Aussie Pro Rugby
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Concerns over Rugby Australia’s solvency have been raised by its accountants KPMG due to an additional $7 million owed to former sponsor HSBC, as a result of a currency hedging strategy.
The Australian understands RA has liabilities in excess of $20m and KPMG have yet to sign off on the 2019 annual report.
There are questions about whether any funding available from World Rugby will be enough to meet all the organisation's’s known liabilities plus the hedge.
New South Wales chair Roger Davis has major concerns about rugby’s future and the game currently facing a $120m revenue black hole because of COVID-19.
“I am seriously worried about the financial viability of the game,” Davis said.
“It is running at a big loss. Our financial position is dire because we have no revenue. There’s cash pressure, no broadcast money; the solvency of the game is at risk. It’s why there are rumours that we are close to Voluntary Administration and trading insolvent …
“We don’t have six months to fix this, Rome is burning, until the Easter Bunny, Santa Claus, whatever comes along, we are running fast out of cash. This is a cash game. The game is under threat.”
The currency hedge was first set up under the leadership of then chief executive Bill Pulver and chair Michael Hawker. The board had hoped the currency hedge was going to go up and claw back some of the losses but it had not eventuated before COVID-19 hit.
The annual report remains unaudited and is yet to be submitted to the Australian Securities and Investment Commission.
World Rugby’s rescue package is understood to be in the region of $17m and sources say it is expected to drop next week.
The Australian understand RA is trying to renegotiate its hedging strategy with its bank HSBC, as one observer said Rugby Australia is currently “kicking the can” down the road.
Before RA director Peter Wiggs’ sudden resignation after Monday night’s heated board meeting – after his request to install Matt Carroll as CEO was shot down by his fellow RA directors – the Archer Capital boss had been looking at the books.
Wiggs had paid for two of his own staff to go through the RA financials.
The Australian understands after looking at some of the financial details Wiggs said at a rugby meeting: “This the worst-run business I have ever seen”.
Nick Farr Jones, one of the 11 Wallabies captains who signed a letter two weeks ago calling for transformational change at RA, said he was impressed by Wiggs’ financial nous early on and was disappointed he had left.
“He alerted the board to the flashing red lights and he was the one who understood his duties as a director, and he was the one who raised; ‘hey guys are you sure we are a going concern’?” Farr-Jones said.
“I think the board is partly hiding behind the new softening of the ASIC ‘going concern’ rules during the COVID-19 period. They are relying on this expectation of income coming from World Rugby.”
Farr-Jones was disappointed by Wiggs’ resignation.
Over two weeks ago Wiggs met former Wallabies captains Farr-Jones and Phil Kearns, as well as RUPA boss Justin Harrison, to listen to their concerns and help push the game forward.
Wiggs told them that over four days he would do a “deep dive” with “due diligence” into Rugby Australia to learn more about what the issues were and then he would set up “three pods” of experts to review the game over a month.
“I was extremely comfortable with what we agreed going forward,” Farr-Jones said. “That was for Peter to effectively do a deep dive, with one of his work out guys, into the operations of Rugby Australia including, as I understand meeting with a lot of the former chief executive’s direct reports. The process that we agreed after that, was there would be three pods put in place. Which would effectively deal with the whole of the national game, from a sustainable business up to the community game. All aspects of the game.”
Farr-Jones said representatives from the member unions would be involved in the ‘pods’, as well as RUPA, and Rugby Australia. Each group would do a one-month review.
“Then they would come back with recommendations for approval by Rugby Australia,” he said. “Having met Peter I knew he would work hard, unlike a lot of other rugby non-executives he was prepared to roll up his sleeves and use some of his expertise from his private equity group.”
Farr-Jones said there had been a good response from Wiggs but soon communication dried up.
“And then, I don’t know because I haven’t spoken to Peter Wiggs since, we have exchanged one or two texts where I’ve tried to understand where he is coming from,” he said. “This is not a criticism of Peter, but he went off-piste, and that was disappointing. I thought we had a process.
“What I gather is the board just didn’t like or accept that all of a sudden Peter came in with various demands as to who would become CEO etc … I understand that. I get that. You want to do things by consensus.”
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@antipodean really? Deep Dive? Pods?
those sort of corporate bingo bullshit words piss me off no end. NFJ gone down in my estimation.
Up in my estimation - Dingo Deans holding it together over there for (checks google) 6 years
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NFJ hasn't endeared himself to me as chairman of the NSWRU.
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NFJ is fucking typical of his ilk: talented rugby player, but an utter hypocrite.
EDIT: All these fucking "legends" think that she'll be right if we just turn back the clock 20 years and let the talent just emerge through a combination of good, old-fashioned private school buggery, nods, and winks.
This is the Good Christian that decided to forward a bit of cash to pay an ex-Wallaby's home loan in the guise of grant money. Fuck what a fluffybunny. Every time these people open their simpering yap they make me want to retch.
Or it could be the Friday arvo zoom drinks at work. Whatevs.
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@Nepia said in Aussie Rugby:
@NTA said in Aussie Rugby:
NFJ is fucking typical of his ilk: talented rugby player, but an utter hypocrite.
What's Genia's role in all this? Is he still an Oz halfback I can like?
No.
