As the Melbourne Rebels prepare to take to the field for Friday night’s important home clash against the second-placed Blues, the Super Rugby’s franchise could be decided just hours before with creditors to vote on whether to liquidate the debt-ridden club.
More than two months after the Rebels fell into voluntary administration, a creditors meeting is slated for 2pm AEST to vote on a rescue deal to save the Super Rugby franchise.
In his report last week, PwC voluntary administrator Stephen Longley recommended that creditors, including the Australian Tax Office, who are owed a total of $23.1 million, accept a proposal by a private investor group that includes current directors.
Rebels directors have proposed a Deed Of Company Arrangement (DOCA), which would guarantee employees 100 per cent of their entitlements, but leave unsecured creditors with as little as 15 cents to the dollar.
The Melbourne Rebels’ future could be decided by Friday afternoon. (Photo by Kai Schwoerer/Getty Images)
The DOCA is dependent upon Rugby Australia handing the Super Rugby participation licence to the new consortium, who are said to be on their way to raising 20-30 million for the club over the next five years.
However, according to the Australian Financial Review, the governing body will vote against the proposed DOCA and seek to wind up the Super Rugby franchise after operating insolvent for more than five years.
According to the AFR, a letter sent from the governing body to PwC claims that the administrators were biased towards its former directors.
It adds that the report had “not included its defence to suggestions it is liable for $8.1m in funding and unpaid PAYG tax liabilities.”
Also, “creditors could receive more money from liquidation, even if the distribution of that money could take up to four years.”
Regardless of whether the DOCA is approved or not, a date in the courts is likely.
As the Rebels directors push for the DOCA to be accepted, a recently announced private equity-backed consortium, led by business heavyweight Leigh Clifford, the father of former director Georgia Widdup, hopes to raise up to $30m to invest in the club’s future.
Part of the plan is to move the franchise’s home ground to Melbourne’s west and share the facility with A-League club Western United from 2027.
After weeks of claims neither party was willing to sit down and properly run through a detailed plan of how any proposal could work, Clifford and Widdup met with RA on Tuesday to discuss it.
It was the first time the parties met since RA accused the Rebels directors of misusing funds meant for tax in a statement last week off the back of PwC’s report.
In a statement, RA claimed: “[The Rebels] … misused these funds and did not pay them to the ATO, which was the intended purpose.”
Rugby Australia CEO Phil Waugh told reporters on Monday a decision on the Melbourne Rebels’ future needed to be made soon. (Photo by Mark Evans/Getty Images for Rugby Australia)
Maintaining a Super Rugby presence in Melbourne is said to be supported by the Victorian Government, with crucial funding ahead of the 2027 Rugby World Cup potentially on the line. Melbourne was the favourite to host the final at the MCG.
Yet, according to RA chairman Daniel Herbert, the governing body believes they have been “living beyond our means as a game” for too long and says the continual bailing out of the Super Rugby franchise will compromise the rest of the game, including women’s rugby.
Currently, RA has propped up the club this season, taking over the wages bill for players and staff.
RA chief executive Phil Waugh said at Monday’s Annual General Meeting, where the governing body announced a $9.2m deficit in 2023, a decision was needed soon to provide everyone clarity.
“We understand the urgency and the time pressure given staff finish it at the end of June,” Waugh said.
“Players need certainty, as do staff for 2025 and beyond. So I don’t want to anchor ourselves to a date except for the fact that we need to acknowledge that [a decision needs to be made] the sooner the better.”
It’s believed Victorian Sports Minister Steve Dimopoulos phoned Herbert late last week to discuss the implications of withdrawing the Rebels from the Super Rugby competition.
On Wednesday, Widdup acknowledged the Rebels needed a sustainable future but said rugby’s presence would die in Victoria without an elite professional team.
“The Melbourne Rebels thanks the Victorian Government for their strong support and we look forward to working with Rugby Australia as we seek to establish the women’s and men’s team at their exciting new home in Tarneit in Melbourne’s West,” she said in a statement.
