A vote to save the Melbourne Rebels may prove to be only a stay of execution, with the debt-ridden Super Rugby Pacific club facing further hurdles in its bid to stay alive.
The positive vote in favour of the Rebels came as the Super Rugby franchise’s head coach Kevin Foote hit out at Rugby Australia, saying they felt abandoned by the governing body.
Creditors on Friday voted to accept a proposal by a private investor group that includes current directors rather than liquidate the club, which has debts of more than $23 million.
The consortium, involving former Qantas chairman Leigh Clifford, proposed a Deed Of Company Arrangement (DOCA), which guaranteed employees 100 per cent of their entitlements but would leave unsecured creditors with as little as 15 cents to the dollar.
Committing to an investment of more than $25 million over the next five years, the plan involves a move to Melbourne’s western suburbs to share facilities with A-League club Western United.
The proposal was recommended by PwC voluntary administrator Stephen Longley, who also said in his report last week that the club may have operated insolvent for more than five years.
It’s believed Longley had the deciding vote on Friday after the creditor vote was tied.
However, the DOCA is dependent upon the Rebels regaining the Super Rugby participation licence from Rugby Australia (RA), which took control when the club entered voluntary administration in January.
RA, which has propped up the club this season, taking over the wages bill for players and staff, has given no indication of its plans for the club, who joined the competition in 2011.
It’s believed RA voted against salvaging the club, with the Australian Financial Review reporting that the governing body claimed the independent report by Longley was biased towards the former directors. The Roar understands RA voted by proxy.
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The Rebels’ second obstacle is the Australia Tax Office, which also voted against the proposal, a source told AAP.
As well as the licence, the new deal is dependent on the ATO releasing the directors from their personal liability over the club’s $11.5 million in tax debts.
The likelihood is that the matter will end up in the courts, leaving players, coaches and Rebels staff in limbo.
The meeting occurred just hours before the Rebels were scheduled to host the Blues in a Super Rugby Pacific match at AAMI Park on Friday night. Ultimately, the Blues put got over a messy first half to run away with the match 38-11 as they scored 31 unanswered points, including four second half tries.
There are just four rounds of the regular season left for the Rebels, with the franchise franchise on track to make the finals for the first time in their history despite their second straight loss.
Consortium spokesperson Georgia Widdup welcomed the successful vote and urged the governing body to support the new plan for rugby in the state.
“The Melbourne Rebels are an integral part of the sporting fabric of the state and play a critical role in making Melbourne the sporting capital of the world,” she said in a statement.
“Today’s decision ensures the women’s and men’s club can progress plans for our financially sustainable future.
“There is still a lot of work to do, but with the vote out of the way and a lot of community and government goodwill behind the club, we can finally get excited about what the future holds, and we urge Rugby Australia to support rugby in Victoria.”
But speaking following the loss to the Blues, Foote, who saw the Western Force culled during his time at the Super Rugby franchise, called on RA to show their hand.
“I don’t know what their intentions are,” Foote told AAP.
“I know they voted liquidation today and last week we were told that they were happy that there was a DOCA (Deed Of Company Arrangement) and now liquidation, so it would be great to hear something from them.”
Representative from the Rugby Union Players Association were in Melbourne last week to talk the club through the rescue proposal but RA haven’t been seen since in months.
With coaches to be receive just one more pay cheque, Foote said the entire club was feeling the pressure.
He previously said he was hiding the possible demise of the Rebels from his young son because he knew how much the boy would worry.
“Staff and players, it’s the human element,” he said.
“There’s definitely people under massive stress, everyone is under stress as a matter of fact.
“It speaks again to their performance tonight – guys have done this since day one, before even the season kicked off they’ve been under this pressure.
“Are people feeling supported? I’d say no.”
