In a recent The Roar column on the state of Australian rugby, your correspondent made mention of the song Burning Down The House.
It was meant to be just a tongue-in-cheek reference to the 1980s Talking Heads hit. I had no idea at the time it was actually on the official playlist of the Melbourne Rebels board.
The Rebels are about to lob a Molotov cocktail into Rugby Australia HQ which could do just that.
Despite being insolvent with no capacity to repay $22 million in debts, the embattled Victorian Super Rugby franchise isn’t going down without a fight. And whether by design, or as unintended collateral damage, they could drag RA down with them.
From what we know, readers should have an insight tomorrow into the explosive allegations the Rebels are making against RA to support their claims they have, over several years, been short changed millions of dollars by the code’s governing body, which is why they claim to have gone broke.
Thursday is when – after holding a gun to the head of the RA since Friday, when they issued legal ultimatums to each individual board member – the Rebels have threatened to officially launch their legal proceedings in the Federal Court.
The problem for RA chief executive Phil Waugh, chairman Dan Herbert and president Joe Roff – all Wallaby legends in their own right – is that those fiery projectiles are about to be hurled by the Rebels when fortress RA is at its most vulnerable.
Rugby Australia President Joe Roff. (Photo by Matt King/Getty Images for Rugby Australia)
It might look like a David (Rebels) and Goliath (Rugby Australia) battle. However, it is the Rebels board who reportedly have a posse of silks working pro bono for them while Waugh, Herbert and Roff will presumably have to draw down even deeper into Rugby Australia’s $60 million overdraft facility to pay their legal bills in what could be an expensive, high-stakes legal stoush.
Israel Folau’s payout, David Pocock’s expensive sabbatical and the Eddie Jones coach contracting debacle all starved grassroots rugby in Australia of scarce financial resources. The Rebels’ street-wise silks could be about to inflict another layer of pain.
Those pro bono lawyers mean that for the Rebels, it’s like a penalty advantage hot on attack under the posts. That is, they’re playing with free money.
But it’s a final throw of the dice in the last chance saloon for the Melbourne club. If they can’t prove in court that RA should cough up, the Rebels will be wound up. The liquidator will then start forensically sifting through the club’s financial records – going back years – to get a clearer independent picture of how, when, and why the club came to be such a financial basket case. Think tax audit on steroids.
You’d have to presume, however, that in agreeing to act for the Rebels, the Melbourne silks would have seen a stronger case than lawyer Dennis Denuto’s famous courtroom summary for his client Darryl Kerrigan in The Castle: “In summing up it’s the constitution, it’s Mabo, it’s justice, it’s the law, it’s the vibe and, no that’s it, it’s the vibe. I rest my case.”
If only it was that funny.
For many Australian rugby fans, what’s unfolding will be seen as the chickens coming home to roost from the events of August the 22nd 2017. It was on that day then Australian Rugby Union chairman Cameron Clyne and his cohorts Brett Robinson and John Eales turned down a massive financial offer from Perth billionaire Andrew Forrest to spare the Western Force the axe from Super Rugby.
Twiggy, after flying from Perth to neutral territory in Adelaide to meet them at the Hilton hotel, argued the Rebels were more of a financial millstone for the ARU and offered to personally underwrite the Force’s financial future. Thanks, Clyne told Twiggy, but no thanks.
Andrew Forrest. (Photo by Daniel Carson/Getty Images)
As well-intentioned, widely-respected, honest and genuine as I understand she is, Rebels director Lyndsey Cattermole can argue till her cheeks are red that Twiggy’s version of events is wrong, and that due process was simply followed to keep the Rebels in the game in 2017 at the Force’s expense.
But just ask yourself this: would we even be having this conversation if the ARU had thought a little longer and harder about the compelling financial merits of Twiggy’s 2017 Adelaide offer? I think not.
What we do know for sure is that Twiggy wasn’t bluffing when he said he’d stand behind the Force. He did, and still is – and that’s why the Force are still standing.
As your columnist recently revealed, Phil Waugh reached out to Twiggy late last year to see whether the Perth billionaire was, some six years after the 2017 Adelaide meeting, still interested in RA’s rebuilding. His response was a Cameron Clyne-esque: “thanks Phil, but no thanks”.
Which pretty much sums up the whole Greek tragedy unfolding, doesn’t it?