“Like the Victorian Government, all supporters of the Melbourne Rebels are passionate and committed to ensuring a thriving Rugby in this state. We recognise that that cannot happen unless we have a Melbourne team competing in the national competition.
“None of us want to kill Rugby in Victoria, but that will be the outcome if the Rebels don’t exist and we are fighting hard, along with the Victorian Government, to ensure that does not happen.
“We agree with Rugby Australia that the Melbourne Rebels need a sustainable financial model to set them up for future and we have that with the Consortium plan. It is a credible and common sense plan.
“It is an exciting vision to grow the sport of rugby in the fastest growing municipality in Australia. The Tarneit Masterplan is a new financial model for our club, teams, our players and our fans that is sustainable and embraces our future, not our past.”
Kevin Foote said he’s unsure if players will know the result of a creditors vote on Friday afternoon. (Photo by Kelly Defina/Getty Images)
The high-stakes Friday afternoon vote comes as the Rebels prepare to take on the Blues at AAMI Park in round 11 of the competition later that evening.
Currently sitting fifth on 24 points, ten points clear of ninth-placed Moana Pasifika, Melbourne is on track to make the finals for the first time in their history. Kevin Foote’s side likely only need one win or a couple of bonus points to ensure their place in the knockout stages.
But with a difficult finish to the season, it won’t be easy.
Foote told AAP he wasn’t sure if the vote would be addressed within the playing ranks before the kick-off.
“It all depends, what happens if it’s a really bad message,” Foote said.
“There’s still so much uncertainty because even if it goes to DOCA and it’s positive for the club, we don’t know where Rugby Australia stands on this.
“It’s the heaviness of the situation which is frustrating and that’s for everyone.
“The guys are doing such an amazing job.”
Rebels general manager Nick Stiles has previously said he will continue to be transparent as soon as information comes to light.
“My approach has been [if I get] any news to keep everyone informed. Don’t try and talk rubbish to them and lie,” Stiles, the former Wallabies prop, told The Roar in early April.
“Let’s be open and honest with the pain or the suffering that you might be going through. If you’re getting grief at home, come and talk to me and I’ll try and help you out with whatever I know.”
Muglair
Roar Rookie
Thanks Boss man, you are the first person on the Roar since I have been a member to accuse me of pushing a RA biased agenda. Usually follows a different line. I agree with you about the corporate disease although I would date it three decades ago. I am sure there are a long list of failures on RA's part in developing and supporting the sport in the minor states. They have mainly shrunk it in the areas where rugby has been traditionally played. Back to my post. This latest response of yours pretty much supports my contentions. Fair play to the directors who volunteered to try and make it work. Its great that some, and apparently one in particular, has poured so much of their own money into the black hole. It is very much a corporate behaviour to stick your head in the sand and ignore your own failure, and hide it from everybody else. When the balloon goes up it is pretty typical to not accept responsibility, blame everyone else and claim that some egregious illegality committed against your business has brought you down. But at some point you have to recognise the game is over. It was over when there was going to be no PE money and no further negotiations with the ATO were possible. It is all very well to complain about RA not pouring more money into the abyss when the directors had already decided they would no longer put their own money in. In fact RA have kept the team going and provided funding to the VA so that a proper administration process could be carried out. Every aspect of the extension and the proposed DOCA is about bailing the directors out. Every day that goes by delays payments to terminated employees and blocks any progress in establishing what happens to rugby in Victoria. The proposed DOCA plan is not only totally dedicated to bailing out directors at least cost, but will shrink investment in Victorian rugby. What about all of those volunteers who have put their time and money into the game? The directors also did that, but they made their own choices, and had the power to make decisions. Everybody else could only trust them.
Boss man
Roar Rookie
Nope the corporate disease is the shambolic RA that over a period of 20 years and various administrations has destroyed the game in this country and this includes the ham fisted and bloody minded way they have managed the Rebels since their inception . I don’t have the time or the inclination to give you the long list of disgraceful inequalities they have forced on the good people putting their own money on the line to try to make this thing work . But yeah you just keep pushing your RA biased agenda .
