Rugby Australia's $9 million dilemma after Israel Folau saga

Australian Associated Press
·4-min read
Pictured here, Rugby Australia CEO Raelene Castle and former Wallabies star Israel Folau.
Rugby Australia was already facing financial problems over the Israel Folau saga before the COVID-19 crisis hit. Pic: Getty

Rugby Australia (RA) will need to make "significant cuts" to remain viable after revealing at Monday's annual general meeting a $9.4 million operating deficit for the World Cup year of 2019.

The COVID-19 pandemic has robbed RA of ongoing match day and broadcast revenue, causing further financial heartache after legal costs and the settlement of the Israel Folau saga.

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Chairman Paul McLean admitted the code had been thrown into "unprecedented and extremely uncertain times" that required "extremely difficult decisions" to soften a blow he said the extent of which remained unknown.

A statement provided on Monday forecast a requirement "to action significant cuts across the business for the sport to remain financially viable".

"To put it simply, there is no way of knowing what damage this crisis will have on our game, or for how long it will continue to impact us," McLean said.

"It has forced us to make some extremely difficult decisions, and there will be even harder decisions to come as we continue to navigate the implications of the virus on the game's finances."

RA's operating costs increased by $6.6 million in 2019, with the Folau legal case tipping the scales alongside extra community grants and player payments.

A dearth of domestic Tests in a World Cup year and the shutdown of the current Super League season also damaged RA's bottom line.

RA quoted a provisional $9.4 million loss in the absence of a fully audited financial account, which is not yet available due to complications stemming from the coronavirus.

RA confirmed in a statement after Monday's general meeting that a definitive figure for its losses wasn't possible in the current climate.

“One of the implications for Rugby Australia as a result of the pandemic was that it was not able to present a full set of audited financial accounts at the meeting, due to the uncertainty surrounding the business into 2020,” a statement read.

“As expected, in a Rugby World Cup year with reductions in broadcast and match day revenue from fewer domestic Test matches, Rugby AU operated at a loss in 2019.

“Rugby AU reported to its members a provisional $9.4 million operating deficit for 2019 pending final audit.”

The organisation argued that the settlement with Folau in November "enabled the game to move on from the issue and importantly has avoided a potentially long and protracted, and very expensive, court process."

Supercars chairman Peter Wiggs, Virgin Blue co-founder Brett Godfrey and Wallabies great Daniel Herbert were confirmed as new RA board members at the meeting.

Players want urgent action from RA over COVID-19

RA’s dire financial predicament has left Australia’s Super Rugby players seeking clarity from the game’s governing body in the country.

The players acknowledge unprecedented action is needed with the code going through troubled times, and are demanding an opportunity to talk to Rugby Australia.

The possibility of large wage cuts for the players seems almost inevitable and RA is being tipped to announce staff job cuts on Tuesday.

The Rugby Union Players Association (RUPA) are upset RA have not met them to discuss their financial situation prior to Monday’s AGM.

Pictured here, two of Australia's most high-profile Super Rugby stars Kurtley Beale and Michael Hooper.
Australia's Super Rugby players are seeking clarity from Rugby Australia about the current crisis. Pic: Getty

RUPA CEO and former Wallabies lock Justin Harrison says his members are frustrated by what they perceive as an information vacuum during the crisis.

Harrison is worried RUPA will be presented with a fait accompli, with the future of the game decided without any consultation with players.

"There is acknowledgement by the players that unprecedented action is needed," RUPA president and NSW Waratahs hooker Damien Fitzpatrick said on the eve of the AGM.

"This is a critical time and the players have sought the opportunity to constructively contribute to a solution.

"To date RA has refused to provide us that opportunity."

With Yahoo Sport Staff