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FEATURE The case for keeping the Melbourne Rebels in Super Rugby Pacific

The case for keeping the Melbourne Rebels in Super Rugby Pacific
2 months ago

A major decision is coming, somewhere in the next few weeks and probably months, whereby the fate of the Melbourne Rebels will be known as far as the 2025 Super Rugby Pacific season goes.

It will be a decision based on any number of legal and stakeholder recommendations, competition needs, what Rugby Australia can afford, and what the broadcast partners on either side of the Tasman Sea require contractually.

For many, the working assumption is and has been that the Rebels won’t feature in the 2025 draw. On more than a few radio discussions I’ve been a part of this season, and on both sides of the ditch, the question along the lines of ‘there’s no way the Rebels play next year, is there?’ has been asked.

And as it happens, I think there’s a very real scenario where the Rebels play on next year, but I’ll come back to that.

From a legal standpoint, administrator Stephen Longley recommended in his report last week that creditors accept a proposed deed of company arrangement (DOCA) from Rebels directors backed by a consortium of high net worth people, led by former Qantas chair Leigh Clifford.

Carter Gordon
There has been much debate about the Rebels, who have been competitive in Super Rugby Pacific this year (Photo Sanka Vidanagama/ Getty Images)

The proposed deal would guarantee employees 100 per cent of their entitlements, but leave unsecured creditors with between 15 and 30 cents to the dollar. The report suggested that moves to liquidate, rather than accept the DOCA, would likely result in creditors receiving only single-figure cents in the dollar at best.

“I am of the view that the likely return to creditors under the proposed Deed will provide a materially better outcome for creditors than a winding up,” Longley stated in this report.

The deal will be put to creditors at a meeting this Friday, May 3.

The creditors, which include RA, the Australian Tax Office, and the Melbourne and Olympic Parks Trust which runs the Rebels’ home ground, AAMI Park, could of course reject the deal as proposed at that meeting and instead choose to liquidate and walk away.

RA now find itself having to fund a club in order to meet contractual obligations with broadcasters – Stan Sport and the Nine Network in Australia, and Sky Sports in New Zealand.

That could also open the door for further legal challenges from the Rebels directors, which could in turn prove uncomfortable for RA, who find themselves with their own financial concerns.

In addition, RA could find themselves owing the Victorian Government money under terms dating back to the 2017 acquisition of the Rebels from businessman Andrew Cox, and which guaranteed the Rebels’ participation through to 2025. The money would essentially represent a penalty for ending that arrangement early and is understood to be in the millions.

But as the holders of the Rebels’ licence to participate in Super Rugby Pacific, which was handed over when the Rebels were placed into voluntary administration in January, RA also now find itself having to fund a club in order to meet contractual obligations with broadcasters – Stan Sport and the Nine Network in Australia, and Sky Sports in New Zealand.

Taniela Tupou
If the Rebels were to fold, there would be a clamour for their stars, including Taniela Tupou (Photo Joe Allison/Getty Images)

The current broadcast deal was put together by RA and New Zealand Rugby as they emerged from the COVID pandemic, paving the way for Super Rugby Pacific to move forward after South Africa elected to send its former Super Rugby teams to what was the Pro14 competition, now the United Rugby Championship.

That deal runs out at the end of the 2025 season and requires 12 teams playing six games each weekend (outside of bye rounds). The five Australian teams and five New Zealand teams were joined by the Fijian Drua and Moana Pasifika to confirm the competition for the 2022 season.

Winding the Rebels up after this season would either require the inclusion of a new twelfth team for 2025, or potentially, some form of compensation to the broadcasters for the lost content under the terms of the broadcast deal for its final year.

Given that negotiations for a new deal would be expected to start in the coming months, it would make for interesting discussions for RA and NZR, to be asking for an increase in broadcast revenue at the same time as compensation on the current deal might be due.

Returns of a Japanese team or even Argentinean side, the Jaguares, were said to be on the cards, as were the ideas of standing up brand new teams in Hawaii or even Los Angeles – crazy ideas that seemingly forgot the time zone issues often cited as a turn-off for viewers.

At the time the Rebels were placed into voluntary administration, and the assumptions of their inevitable demise began, all kinds of speculation about a twelfth team to meet the broadcast obligations for 2025 was reported.

Returns of a Japanese team or even Argentinean side, the Jaguares, were said to be on the cards, as were the ideas of standing up brand new teams in Hawaii or even Los Angeles – crazy ideas that seemingly forgot the time zone issues often cited as a turn-off for viewers when the competition contained teams from South Africa.

Those ideas will quite likely return again when attention turns to what sort of format and how many teams will be required for Super Rugby Pacific from 2026, and the broadcasters will almost certainly have a big say in that.

Jaguares
There have been suggestions other sides could join Super Rugby Pacific, like the Jaguares from Argentina, but costs would likely be prohibitive (Photo by Kai Schwoerer/Getty Images)

But the competition will still be played in 2025, and this is where it’s my belief that keeping the Rebels afloat from at least one more year might be the better percentage play.

For one thing, putting together even a streamlined budget to run the Rebels for one more season and keeping Melbourne in the fixture is going to be a hell of a lot cheaper than making the eleven other teams travel to Tokyo, Buenos Aires, Honolulu, or Los Angeles.

The additional travel, accommodation, and logistics costs in adding another long-haul flight and days-long stay in new countries onto the teams and the competition would be significant; maybe even beyond the additional commercial needs that would be required to fund such a move.

