as a result of being punted from Super Rugby in 2017, enjoy a financial safety net offered by Andrew and Nicola Forrest, honouring their pledge to maintain a professional rugby presence in Western Australia.
Andrew Forrest. (Photo by Daniel Carson/Getty Images)
The Waratahs escaped the blowtorch now being applied to the Rebels by simply handing over their operations (and with it, washing hands of their considerable debt), to Rugby Australia. Call that the ‘if that’s what centralisation means, where do I sign?’ solution.
The Waratahs of course, had nothing to lose and all to gain by folding into Rugby Australia; no matter how bad things get, nobody is chopping rugby off in Sydney.
For the Rebels and Brumbies however, there are genuine concerns around competency and trust.
It is no surprise to hear reports of Rugby Australia, with a choppy reputation for managing its own affairs, struggling to manage the Waratahs as well. And with control of their franchise out of their hands, without the large Sydney base, what would guarantee the longevity of the Rebels and/or the Brumbies, should circumstances force Rugby Australia to move away from the five-franchise model?
Hence the situation today, where the Rebels and Brumbies are now forced to demonstrate how they can stay solvent under their own steam.
The Rebels thought they were in the process of working with Rugby Australia to do just that, in December, when details of those discussions – including private and personal information – were leaked to media.
And again last week; detail of what the Rebels believed were constructive and sensitive talks immediately found their way into the media, and were quickly turned into sensationalist headlines around the Rebels’ future being on a knife’s edge.
An already bad situation then turned worse when some outlets misconstrued Waugh’s statement that he couldn’t guarantee the Rebels’ participation in Super Rugby after 2024, to mean that 2024 was to be their final year.
What Waugh was saying was that, with a broadcast deal for beyond 2025 yet to be secured, Rugby Australia is today in no position to be guaranteeing any franchise anything.
RUPA head Justin Harrison reminded Rebels players on Thursday night, of the 2030 participation agreement. And with a Lions tour and a home World Cup falling within that period, and no sign of any alternative domestic competition in the offing, there is nothing to say Rugby Australia does not intend to honour this.
None of which solves the Rebels’ immediate problem. How to right their financial ship, and how to restore rugby as the focus?
Firstly, the appointment of an administrator will help buy breathing space and provide some clarity for creditors. Expect a determined Rebels board and a VIC state government favourably inclined towards rugby (a result of the hard work over many years by those board members), to more than hold its own at the negotiating table with Rugby Australia.
That should lead to a joint announcement this week, that speaks more conclusively, to a more stable future for the Rebels.
Frustratingly, this would get things back to where they were in December, where matters could have been worked through behind closed doors, as they were with the Waratahs, if not for the senseless and hurtful leaking.
The individuals involved in those leaks, and the reporters who rushed to amplify the half-truths and speculation extrapolated from those leaks, would do well to ponder the damage they have inflicted upon the Rebels and some of the individuals involved in the club, and their families.
With Australian rugby fans sick of playing second fiddle to New Zealand sides and demanding improved performances, the Rebels have worked extremely hard to build a franchise capable of delivering sustainable high performance.
A number of important players are currently in negotiation for 2025 and beyond. They have all expressed a willingness to stay, but it is only natural that such headlines, no matter how wrong, play on the minds of wives, girlfriends and player agents.
One of the key success indicators for sides like the Crusaders is their TWI (teamwork index) rating; something that the Rebels, by keeping its squad together and developing combinations, is striving to emulate. As detrimental as this situation is to the Rebels’ preparation for this season, it is the potential to derail the 2025 season and beyond that is particularly hurtful.
Board chairman Paul Docherty is a dedicated rugby man who has given countless hours and financial support to rugby in Victoria. For him to be personally leaked against – again, with half-truths and innuendo on matters unrelated to rugby – by faceless people within Rugby Australia, all for some perceived tactical advantage in negotiations, is shameful.
Brad Wilkin of the Rebels looks dejected after a try during the round 12 Super Rugby Pacific match between NSW Waratahs and Melbourne Rebels at Allianz Stadium, on May 13, 2023, in Sydney, Australia. (Photo by Mark Kolbe/Getty Images)
There are also serious implications for Rugby Australia’s leadership. There can be no doubt that the type of behaviour exhibited in this sorry episode is partly a result of McLennan normalising a way of conducting business within Rugby Australia.
It is ugly, disrespectful and counter-productive, and it needs to stop. And the bottom-feeders in the media who enable this behaviour, without ever pausing to think of the damage it causes, should reflect long and hard about their role.
Yes, there are considerable financial challenges ahead for the Rebels. But more so, this is a challenge for Phil Waugh, admittedly still relatively early in his tenure, to not only manage a precipitous financial situation, but to demonstrate a style of leadership that actually delivers on the promises made by he and Herbert. Unity. Integrity.