Rugby Australia posts big losses, warns of 'significant cuts'

1 / 2

Australia lost to England in last year's Rugby World Cup quarter-finals

Australia lost to England in last year's Rugby World Cup quarter-finals (AFP Photo/CHARLY TRIBALLEAU)

Rugby Australia's alarming financial state heading into the coronavirus shutdown was revealed Monday with the organisation posting a near Aus$10 million (US$6.0 million) deficit, not helped by a hefty payment to the sacked Israel Folau.

The 2019 numbers were released as the governing body struggles to navigate a way through the COVID-19-enforced halt to sport, and with players complaining of being locked out of critical talks about their future.

RA said it was unable to produce a set of audited financial accounts due to uncertainty surrounding its business into the 2020 season and beyond as revenues dry up because of the pandemic.

But after its annual general meeting it reported a provisional Aus$9.4 million operating deficit, compared to a Aus$5.4 million profit in 2018.

Revenues are ordinarily hit in a World Cup year, with fewer home Tests, but expenditure also increased by Aus$6.6 million.

Part of the extra spend was the undisclosed settlement with Folau, an ardent Christian and former poster boy of Australian rugby who was fired over homophobic social media posts.

The two parties avoided a costly court battle over the legality of the sacking by reaching a mediated agreement in December.

The governing body's perilous position comes with rugby on hold indefinitely after the Australian government put tough restrictions on public gatherings as it battles to contain the coronavirus.

The country has so far confirmed more than 4,000 coronavirus cases, with 18 fatalities.

Rugby Australia chairman Paul McLean said "significant cuts across the business" would be needed to keep the sport financially viable in the short term.

Specific action was not outlined, although talks are underway to tap funds from the government and World Rugby.

- Executive pay slashed -

Whether players will need to take pay cuts has yet to be decided, but chief executive Raelene Castle's salary has been halved and other senior executives are taking a 30 percent cut.

"To put it simply, there is no way of knowing what damage this crisis will have on our game, or for how long it will continue to impact us," said McLean.

"It has forced us to make some extremely difficult decisions, and there will be even harder decisions to come as we continue to navigate the implications of the virus on the game's finances."

The organisation is set to lose broadcast rights money imminently with a proposed domestic tournament to replace the suspended Super Rugby competition shelved, and serious doubts about whether home Tests against Ireland and Fiji in July will take place.

Ahead of the AGM, the Rugby Union Players' Association (RUPA) slammed the governing body for sidelining it on discussions about the future, complaining about "a vacuum of information".

"While our colleagues in the other major football codes across Australia have been meeting with their governing bodies for weeks, RA has refused to share any information about the future financial direction of the game," said RUPA chief Justin Harrison.

Castle said talks would begin with players on Tuesday.

"I understand from their point of view that there is a level of frustration that they haven't had a deeper engagement earlier," she said.

"But the reality is Rugby Australia didn't want to enter into those conversations until it had the chance to give them accurate information so we could enter into a solution-based scenario for the next three months."