Wallabies players react to a Bledisloe Cup defeat last year. Picture: AAP
Wallabies players react to a Bledisloe Cup defeat last year. Picture: AAP

Rugby union's ugly blueprint to survival

Rugby Australia is expected to start laying off staff as early as this week after finally completing its 2019 financial report.

The heartbreaking decision to cut jobs looms as the only way the cash-strapped code can survive in the future even after getting the thumbs up to continue operating from its accountants KPMG.

Despite being declared solvent - pending the approval of the Australian Securities and Investments Commission (ASIC) - RA remains in a dire financial position after failing to secure a new broadcast deal and paying out millions to Israel Folau after his messy termination.


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Players, coaches, executives and staff have already taken hefty pay cuts to weather the COVID-19 economic storm but permanent headcount losses are inevitable if the game is to stay afloat.

Officials have not said exactly how many positions could be affected but in announcing it had submitted its financial report, RA revealed the next batch of cost-cutting plans would be implemented immediately.

"This week we will also announce the first phase of an organisational restructure of the Rugby Australia business which we are in the final stages of completing," RA's interim chief executive Rob Clarke said in a statement.

RA will release its full financial figures later this week along with its 2019 Annual Report, which was held back because of problems auditing the accounts.

RA had already reported a loss of $9.4 million at its annual general meeting in March but the coronavirus lockdown has left the organisation fearing revenue losses of up to $120 million on top of liabilities in excess of $20 million.

New Rugby Australia boss Rob Clarke. Picture: Sam Ruttyn
New Rugby Australia boss Rob Clarke. Picture: Sam Ruttyn

A $14.2 million loan from World Rugby has helped alleviate some of the immediate cash problems, allowing RA to submit its financial report to the Australian Securities and Investments Commission just hours before yesterday's deadline for unlisted entities.

"We have cleared another important milestone as we continue to navigate the COVID-19 crisis with the finalisation of our 2019 accounts," Clarke said.

"We have been working very closely with KPMG to finalise the audit, the Directors conclude that the organisation is a going concern and KPMG has issued an unqualified audit opinion."

While the accounts still have to be approved by ASIC, getting them audited and signed is a significant step forward for RA after there were grave concerns it may be declared insolvent.

However, no one is under any illusions that the game is in the clear yet.

The first order of business is to reach an agreement with broadcast partner Fox Sports for a domestic competition this season, featuring the four Australian Super Rugby teams and the Western Force.

RA had been holding out hope that the Japan's Sunwolves would also be able to compete in the tournament but that has been blocked because of travel restrictions.

The Daily Telegraph understands that a formal announcement ruling out the Sunwolves is imminent while talks with Fox Sports are progressing well and the five-team tournament will kick off on July 3.

RA still does not have a broadcast deal beyond 2020 and negotiations are stalled because no one is sure which competitions will be running after this year.

Super Rugby is as good as dead with a trans-Tasman competition, possibly involving sides from the Pacific Islands and Japan, likely to replace it while the future of the international game is expected to become clearer later this month with World Rugby officials due to hold talks in two weeks to discuss a new global calendar.

Originally published as Rugby`s ugly blueprint to survival

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