AAP with staff writers
Train Without A Station
Roar Guru
What role do you think state unions have?
robynn
Roar Rookie
There are none so blind... The RA Constitution says its RA's responsibility. The End
Train Without A Station
Roar Guru
The state unions have continually fought against ceding any control of this to RA. That’s the trouble with having no idea what you’re talking about..and just making stuff up
Train Without A Station
Roar Guru
No it's not unarguably clear. The responsibility lies with the state unions. What do you think they are there for otherwise?
robynn
Roar Rookie
How its done is a very irrelevant question. There are many options What is unarguably clear is that the responsibility lies with Rugby Australia . Despite all your contorted, nonsensical posturing that's just a fact
kingplaymaker
Roar Guru
Thats just untrue the Rebels have been mid-table all season.
Jay-c
Roar Rookie
Forcé and rebels have been bottom of the table their entire existence. Waratahs not much better the last decade. How many years do 3 of 5 teams have to be bottom of the table for you to wake up to this? If Australia could afford to have all our overseas players playing here I’d agree with you, but we can’t and that’s not going to change. It’s deluded to think otherwise. If the facts can’t change your mind mate, I’m not going to be able to, I wish you well, but this is going nowhere. All the best.
kingplaymaker
Roar Guru
They have the playing stocks to be competitive. If they aren't blame the bad coaching. Also, not every team will be at the top in any tournament.
Jay-c
Roar Rookie
The only Australian teams that are competitive are the brumbies and the reds. With points differentials of -147, -132 and -128, the rebels, force and Waratahs are simply not competitive this year. These are the facts mate, up to you if you want to believe it or not.
kingplaymaker
Roar Guru
Actually the teams are more competitive than ever this year and it can sustain them.
Jay-c
Roar Rookie
Well mate, they have indeed lost to the reds, chiefs, brumbies and Fiji. I really hope I’m wrong- truly I’d love to see it, but all signs point to them getting spanked by the hurricanes next week and it’ll be over. I take no joy in this mate, but Aus rugby cannot sustain 5 teams. Every team and the wallabies are worse off because they’ve tried to all these years. It sucks for the die hards in Melbourne and it must be horrible for them, but the management and the players need to take the blame for 15 years of utter crap.
GusTee
Roar Pro
Fair call - Lol
Muglair
Roar Rookie
Let me be clear, I have only momentarily stopped kicking. It has not worked to date, so I am working hard on the legs to increase power when I resume.
GusTee
Roar Pro
Muglair - Absolutely with you! It is easy to put the boot into RA while it is on the ground but before doing so the kicker should at least make sure of their justification in doing so.
Jay-c
Roar Rookie
Terrible. Difference is that there is hope for the future in NSW and Western Australia. Apart from the five supporters on here, no one in Victoria cares about rugby. Is almost exclusively to blame on the management in my eyes, even from the beginning, calling themselves the Melbourne rebels meant the rest of Victoria was disregarded. A real shame, there’s no winners. But if they don’t stop the bleeding, the whole game will die. Tough decisions need to be made. They’ve had 15 years and there’s no hope for the future.
Rebel like Sarah
Roar Rookie
Or the Tahs or the Force!
Rebel like Sarah
Roar Rookie
And the Waratahs and Force this season??
MO
Roar Rookie
It may matter if they are trying to cut a deal
Micko
Roar Rookie
With this attitude you wonder why the AFL, NRL & A League are destroying SR. All you're talking about is your national team, hence the continuation of the amateur era thinking that is destroying this sport!
JD Kiwi
Roar Rookie
The original three team Super Rugby model wasn't ruinously expensive. The quality was high and it pulled in big crowds. In fact it was so successful that it fooled JON into thinking expansion was a good idea. Wasting money on and expensive league converts and extra teams full of players not good enough for pro rugby was ruinously expensive. You're wrong about Europe making the main comps domestic. Only two of the six nations did that. And neither of them went for the low cost Mickey Mouse league that you advocate - they had huge playing and financial resources. Your model would have simply resulted in a huge player drain to Murdoch's new Super League clubs which were newly cashed up and hungry for players. It would have destroyed Australian rugby at a time when it was the best in the world. https://www.afr.com/companies/how-rupert-murdoch-tied-up-rugby-union-19950911-kax1n