It’s been a recurrent theme in recent years: Australian rugby can’t seem to keep out of the headlines. For all of the wrong reasons.
Whether it be the axing of the Western Force in 2017, the Israel Folau matter, Eddie Jones’ wild 2023 World Cup ride which ended in defection to Japan, or the chaotic end to Hamish McLennan’s tenure as chairman late last year, stabilising the game in Australia seems beyond the capacity of the people charged with running it.
Only last month, at Rugby Australia’s AGM, an attempt to change the governance model for Australian rugby by a group of frustrated dissidents failed. And now, confirmed at a meeting of staff and players yesterday in Melbourne, there is the termination of the Melbourne Rebels.
Battlelines have been drawn. Rugby Australia has laid all of the blame for Melbourne’s financial position at the feet of the club directors.
Rugby Australia CEO Phil Waugh and Rugby Australia Chair Daniel Herbert speak to the media on Thursday. (Photo by Morgan Hancock/Getty Images)
“I think they’ve let rugby stakeholders in Victoria down and stakeholders broadly,” said Rugby Australia chairman Daniel Herbert at a press conference yesterday. “We also have claims against those directors, those former directors, if they want to continue to go down that [path]. Then there’s only so many times you can continue to be threatened without pushing back,” he continued.
Asked what those claims were against the directors, Herbert stated, “that they continued to take money whilst they were allegedly trading insolvent.”
That’s a claim certain to attract the close attention of a group of directors who have quietly absorbed a hammering in the court of public opinion over the last few months.
One question those directors will be happy to have examined in the coming months is how a business supposedly trading insolvent in 2018, continuing to incur trading losses in every subsequent year, including higher costs associated with relocation during COVID, and a reduction in grant money to the tune of $1.7m annually, could possibly still be trading entering 2024?
With respect to the consortium proposal to take Victorian rugby and the Rebels forward, this was rejected out of hand, with an official release from Rugby Australia stating, “The application relied upon projections for revenue growth and cost savings that RA believes are overly optimistic, raising significant doubts about the long-term sustainability of the proposed licensee.”
Herbert and Waugh both spoke later to an unacceptable level of risk attached to the consortium, in terms of surety around the funding, and the personnel involved.
This will no doubt also form part of the ‘he said/she said’ as the matter moves forward. What wasn’t acknowledged yesterday was that the consortium proposal comprised a board with Leigh Clifford as chairman, along with a seat offered to a representative of Rugby Australia’s choosing, and was to contain none of the previous Rebels board.
Now that Rugby Australia has formalised its position, expect to see the matter in court early next week, with the first of a number of potential claims to be lodged.
The first will concern the directors’ claim that Rugby Australia is not actually entitled to withhold the participation deed from the Rebels’ directors, given that it was granted until the end of the 2025 season.
Rugby Australia has already publicly stated that it believes the licence lapsed; hence this being the first of what might be many legal battles.
Matters around the Deed of Company Arrangement (DOCA) have been finalised, with the consortium agreeing to meet and fund the terms of that agreement, even without Rugby Australia providing the participation licence to it.
That means that staff will be paid outstanding entitlements in full, unsecured creditors will receive the low-end estimate of 15 cents in the dollar owed, and discussions will continue with the ATO about settlement of its debt; another point of dispute between the directors and Rugby Australia.
Matters between the parties have grown increasingly fractious over recent weeks; the consortium believing that Rugby Australia has not taken them seriously, and Rugby Australia angry with the directors for playing the Victorian government off against them.
Victorian State Government Minister for Tourism, Sport and Major Events, Steve Dimopolous, reiterated yesterday his support for the Rebels and questioned whether Victoria would continue to host rugby events.
“The Victorian government is extremely disappointed that Rugby Australia has decided not to support the Melbourne Rebels following the team’s 2024 season, after we made it clear that we expected them to commit to a team at the elite level of the sport in Victoria,” Dimopoulous said.
“We have been extremely clear that having a Victorian-based Super Rugby team would be the reason we can continue hosting large rugby events on our major events calendar – including the Bledisloe Cup and any future Rugby World Cups. That social licence has been diminished today.”
Rugby Australia has effectively called the state government’s bluff. Even if they believe it’s the right move, it’s surely a risky game. The total amount at stake, potentially in the tens of millions of dollars, dwarfs any potential financial saving obtained from cutting the Rebels.
In trying to assess how things got to this juncture, it’s fair to highlight that while yesterday’s announcement and the immediate fallout is all about the Rebels, this has always been a story about Rugby Australia’s fragile financial position, and the failure of various administrations to safeguard the financial future of the sport.
The current administration is embarking on a path of fiscal responsibility which of itself, is no bad thing. But the consequences of this decision are many, and not easily waved away by things like spin about retention of pathways for junior players, under the auspices of Rugby Victoria.
How many kids who come through Victorian age-group teams can be expected to lie awake at night in their beds dreaming of playing for the Waratahs?
Rob Leota of the Rebels. (Photo by Asanka Ratnayake/Getty Images)
In a battleground full of losers, undoubted winners are the Melbourne Storm and rugby league. There is a battle currently being waged in the suburbs for the hearts and minds of hundreds of young Victorians – boys and girls – with rugby more than holding its own.
But it is increasingly apparent that what has transpired in Western Sydney over the last two decades – the gifting of a massive growth corridor to league and the creation and growth of the Penrith Panthers dynasty – has taught Australian rugby nothing.
The Rebels Super W players, who have been poor cousins throughout this episode, have for now been spared. There is a certain irony that the recently announced six-year sponsorship extension of Australian women’s rugby by Cadbury Mondelez was spearheaded by their Australia, New Zealand and Japan President, Melbourne-based rugby referee, Darren O’Brien.
The human side of this decision will now play out in harsh reality for the staff and players. It is telling that despite an overriding sense of being deserted by the national body, and despite enormous emotional and financial stresses, since the club went into voluntary administration in February, not a single staff member has jumped ship.
Many have young families. Many will now be lost to rugby, including high-performance staff with years of rugby IP. Many are gutted by a decision that to them, seems to make no sense.
Waugh spoke later to the timing of the announcement, with the players, due to check-in at the airport at 11.30am, sent an email just before 7.30am, calling them into the club for a 10.00am meeting. Not all of them, including players who slept late and those living on the other side of the city, made it.
Asked by a reporter if that seemed “particularly brutal”, Waugh said, “We always said that once we have the information on hand we will make a decision and an educated decision as quickly as we possibly could. We’ve done that. And I think it’s a good time in terms of the performance of the Rebels going into a tough game in Fiji.”
More than any single event that has transpired this season, that final sentence speaks to the misalignment between Rugby Australia in terms of its reading of the situation inside the club, and the reality experienced by the coaches, players and staff.
If the Rebels do manage to overcome the Drua on Saturday, don’t expect coach Kevin Foote to validate Waugh’s comment around the timing. Not a week has gone by this season without training and preparation being compromised in one form or another.
Everything this side has done this year has been achieved with one hand tied behind its back. Players frantically making and fielding calls from their agents over the next two days and more is not what any coaching group wants heading into a finals series.
If, via yesterday’s action, it is Rugby Australia’s intent to rip the band aid off and begin the healing process for Australian rugby, then that’s an admirable goal.
If instead, it leads to a further period of instability in the game, then everyone involved with the Melbourne Rebels will be entitled to wonder, what on earth the point of it all was.