ScottD
Roar Guru
The ATO voted against the DOCA
ScottD
Roar Guru
Yep, then the team folds mid season and they end up in court. Where is the win in that?
ScottD
Roar Guru
Agreed
Cannonball
Roar Rookie
Being a business owner myself, if I didn’t receive financial statements from my business partner for 1 year, there would be an issue. Let alone 5. Atrocious governance.
ScottD
Roar Guru
No, the Rebels directors did. I’m glad that’s your base position and I agree that , that is a worthy target. The nuance here is that the DOCA has elements that are also worthy. For example moving to a stadium that is “right sized” for the crowds they get and targetting the interest groups . The problem is that these are wrapped in with components that simply can’t be accepted by RA. The DOCA is clever in that regard but it is fundamentally dishonest. If the proponents were in fact acting in the best interest of rugby in Victoria then they would drop the preconditions vis a vis the ATO and suing RA. The fact they have those conditions tells the story.
Muglair
Roar Rookie
The ATO role in this is complex and they are certainly culpable, as in all insolvencies, for letting the company dig itself deeper and deeper into insolvency. On the other hand this is now highly transparent to all taxpayers. In the midst of a drive to collect debt and enforce DPNs they just cannot release directors when they have an enforceable claim for 75% of the debt, and then accept 30% of the debt in full settlement. There is another twist here as well. While the directors cannot participate in the 30% distribution, their loans are left intact. If a windfall happened later, they would all get their money back. It also transpires that there is one director related entity which is owed the vast majority. It was not clear in the VA report which director that is, but the obvious supposition it would be Widdup, Clifford’s daughter, or Clifford himself.
Muglair
Roar Rookie
Dispassionate observer of facts. Do you want to make a specific point or disagree with one of my statements? Probably not I guess. A bit too hard?
LuckyPhil
Roar Rookie
Evidence of phil waugh saying it please.
nroko
Roar Rookie
I think he should. The French played Posolo Tuilagib in U20 6 nations couple of weeks after he made his international debut. He doesn't need to be rushed. Unfortunately he has been sold the dream of BIL and 27 RWC so he is putting pressure on himself and also from externally. Most other players his age are coming through u20s, 7s etc.
Jacko
Roar Rookie
Half the city is 3.5mil people. You will need 5k. Geelong has a rugby community I have watched rugby there and people may only go to 2 games a year but you wont need many. Also the Rebels can take games anywhere.
AgainAgain
Roar Rookie
Withhold money. They did that during Covid ok.
Jacko
Roar Rookie
I note the ATO voted against the consortium
Mirt
Roar Rookie
So LuckyPhil, you’re saying it’s all unLuckyPhil’s fault or is it all on KluckyPhil. I’m confused
Tony
Roar Guru
:laughing:
Big Dave
Roar Rookie
Not disingenuous at all. The comment betrays an incredible ignorance of the rugby landscape in Sydney. Rugby's presence is heavily weighted to the north shore and eastern suburbs. There are huge swathes of Sydney without a rugby club anywhere nearby. Rugby is rarely on the radar in much of Sydney. If you want to talk failures then there have been many, but the reality is there is huge potential for rugby to grow in Sydney and claiming otherwise weakens the OP's argument.
Piccolino
Roar Rookie
Yeah, in The Age: - Notes taken of the meeting by the sources reveal ATO representative Craig Moreland explained the tax office rejected the proposal as there was no legislative basis to waive the Rebels' directors from the $11.6 million tax debt for which the directors are personally liable.
Piccolino
Roar Rookie
Yeah. In The Age: - Notes taken of the meeting by the sources reveal ATO representative Craig Moreland explained the tax office rejected the proposal as there was no legislative basis to waive the Rebels' directors from the $11.6 million tax debt for which the directors are personally liable.
Piccolino
Roar Rookie
Yeah. In The Age: - Notes taken of the meeting by the sources reveal ATO representative Craig Moreland explained the tax office rejected the proposal as there was no legislative basis to waive the Rebels' directors from the $11.6 million tax debt for which the directors are personally liable.