Rugby Australia has recorded a $ 27.1m 2020 deficit due to the Covid-19 pandemic, in which the governing body lost so much money that it even considered returning to amateur status.
A reduction of $ 45.7 million in revenues was a significant cause of losses, which was somewhat offset by $31.2m in drastic cost-cutting measures.
Staff costs were reduced by $9.9m (down 46%), a $7.7m reduction in player costs (down 45%), an $8.1m reduction in Member Union funding (down 28%), and other costs were reduced by $5.5m.
Chairman Hamish McLennan Speaks
Australian rugby chairman Hamish McLennan said the organization was “deeply shaken to its core” by the impact of the global pandemic. And the magnitude of the financial loss has led to serious discussions about interest.
“We were very nervous,” McLennan said Thursday afternoon after the AGM. “When I was boarding in June / July, we would not have 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.”
Turn To Private Equity
New Zealand Rugby ratified an independent private equity agreement at their AGM on Thursday, at a cost of 12.5% to be sold to American financial institution Silver Lake for $ NZ387.5m ($ 361m).
McLennan has indicated that Rugby Australia will follow suit. “We are perfectly aligned,” he said. “I can’t see us giving more than 15%. It will be between 10 and 15%. Probably 12.5%. In a perfect world you would never have to do it. There is a higher stakeholder that we will 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 that Australian rugby has now faced the worst financial crisis and its over, following a series of international set-ups to pump the much-needed money into the game. The URA is confident that a series of three proposed Tests against France during the year will continue.
