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'I don't fear it': $27million loss will see Rugby Australia turn to private equity just like New Zealand

(Photo by Cameron Spencer/Getty Images)

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Rugby Australia has recorded a net deficit of $27.1million for 2020 due to the Covid-19 pandemic, with the governing body losing so much money it even considered reverting to amateur status. The $45.7m reduction in revenue was the key factor behind the huge loss, which was somewhat offset by $31.2m in drastic cost-cutting measures.


Staff costs were reduced by $9.9m (down 46 per cent), a $7.7m reduction in player costs (down 45 per cent), an $8.1m reduction in member union funding (down 28 per cent), and other costs were reduced by $5.5m. Rugby Australia chairman Hamish McLennan said the organisation was “shaken to its core” by the impact of the global pandemic and the size of the financial loss led to serious conversations about becoming amateur.

“We were very nervous,” said McLennan. “When I came on board in June/July, had we not been able to get cost out of the business and get some certainty into some of our revenue numbers, we openly talked about the game potentially becoming amateur.

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New Zealand provincial unions have their say over Silver Lake deal
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New Zealand provincial unions have their say over Silver Lake deal

“It was a real possibility. It wasn’t just idle talk. But we got through it and there is light at the end of the tunnel. We knew it was going to be brutal, so it’s not really a surprise. I’m proud of the fact that the team here has kept the game alive and professional.”

New Zealand Rugby approved a historic private equity deal at their AGM on Thursday, with a 12.5 per cent stake to be sold to US equity firm Silver Lake for $NZ387.5m ($A361m). McLennan indicated Rugby Australia would follow suit. “We have absolute alignment,” he said. “I can’t see us giving more than 15 per cent away.┬áIt will be between 10 to 15 per cent. Probably 12.5 per cent.



“In a perfect world you wouldn’t have to do it. There is an extra stakeholder we will have to deal with, but I don’t fear it. The more diverse range of skill sets we get around the table is a good thing. Rugby deserves to make a lot of money which we can reinvest back into the community game.”

McLennan feels Australian rugby has weathered the worst part of the financial storm, with a string of international series set to pump much-needed money into the game. RA is confident the proposed three-Test series against France during the middle of the year will go ahead.


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