Super Rugby

Sustainability of Super Rugby keeps ARU Boss awake at night




The Australian Rugby Union is looking for a new Super Rugby title sponsor after current sponsor Asteron Life elected not to renew the deal leaving Rugby Union in Australia under severe stress financially.

The decision is a severe financial setback for the ARU and it’s struggling Super Rugby teams as it is expected to result in a reduction in funding of $300,000 each for the five Super Rugby teams.

This comes after the ARU failed to sign a sponsor for the recent Test series against England and the upcoming Rugby Championship, which is expected to cost the Super Rugby franchises aa further $200,000 each in reduced funding.

The ARU have reportedly told their cash strapped Super Rugby franchises that they are doing everything they can to find a replacement sponsor.

“Asteron Life’s decision not to extend its partnership comes as a result of a shift in business strategy after a successful three-year partnership with rugby,” an ARU spokesman told the Australian.

“ARU is in positive discussions with existing and potential ARU partners about the Australian Super Rugby naming rights for the 2017 season.”

According to the Australian Financial review all five of the Australian Super Rugby teams recorded financial losses last year.

In 2016 attendances dropped almost entirely across the board and there was only one Australian appearance in the seven Super Rugby play off matches.

Earlier this season the ARU brought in consulting firm Accenture and asked them to find cost savings at all five of the clubs despite the ARU signing a new five-year $285 million broadcast contract which kicked in this season.

It was reported earlier this year that the ARU had bought the intellectual property rights of the Western Force, including their Super Rugby licence, in a deal believed to be worth $800,000 to help the Perth franchise deal with financial difficulty.

Then in the first first week of June the ARU stepped in with an alliance agreement, enabling the Western Force to continue as a Western Australian team but as ARU employees.

The Rebels are now privately owned but have been propped up by the ARU for years and the established franchises Waratahs, Reds and the Brumbies are experiencing financial stress.

ARU chief executive Bill Pulver visited Perth last week to discuss a range of options with the Brumbies to ensure their long-term financial viability and says that he believes there needs to be “structural change” in Canberra.

“What keeps me awake at night still is the long-term financial sustainability of Super Rugby,” Pulver told the Australian.

“It’s not a Canberra-only issue. I’m in a deep dialogue with all the Super Rugby clubs. The Western Force model we put in place was created out of an urgent short-term financial situation. Canberra is nowhere near the situation we found in Western Australia.

“Their financial forecasts still look pretty solid, but to some extent we are trying to get in front of the issue.”

“What I don’t want is to get a year or two down the track and find we are in a bigger problem than we would have been.”

The Brumbies are however anxiously waiting to hear if they will lose their their major sponsor Aquis, who signed an $8 million, six-year deal at the start of 2015.

The deal was meant to secure the club’s financial future but the Entertainment company Aquis will now reconsider its continued involvement with the Brumbies after the ACT election on October 15 and its consequences on government attitude towards poker machines.

Pulver says that he wants the Super Rugby franchises to consider private equity partnerships but none of the teams – aside from the Rebels – have been able to attract investors so he is looking at collaborating more closely with the Super Rugby franchises and centralising them.

“I think there is an opportunity for all Super Rugby clubs and the governing body to collaborate more effectively, particularly in some key areas,” Pulver said.

“There are also some back office functions that not all Super Rugby clubs need to have when we’ve got them duplicated in the ARU.

“It is describing the sort of evolution I would like to see in Canberra, but it is the same for every other Super Rugby club.

“When an entity starts to get to the pointy end of financial distress, the longer you wait quite often the more difficult it is to resolve. That’s why we are doing a lot of the planning now.”

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