Keeping the existing twelve teams then also keeps the competition in Australian and New Zealand time zones, ensuring that viewing numbers would at least remain at current levels, rather than suffer the inevitable dip that comes with games played in zones upwards of 20 hours behind.

The Melbourne Rebels looked set for an inevitable demise earlier this year, but their survival for at least one more season – as ironic as this sounds – might just be the most cost effective move.

Maintaining twelve teams would also remove any compensation entitlements for broadcasters, an important element RA and NZR would certainly consider, given both are expected to post the standard RWC-year financial loss for 2023.

How Super Rugby Pacific looks from 2026 remains anyone’s guess right now, and something that will eventually be resolved over the course of negotiations in which current and prospective broadcast partners hold all the trumps. If it’s less teams, more teams, more countries allowing for more revenue, then it will be the broadcasters willing to pay for it that hold the stronger hands at the negotiating table.

But until then, there is the small matter of what 2025 what looks like. And what it looks like next season might be a case of what Rugby Australia can or can’t afford.

The Melbourne Rebels looked set for an inevitable demise earlier this year, but their survival for at least one more season – as ironic as this sounds – might just be the most cost effective move.

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Comments

33 Comments
S
Shaylen 81 days ago

It is a good argument to keep the Rebels for one more year but also isnt this just opening the door as well for keeping them beyond 2025. If they can create some sort of financial stability in the next year and if their performances lift as they have this season then how would RA even cull them after that? It might be the most cost effective decision at this stage and perhaps many people are guilty of keeping relationships going because of the cost to decouple but then again when does that ever work out well?

J
Jon 81 days ago

I have heard it asked if RA is essentially one of the part owners and I suppose therefor should be on the other side of these two parties. If they purchased the rebels and guaranteed them, and are responsible enough they incur Rebels penalties, where is this line drawn? Seems rough to have to pay a penalty for something were your involvement sees you on the side of the conned party, the creditors. If the Rebels directors themselves have given the club their money, 6mil worth right, why aren’t they also listed as sitting with RA and the Tax office? And the legal threat was either way, new Rebels or defunct, I can’t see how RA assume the threat was less likely enough to warrant comment about it in this article. Surely RA ignore that and only worry about whether they can defend it or not, which they have reported as being comfortable with. So in effect wouldn’t it be more accurate to say there is no further legal threat (or worry) in denying the deal. Unless the directors have reneged on that.

Returns of a Japanese team or even Argentinean side, the Jaguares, were said to be on the cards, as were the ideas of standing up brand new teams in Hawaii or even Los Angeles – crazy ideas that seemingly forgot the time zone issues often cited as a turn-off for viewers when the competition contained teams from South Africa.
Those timezones are great for SR and are what will probably be needed to unlock its future (cant see it remaining without _atleast _help from Aus), day games here are night games on the West Coast of america, were potential viewers triple, win win. With one of the best and easiest ways to unlock that being to play games or a host a team there. Less good the further across Aus you get though.
Jaguares wouldn’t be the same Jaguares, but I still would think it’s better having them than keeping the Rebels. The other options aren’t really realistic 25’ options, no. From reading this authors last article I think if the new board can get the investment they seem to be confident in, you keeping them simply for the amount of money they’ll be investing in the game. Then ditch them later if they’re not good enough without such a high budget. Use them to get Jaguares reintergration stronger, with more key players on board, and have success drive success.

T
Tristan 81 days ago

Including SA and Argie teams was great for the quality of rugby, but middle of the night games and player travel/ jet lag make that unworkable. I think that SA in Europe and Argie building an American league with USA, Canada etc would be better long term. If Oz can't sustain Rebels then next cab off the rank should be a Japanese team. Keep regional comps to time zones, both club and test rugby. Then existing test windows for test tours plus RWC.

D
Derek Murray 81 days ago

Sensible thoughts on this, Brett. Also worth considering we’ve sold 60k tickets for a game between the Rebels and the Lions next year. Got to be roughly $10m in ticket and game day revenue there.

M
Mitch 81 days ago

It unfortunate for the Jaguares that they became formidable just as super rugby as we knew came to an end. However, the idea of bringing them back is nonsensical. While I enjoyed the Jaguares and the South African flavour of the comp, a selling point of this incarnation of super rugby is that all games are on a decent time for an Aussie audience.

c
carlos 81 days ago

Brett, from my distant perspective, I hope you get to keep the Rebels. Any ideas of teams from Japan or Argentina are just crazy. Won’t happen.

If you look at logistics, it is much easier to get to LA from Auckland, Brisbane, Melbourne or Sydney than to Buenos Aires. All with direct non-stop daily flights. You may even get some “gringos” to watch the games, with some younger players compared to Giteau and Nonu who still “play” in the area.

I think it is virtually impossible to get a competitive Argie team for SR. All Pumas are in Europe, almost all second tier players are also in Europe. Fringe players are in South American pro rugby tournament (and many still in the MLR!) but these players who might be most interested in joining a new Jaguares do not have the skills to compete. As I have been saying since the Jaguares joined, they should have had TWO teams to make logistics for visiting teams better and Argie player development improved as well. Jaguares/Pumas was not ideal. But this is where Pichot and his cronies did not think long enough. Further the country with he new president “No hay Plata” Milei is in a very difficult situation. Galperin, the richest man in Argentina owns the Miami franchise of MLR. I don’t think you can get him to invest in Argentina. Actually, he played rugby himself. He was a fly half. He is worth around $6 billion!

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