Rugby Australia open to outside investment after A$27m loss
Rugby Australia, the national governing body for rugby union, has today posted a loss of A$27.1 million ($21 million), and its financial situation means that it will explore the possibility of private equity investment.
The organisation was so badly hit by the fallout from the coronavirus pandemic that it considered reverting to amateur status, the body’s chairman Hamish McLennan admitted today.
With the rugby calendar severely impacted by Covid-19, RA revenue fell by A$45.7 million in 2020, although this was offset in part by A$31.2 million in cost-cutting measures.
McLennan said that RA could potentially follow New Zealand Rugby in seeking a private equity partner.
NZR today moved a step closer to such investment when its provincial unions voted unanimously in favour of selling a 12.5 per cent stake in a new commercial subsidiary to US firm Silver Lake for NZ$387 million ($280.4 million)
McLennan said on Thursday: “We have absolute alignment. I can't see us giving more than 15 per cent away. It 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's an extra stakeholder we'll 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."
Rugby union has been professional in the major markets since the mid-1990s but McLennan admitted that RA was nearly forced to reverse track.
He said: “We were very nervous. 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.
"It was a real possibility. It wasn't just idle talk. But we got through it and there's 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."
Australia, winners of the Rugby World Cup on two occasions (1991 and 1999), are bidding to stage the 2027 tournament.