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O’Neill: ‘ARU needs financial plan’

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The reality has begun to sink in for Australian Rugby Union (ARU) Chief Executive John O’Neill, as the ARU’s financial woes continued unabated on Tuesday.

O’Neill announced to the media that the ARU’s reserves had dropped to $16-million (four million below their initial target of $20-million), with Australian rugby’s boss admitting: “We are well below the [$20-million] limit; we need to restore it, and we need to restore it pretty quickly.”

It is believed that the woeful financial situation could have a negative impact on the Australian game as a whole; for instance, the recently launched Mazda ARU championships will be severely affected by the financial instability within the ARU.

O’Neill continued: “Unless the ARU remains financially whole and stable, the rest of rugby is at a risk. Many of the smaller states are principally funded by us [ARU]. If we are not strong financially, then the game could be at risk.

“It is a painful loss. That means the capital position by the end of this year will move to just under $16-million.”

The ARU chief was so concerned that he preferred to err on the side of caution in terms of his plans to stabilise the ARU’s finances. Although the ARU had insisted that the target for reserve funding be set at $20-million, O’Neill is looking beyond that.

“I would prefer to be closer to $25-million than $20-million, but even in the period I have been away, figures that can go wrong are still there,” said O’Neill, who plans to achieve this target by 2011.

“Rainy-day money – a strong balance sheet – is an absolute no-brainer for the ARU. We need to be eternally conscious that we don’t whittle away under $20-million,” added O’Neill.

Having a strategy is one thing, but implementing that strategy will be most critical for the ARU. O’Neill’s idea to deposit 2003 World Cup money in an investment trust has been shot done already, but the ARU chief still believes the Board will buy into his idea at a later stage.

“There is no reason why not,” O’Neill told the assembled press corps.

“If we got to $25-million, you would look at it. Then you would say: ‘OK, we are going to lock it up, put it into an investment foundation and the interest income will go into the community game’,” concluded O’Neill, explaining the benefits of the trust.

The trust, explained O’Neill, was merely one of many measures that would be taken improve the financial standing of Australian rugby. The others include: a fundamental business review; only accepting full-strength teams in the country; greater service sharing between the ARU and the states; demanding Australian teams not only win but entertain and introducing a stricter player-payment system.

365 Digital

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