Rugby Australia Chairman Dan Herbert advises of need to ‘reset’ as code posts $9.2 million deficit

Rugby Australia has today advised of a $9.2 million deficit in its 2023 operations, warning that 2024 will be “another challenging year” for the governing body.

Releasing its financial results for 2023 as part of its AGM today (Monday 29th April), Rugby Australia showed recorded revenue of $124 million and expenditure of $130 million with $3.3 million spent on interest payments.

With the Wallabies eliminated in the pool stage at last year’s World Cup, costs associated with the campaign involved $2.6 million unapproved over-investment.

The interest payments result from the governing body having set up a new $80 million loan facility last year to “be a short-term bridge” to the higher revenues expected in 2025, due to the British and Irish Lions tour, as well as the home men’s and women’s World Cups in 2027 and 2029.

He went on to advise that the sport must use the anticipated financial windfall from the British and Irish Lions tour alongside the World Cups in 2027 and 2029 to “reset” the game.

Herbert said the game simply could not afford to waste the cash windfalls on the horizon which, he said, “won’t come around again any time soon”, noting “we’ve been spending more money as a game than what we’ve been earning and we can’t continue to do that.

“We’ve got these two big capital events with the Lions and the home World Cup, and by then I’m hoping the Women’s World Cup will be a really big event as well.

“We can’t squander that opportunity, so we’ve got to reset the game over the next couple of years otherwise, that windfall won’t come around again, anytime soon. It will be wasted beyond that, so we need to take the opportunity over the next couple of years.”

Rugby Australia Chief Executive Phil Waugh said the governing body was managing both short term needs, and the longer-term position of the game with a new broadcast cycle starting in 2026.

Waugh stated “we have set a clear path forward - to unite the game from the grassroots to the elite level, to maximise efficiencies in high-performance, to invest in growth areas of the game - especially in community and women’s rugby - and to set the game up to maximise the commercial opportunities over the next six years to ensure a thriving future for Australian Rugby.”

Waugh indicated 2024 would be another challenging year “given we have had to take on the unplanned cost of the Melbourne Rebels’ operations for 2024, as well as additional investments and distributions to member unions, Super Rugby clubs, the community game, pathways and women’s rugby”.

He added “it is essential that we set the game up as best we can for the major revenue events on the horizon in 2025, 2027 and 2029.”

Uncertain future for Melbourne Rebels
The financial results cast yet more doubt on the future of the Super Rugby’s Rebels, with Rugby Australia having funded the club to the tune of $3.9 million last year (totalling $12.5 million on the club in the last three years). Regardless of whether the Rebels’ investor group delivers a rescue package, annual funding would likely still need to be delivered by Rugby Australia.

Herbert recently told Sky Sport NZ’s Rugby Breakdown that “we’ve been living beyond our means as a game” when asked about the future of the Rebels, and on Monday said negotiations with the troubled franchise were ongoing.

Directorial Changes
Rugby Australia will be seeking two board members before the end of the year after frustrated shareholders decided to vote against the re-election of a board director.

Karen Penrose, a non-executive director at Cochlear Limited, Ramsay Health Care Limited and Bank of Queensland, will step down from the governing body after she did not receive a two-thirds majority from members, which include the Super Rugby franchises and state unions.

Fellow directors Matt Hanning and Jane Wilson were re-elected to the board alongside new directors, former Nine and NRL executive Alexi Baker, and Brisbane businessman Hans Pearson.

Former Salesforce Chief Executive Pip Marlow is planning to step down from her position on the board later this year.