GusTee
Roar Pro
8 days on from the Rebel's final demand but where are the Court proceedings?
Honest Max
Roar Rookie
Fair call, but that had naught to do with the shift from Ballymore a decade earlier.
Muglair
Roar Rookie
Must be pretty hot stuff. When does this get to court?
Muglair
Roar Rookie
There is no doubt a hotline from Moore Park to her and a few other journalists. That is valuable to them, so don't expect any analysis or interrogation of the party line. Hamish should have accepted the inevitable in 2020 and found a solution which left the five existing franchises intact and competing in a 3rd tier, and created two new teams to compete strongly for the SRP title. The ideal solution is for RA to run the SRP sides with a centralised commercial and administration structure, and seperate identities on the rugby side at franchise level. This is where we are heading now. This is sensible, but dangerous. The other half of Hamish's schemes was to do exactly that, hive professional rugby off from community rugby, leaving him running professional rugby. This is preferable for the business people running RA, they receive all of the income, and distribute only what they think they can afford to the community rugby body which has all of the complexities to deal with, will need to build a national coaching scheme, and refill all o the financial black homes created by ARU/RA over the last 25 years. If community rugby is successful, it will again be developing future test class players and regenerating interest in professional rugby, and rewarding RA with more revenues. For doing exactly nothing. RA has a legal obligation to all rugby in Australia from grassroots to elite professional.
JC
Roar Rookie
You’d hope the Rebels and RA can come to a sensible compromise that does not involve wasting scarce funds on lawyers. Of course, any reimbursement of withheld fees from RA to the Rebels would presumably have to be replicated to the other Super clubs, which RA can’t really afford. We really need a major Australian sponsor to step in and support Super Rugby Pacific. Beyond Buildcorp, I just can’t see who that might be. The good thing is that there are signs of life at QLD and NSW, our biggest markets. The Rebels too look as though they are building some cohesion with their two big new recruits, and hopefully the Brumbies will get over their blip. Super Rugby Pacific must take off this season for all sorts of reasons, including financial. BTW, to set a few things straight, RA did not pay Pocock to take a ‘expensive’ sabbatical. Reimbursement for his two-year contract was simply amortised across three years. A substantial component of his RA top-up was privately funded anyway. As for Folau, it’s almost certain that RA had insurance to cover this kind of event, which would have absorbed some of the cost. You could argue that Folau should never have been recontracted but once he was, RA and its insurers took the most prudent path to settle the ugly matter. Let’s hope Australian rugby’s decision-makers are entering a new era of fiscal responsibility — I just want to focus on the pitch!
JC
Roar Rookie
Hooper’s five-year Tahs/RA contract expired last year. He’s now contracted to the Sevens program.
Ballymore Brumby
Roar Pro
To quote from Wednesdays RiotAct article, Any chink in the armour you can imagine will be declared a sign of weakness by those seemingly campaigning for the Brumbies’ departure. Not being able to read the linked article due to the paywall, Halloran seems to carry on the same old narrative that's been trotted out the last few weeks about the Brumbies.
Boss man
Roar Rookie
I’ve tried to elaborate but the thought police won’t allow it
Train Without A Station
Roar Guru
The issue isn't that they shouldn't have a greater say. The issue is that combined they can block anything. So they have too much power.
Muglair
Roar Rookie
What happened yesterday? All that is in the public domain is not confined to the Rebels; withholding grants and having players in the Wallabies. Well the directors certainly won't be getting any money back, although dragging RA into the bog might well relieve their personal liability to the ATO. Ego is a huge issue around insolvency. First because directors will avoid public admission of insolvency until they have to, often when they run out of cash. Second it is never their fault. The only value add might be wiping out RA which is a case in point. They should have appointed an administrator in 2019 but I am guessing their egos got in the way there too. Now it is very much more complicated because of the PEP loan. In 2019 there was the time and space to restructure the game. Still Rennie, Marinos, Jones, the Wallabies, the players that missed selection due to the changes, and the entire rugby community had to endure 2023 to be shot of Hamish. Good things never come free.
