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Civil war is about to erupt in Australian rugby, with the Melbourne Rebels to sue Rugby Australia as the embattled Super Rugby franchise fights to stay alive, reports Christy Doran and Mark Drummond.
As foreshadowed by The Roar on Monday, the Rebels board has served notice to launch legal proceedings against the directors of Rugby Australia and President Joe Roff. Details of the legal claims are expected to be revealed by Thursday.
It’s believed the Rebels pulled the trigger and served RA with notice on Friday in Melbourne – the same day the city was hosting the three-day, six-match Super Round.
The Melbourne Rebels are set to sue Rugby Australia. (Photo by Daniel Pockett/Getty Images for Rugby Australia)
As a result of the Rebels’ intentions to sue the governing body, Rugby Victoria President Neil Hay was asked not to attend RA’s two-day Australian Rugby Summit.
As one administrator said: “They’re going down swinging.”
Another said RA should be “nervous”.
The legal proceedings launched against RA were prepared by three prominent Melbourne silks thought to be acting pro bono for the Rebels in an attempt to recover up to $8 million the club claims it is owed by the governing body for allegedly starving the club of $6 million funding for several years and $2 million to cover the wage costs of Rebels players on Wallabies’ duty.
The stakes are high for RA in the looming legal court showdown because if the Rebels are successful in proving their underfunding claim in the courts, it could open the floodgates for the other Super Rugby franchises to follow suit and make their own claims. If that was to occur, RA’s claims of a “golden decade” would blow up in smoke.
It comes after the Rebels were successful last month in staving off a move by RA to put the club into liquidation, with Federal Court Justice Catherine Button giving the Rebels a 60-day extension to keep in place the voluntary administrators the club appointed in January.
The Melbourne Rebels celebrated their first win of the Super Rugby season against the Western Force last Friday – the same day the Super Rugby franchise informed Rugby Australia they planned to sue them. (Photo by Darrian Traynor/Getty Images)
The Rebels, who celebrated their first win of the season on Friday, have debts of $22 million, about half of which is owed to the Australian Taxation Office, with little in the way of assets.
At the same time RA is hoping to turn around their on-field performance following last year’s Wallabies disaster, the cash-strapped union is currently battling to stay financially afloat.
RA board director Matthew Hanning has been tasked with removing costs out of the game.
Last December, the governing body took out an $80 million flexible loan deal with Pacific Equity Partners (PEP) to try and drive the game forward ahead of hosting the 2027 Rugby World Cup. The Wallabies brand was used as collateral.
It’s believed half that figure has been used to pay of RA’s previous loan with Ares Management.
If the Rebels were to be successful, RA’s loan would quickly dry up.
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.