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.
Plowdog
Roar Rookie
It was $50m, and i'm doubtful that it was just a donation without a considerable set of conditions.
Train Without A Station
Roar Guru
Pro Bono: "denoting work undertaken without charge" No win no fee is not without charge. Many lawyers do work pro bono, because it is causes they care about.
Train Without A Station
Roar Guru
So hang on? You are criticising them for giving money to lawyers? Even though it's to respond to action? And now you are criticising them for not giving money to lawyers prior?
SlytheeTove
Roar Rookie
That would be contingency. Pro bono means for the good and is usual for charity and sometimes cause célèbre, such as this case. Maybe it is contingency, but we don't have any evidence of that.
Jacko
Roar Rookie
Yep there sure is. Not one of them is by reading between the lines tho. Words not written are just imagination.
Ankle-tapped Waterboy
Roar Rookie
Twiggy, yes. He's local. But not that American robber baron Murdoch.
Cec
Roar Rookie
Well Boss. They already announced their plight by handing their keys in to Hamish late last year.
Biscuit man
Roar Rookie
Good .I hope they bring RA down and we an start again . The current RA board is incompetent and should resign. Fingers crossed that Twiggy and Murdoch are behind the Rebels and can start a new Super Rugby Comp away from this disaster. It happened in the ARL in the late 90's and its overdue in Rugby Union in Australia.
ScrummyT
Roar Rookie
RoadBike that's what I'm thinking. It seems like a "if I'm going down so is everyone " action NZR is going to be licking its lips
Boss man
Roar Rookie
Probably in a worse financial position than the Rebels but shoosh don’t tell anyone .
Boss man
Roar Rookie
RA has been underwriting them ! That’s a laugh . The Rebels were not on a level playing field from day one and for its first few years received less in distributions than the other Super Rugby teams . You should do a comparison of how AFL treats its expansion teams compared to Rugby . If you’re not prepared to properly fund an expansion team and do everything possible to help them be a success, then don’t expand . The ARU at the time were happy to pocket the additional TV rights income an expanded comp generated but then do absolutely nothing to help the Rebels from day one . I could give you a very long list of impediments the ARU put in the way of the Rebels . I was there at the start . I’ve seeing this crap first hand . Good luck to the Rebels now in both their quest for survival and forcing the shit behaviour of the ARU / RA over many years into the public domain .
Train Without A Station
Roar Guru
Can you imagine the comments if the Force or Rebels (or even the Brumbies) had a 0 win season like they did though? A luxury other teams do not have.
Boss man
Roar Rookie
Let’s hope for the latter and then we start again without the incompetent old boys club
Doctordbx
Roar Rookie
It's certainly a messy situation which is why central contracting is a much better solution.
Around the Ankles
Roar Rookie
Yes, but is the asset money good? No point owning a loans in a business that can’t repay them.
ScottD
Roar Guru
More fully, RA walked away and told Rebels they wouldn't re-engage until there was an independent audit done. It was this audit that lead to a decision to enter voluntary administration which then left to the rumoured $10-12 m debt being revealed as a $22m debt. I think RA were absolutely right to demand the audit. It's a pity that they didn't have that discussion (and audit) a year earlier when there would have been a chance to save the Rebels and not end up in court. I'm also amazed that there isn't a requirement for RA to see the annual audited accounts of all the SR franchises. And if there is, why the whole question if "going concern" took so long to identify. I E. Not recognised by auditors in 2022.
ScottD
Roar Guru
NSW is an easy target but imo any blame attributable to them is indirect. There is plenty of blame/fault for everyone to have some. The one thing that I will say in NSW favour is that a couple of years ago they can out and said they were targeting to spend only 90% of their salary cap due to financial difficulties. I don’t know what they ended up spending but it at least showed some fiscal awareness which appears to be lacking elsewhere .
GusTee
Roar Pro
Piru – the problem with acting pro bono is that if, as a professional person, you don’t put a value on your time, no one else does. I have no doubt that the RA lawyers will be acting pursuant to their retainer arrangements and will expect to be paid. After all is said and done, this sort of thing is just another day at the office for them. Then as far as the Rebels are concerned, time given without charge by the top silks (barristers) is only part of the costs structure. The solicitors who are running the case are not likely to be acting pro bono . They will be racking up volumes of billable hours to get the matter together for the Court but always under the risk that with only $17k in the Rebels’ piggy bank, they are not likely to be paid if the Rebels lose: Unless someone somehow has guaranteed their fees.
jimmy jones
Roar Rookie
net positive
Leroy14
Roar Rookie
The incompetent rebels management toppling the incompetent RA.