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Forget the Kiwis, Australian rugby's future is local
The UK Premiership provides a model for Australian rugby's future according to a sports consultancy group.
Forget the Kiwis, Australian rugby's future is local A national club competition culminating in a state-based representative season should replace a "broken" Super Rugby model in Australia, a leading sports consultancy group says. -
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@KiwiMurph Interesting concept and I do think that there may be something more appealing to fans in the UK / European "club" model than in the US "franchise" model, which was adopted way back in 1996.
That said, I do not think there is enough interest in club rugby in Australia to get this off the ground.
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An excellent dissection, as always
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A question I've been thinking about since I read this interesting article on the future of Aussie rugby: http://www.greenandgoldrugby.com/maybe-just-cant-professional-rugby/
The article posits a future where professional rugby ceases to exist in Australia, and we broadly head back to the 70s and 80s. I'd say it's unlikely but certainly not impossible.
If that happened, what would be the impact on NZ rugby? Would NZ have the scale to sustain a domestic pro comp? Or would you keep Super Rugby going with just the Saffers and Argies?
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@barbarian said in Aussie Rugby:
A question I've been thinking about since I read this interesting article on the future of Aussie rugby: http://www.greenandgoldrugby.com/maybe-just-cant-professional-rugby/
The article posits a future where professional rugby ceases to exist in Australia, and we broadly head back to the 70s and 80s. I'd say it's unlikely but certainly not impossible.
If that happened, what would be the impact on NZ rugby? Would NZ have the scale to sustain a domestic pro comp? Or would you keep Super Rugby going with just the Saffers and Argies?
Yes and probably yes. That said, surely the answer is to accept that Australia can't manage 4-5 competitive super teams, so go with 2-3, not 0 and fold. Yes, TV rights aren't what they were, but is the market so stuffed that they can't even go back to just NSW and Queensland?
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@barbarian it's completely unrealistic that a wealthy country like Australia, with its athletic people, weather, and outdoor lifestyle, can't have a professional rugby comp.
The entire thing is held back by narrow minded self interest. And this article reeks of it. If we can't have everything, then fuck it, we'll go back to club land.
There's also the very Australian attitude of "if we can't be the best, then what is the point?" which serves the country very well at times.
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Not a good buy IMO, with the way things are going clubs need to concentrate on home gorown talent with a future, not bust up already well into decline foreign 'stars'
Racing 92 confirm signing of veteran Wallabies star Kurtley Beale
After 13 years of service in Australia, Kurtley Beale will depart for French glamour club Racing 92 ahead of the 2020-21 season.
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@barbarian said in Aussie Rugby:
A question I've been thinking about since I read this interesting article on the future of Aussie rugby: http://www.greenandgoldrugby.com/maybe-just-cant-professional-rugby/
The article posits a future where professional rugby ceases to exist in Australia, and we broadly head back to the 70s and 80s. I'd say it's unlikely but certainly not impossible.
This bit on it's own shows the author is ignorant of the realities playing out in professional competitions overseas:
Once Super Rugby is done, and with no viable alternative, expect 95% of our Super Rugby and Wallaby players to go overseas. And a few more from the rung below. We will not be able to stop them.Clubs are under financial pressure as well as being required to maintain an increasing ratio of national qualified/ developed players. The market simply doesn't exist for all of these professionals to move elsewhere.
The problem stems back to the shortsightedness of the ARU in making SANZAR expand Super Rugby. I can see the logic at the time; a greater base of professional players providing a pathway and increased depth to the Wallabies, additional product bringing in more revenue but the effect was to weaken the existing teams. Poor results lead to disinterested fans making leading to reduced broadcast rights bids.
If that happened, what would be the impact on NZ rugby? Would NZ have the scale to sustain a domestic pro comp? Or would you keep Super Rugby going with just the Saffers and Argies?
New Zealand recognised decades ago that it was to its benefit if rugby was also viable in Australia. This IMO is doubly so in the professional era, hence why NZR are reportedly looking to alternative sources in the long term. It would be difficult to maintain five SR teams buy itself when you look at the population, GDP and distance. Even Victoria can only manage 10 local teams in the AFL and there's always talk that one or two of them should relocate.
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@Machpants said in Aussie Rugby:
Not a good buy IMO, with the way things are going clubs need to concentrate on home gorown talent with a future, not bust up already well into decline foreign 'stars'
Racing 92 confirm signing of veteran Wallabies star Kurtley Beale
After 13 years of service in Australia, Kurtley Beale will depart for French glamour club Racing 92 ahead of the 2020-21 season.
He hasn't been providing much in the way of on field leadership for a young Tahs team this year and I doubt Rennie would want him in the Wallaby squad.
Can't say Racing 92 fans would be happy.
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@antipodean said in Aussie Rugby:
He hasn't been providing much in the way of on field leadership for a young Tahs team this year and I doubt Rennie would want him in the Wallaby squad.
Beale was a notable omission from the wider squad wasn't he?
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@Bovidae said in Aussie Rugby:
@antipodean said in Aussie Rugby:
He hasn't been providing much in the way of on field leadership for a young Tahs team this year and I doubt Rennie would want him in the Wallaby squad.
Beale was a notable omission from the wider squad wasn't he?
Yes he was and I recall reading he admitted his own form wasn't where he'd like it to be.
