March 17, 2020
Australian rugby was already sickly before the coronavirus swept the world, but after Sanzaar suspended the Super Rugby competition for the “foreseeable future”, the game in Australia will be on life support if the pandemic does not end soon.
Australian rugby has been placed on the brink of bankruptcy. Unlike its major rivals – Australian rules and rugby league – the 15-a-side code does not have a war chest to help it ride out the crisis.
But it did not have to be that way if things had been done differently 17 years ago. Rugby Australia received a $44m windfall from hosting the 2003 World Cup. Former RA chief-executive John O’Neill intended to invest the bonanza in a future fund similar to the one the Australian Olympic Committee set up after the Sydney Games.
But the game’s stakeholders all wanted their slice of the pie and RA’s reserves have dwindled rather than grown, reportedly down to below $18m. RA’s treasury has been largely drained by bailing out cash-strapped Super Rugby clubs, who no longer have a bank of last resort to rely on.
If wisely invested, who knows what that $44m would have been worth now at a time when the economy of the game is about to collapse because of a virus.
The suspension of the Super Rugby season is expected to cost Australia’s four teams – the Brumbies, Melbourne Rebels, NSW Waratahs and Queensland Reds – millions of dollars in lost revenue, money they don’t have in their bank accounts.
RA and Sanzaar officials have been meeting since Sunday to try to work out how to salvage something from the crisis. Indications are that RA are considering playing local Super Rugby derbies, including matches with the dumped Western Force, to keep players fit and to maintain some cash flow.
It would be like a beefed-up version of the second-tier National Rugby Championship with Wallabies and leading Super Rugby players involved, but is unlikely to be the financial saviour of Super Rugby alone.
With a federal government ban on crowds of more than 500, any games would be played in empty stadiums, which means no gate-money. And there is also the possibility sponsors will pull out.
If Australia were forced into an Italian-style lock-down because of the coronavirus, there could be restrictions on interstate travel, which would prevent teams playing against each other unless they all domiciled in one city.
There was talk of Super Rugby players playing in the Sydney and Brisbane premier club competitions, but RA has cancelled all community rugby until 2 May for health reasons, which begs the question: why should professional players be expected to play if it is too risky for amateurs?
Part of the reason would be to keep players active in the unlikely event Super Rugby resumed before the finals in June, but rugby administrators may also be anxious about providing content for broadcaster Fox Sports.
Will Fox Sports demand a refund on its $57m payment to broadcast Super Rugby if it can only show local derbies or no games at all? This is a time when there needs to be close cooperation between professional sports and their broadcast partners.
The disruption of the competition comes at a delicate time as RA attempts to re-negotiate its broadcast rights. Relations with Fox Sports have already been strained by RA’s decision to take the rights to an open tender. Optus appears to be the front-runner to pick up the rights, but it is yet to be seen how the shutdown will influence the telecommunication company’s thinking about the game and the price it is prepared to pay.
If there are no more Super Rugby games this year, or even a few local derbies, questions will be raised about how clubs can survive financially. RA – and perhaps the individual franchises – will no doubt seek government handouts, but they will need to get in the queue. Every business in the land, sporting or otherwise, will be putting their hand up, and rugby may not be high on the government’s list of priorities.
Perhaps RA could appeal to World Rugby, which was expected to rake in $US449m in commercial revenues from the 2019 World Cup in Japan. But once again, every union around the globe would need to get in line.
Australian rugby will be in a world of pain over the next few months and that pain will need to be shared if the game is to survive. A huge amount of a Super Rugby club’s budget is absorbed by player payments. If players on million-dollar contracts are not playing, or not playing in front of crowds, it is reasonable they take a pay cut, but chief-executives and coaches should set an example.
A crisis can be a transformative event. When Australian rugby returns to some kind of normality, assuming it ever does, it will need to think about doing things differently in the future. And if Australian rugby should ever receive another windfall like it did in 2003, it will have to invest it in a wealth fund to protect the game against future shocks.