Muglair
Roar Rookie
https://www.theaustralian.com.au/sport/rugby-union/brumbies-in-firing-line-if-super-rugby-contracts/news-story/51d7f51a65a7542688749972ff49dc5e Sorry for those paywalled. Typical RA. they could have and should have sorted this out in 2020 when NZRU insisted that the competition required only 2 or 3 Australian teams. Leadership, vision, strategic vision and negotiation skills were required. Consequently we bluffed our way, or bullied our way, into a ten team competition, subsequently expanded to 12. So we revert to bullying and manipulating franchises into weak positions. RA is losing its edge though, it now has to call in McKinsey to help. I have no doubt Australia should have fielded two teams in 2021, and since grown to three on the back of early domination of the competition. However I am not convinced that the best solution for Australian rugby was just promoting two or three existing franchises and excluding minor states where so much has been invested. Clearly now there will be no such sophisticated response and three teams in Perth, Sydney and Brisbane makes sense. However any solution that does not include a 3rd tier with teams from those franchises as well as the Rebels and Brumbies will cause ructions in rugby that will not be fixed. It will also choke off pathways and force players to leave, or retire early from club rugby. The lack of future opportunity will have a big impact on Shute Shield clubs. Players cannot justify the investment of time and risk of injury with little prospect of progress to higher levels. This might be a good thing or a bad thing. Training loads and requirements may be lowered and clubs, and players, will benefit from that. Conversely, the gap between club and professional rugby will widen, and the gap between club and SR widen. In the interview Waugh again highlights the gap between SR clubs and communities. Its nice to see him playing with his shiny new toy. Blindingly obvious to most of the rugby community for decades it is good to see RA getting up to speed. It is the primary cause of disengagement from rugby's largest customer segment and falling interest and revenues. Again, no solutions proffered, or any insights how reducing the number of teams, and increasing the intensity on players, will allow this to happen. I refuse to further insult the live entertainment industry by calling these guys clowns.
Muglair
Roar Rookie
Loved your bio which does cast some doubt on the integrity of your name. See the articles above (or below).
Muglair
Roar Rookie
Broke by 2014 or 2015
Muglair
Roar Rookie
https://www.theroar.com.au/2022/01/29/the-roar-rugby-project-part-9-almost-a-wrap/
Muglair
Roar Rookie
https://www.theroar.com.au/2020/06/15/simple-problems-complex-solutions-and-other-priorities/
Boss man
Roar Rookie
Incorrect Every super rugby contract is a three way contract
jimmy jones
Roar Rookie
Gd point.
Muglair
Roar Rookie
Anything happen today?
Ankle-tapped Waterboy
Roar Rookie
$80m - $55m = RA has a $25m line of credit. They are not bankrupt. "Refusal on principle" is not an option when a Court says "thou shalt". WBs will be competitive under Schmidt; he knows what he is doing. I foresee a return to Tier 1. The rest is your opinion.
Muglair
Roar Rookie
I cannot for the life of me understand how anyone things that there is any merit in the current RA management. The few good people there are not enough to transform the culture. A major cleanout is required. Look at the 23 recommendations post RWC. 20 of them are just the same couple of ideas recycled around, common sense, basic sports management and horrifying to think that there has been no strategic thinking about them before. Or a complete lack of execution. Board and management making decisions about how any Wallabies squad will be structured around leadership and roles is an extraordinary example of people who have demonstrated they have no idea, telling those tasked with doing it, how they will do it. Same goes for someone outside the Wallabies of the day what their legacy is to be. Transparency around selections is a bad idea. Rugby is not a game of rigid structures and metrics. Coaches will ultimately pay the price for selections that don't work. Introducing some sort of check list only invites litigation over selections. People need to stop romanticising around Forrest, there is a long history there, and a lot of current stuff which requires a bit further thought and analysis. Just because somebody is a billionaire does not mean they are qualified to do anything other than the thing that produced the billions. GRR was dropped like a hot potato because it wasn't needed any more? By who? I don't know the answer to this question, but has he continued to support rugby in the countries involved? Back on the RA. What is suppressed is all of the evidence, discussion and reasoning behind the recommendations. I was just catching up on the newspapers and see Waugh has retained McKinseys to advise on the future structure of rugby in this country. Ironically I was just mentioning the 1990s in another post. Listed companies retained consultants who would come in and advise to cut costs and retrench people, McKinseys prominent amongst them. This is where we are heading. RA has no idea about administering a national sport and no idea about rugby. Now they ask a firm of consultants to tell them. WTF? When the Rebels dust settles, the liquidation of RA may be a welcome relief.