Australian Rugby / RA

[LeCheese]

Professional sport is a business, and successful businesses don’t pay employees random amounts while losing money every year

No, but successful businesses will pay an assured competitive rate compared to the market to attract and retain talent, while also offering incentives on top.

As it is, we can't compete with the guaranteed money and incentives overseas. Reducing a player's guaranteed income (particularly by as much as 50%, as suggested earlier) and moving to a purely performance-based model will not improve the state of the game in this country.

 

[The Ghost of Raelene]

Stephen Moore better keep that job at BMS.

 

[Wallaby Man]

This is for the QRU, not the Queensland Reds, but they have been reporting huge profits

View attachment 19494
It's not real though, as it includes Ballymore grants

It costs something like $14m to run a Super Rugby Team. $5m for the player's salaries, and the rest on coaches, match day, marketing, corporate etc etc

The issue is revenue for most of the teams. The Reds are in a pretty good spot. The Rebels as an example, had expenses of $14m and revenue of $9m.

That’s a line from the revenue, not an EBIT

 

[Adam84]

I have seen these numbers touted before and perhaps some clever accounting at the end of financial year reporting but there is 0 chance they are correct or some favorable reporting where the deal includes lots of contra worth up to that amount. If the Reds were legit getting $6.6m plus the annual grant of roughly $3m plus ticket sales, corporate boxes, merchandise etc, they would be reporting multimillion dollar profits.

$6.6m covers 1.2x the salary cap which would be considerably their highest expense.

QRU financial reports are independently audited and available online.. unlike Rebels and Brumbies..
Current administration have cleared $9 million in debt since 2016

 

[Strewthcobber]

That’s a line from the revenue, not an EBIT

It's not revenue, it's from the profit and loss statement. Revenue was $36.7m

(I agree, while it is a statutory profit, it's not real because of the Ballymore grants)

 

[Proud Pig]

Rugby does not earn sufficient revenue to continue as it does.
If you run a small business you have to pay your employees in alignment to the revenue that you accrue.
A high street computer shop does not compete for staff with Google because they can't pay the same salary and if they try it is not sustainable and bye bye Jonny's IT Repairs.
This is a simplified view of the landscape but no less relevant.

Rugby does not have a direct comparison to any other sport in Australia, probably Soccer is the closest comparison in the situation it finds itself in.
Sheffield Shield would die on the vine if Cricket Australia had similar revenues to Rugby Australia. It survives not because Sheffield Shield is self-sustaining but because it is completely funded by International cricket and the BBL.
Rugby trying to compete with NRL and AFL for players is a losing strategy. Yes, we will get the occasional player to switch to Rugby such as Joseph Sua'ali'i but that is only because Rugby is offering him an obscene salary that it simply cannot afford.

Rugby needs to accept it's position as a second or third tier sport in Australia and that means accepting that all the best players can make more money overseas than they can at home. Slash the salary cap for Australian teams to $2m or similar, cut the salary of the RA CEO and rest of the executive to more manageable amounts (I don't know what they are now but at one stage Raelene Castle was earning in excess of $800K). Bring expenses down to a more realistic level that RA can sustain. It will be at the expense of the quality of the local product and will mean we will not be competitive against the New Zealand sides (I question if we truly are now). However, not controlling costs will eventually mean the end of Rugby in Australia and the Sugar hits we will get from the BIL and the World Cup won't be enough to save us.

 

[Tomthumb]

No, but successful businesses will pay an assured competitive rate compared to the market to attract and retain talent, while also offering incentives on top.

As it is, we can't compete with the guaranteed money and incentives overseas. Reducing a player's guaranteed income (particularly by as much as 50%, as suggested earlier) and moving to a purely performance-based model will not improve the state of the game in this country.

Honestly, it couldn't make it any worse. Diabolical Super Results, a virtual tier 2 national team and a union hemorrhaging money

At a certain point, we need to actually look at what these players we supposedly "need" to overpay to keep in Australia are adding

 

[stillmissit]

I think the more likely owners/investors would be a little older (semi-retired or recently retired) and motivated more by factors like ego, the desire to leave a legacy, boredom/search for novelty, and existential angst.

Basically owning a pro sports team in your preferred sport would be cool and interesting for a lot of people, that's enough motivation. It's more like a luxury purchase, or gambling with money you can afford to lose for entertainment.

Omar, you aren't talking about Australia we have very few of those kind of people. Have a look at the ABS at the top 1% of earners it might open your eyes a bit.

 

[Tomthumb]

If your position is that Rugby Union doesn't have a place as a professional sport in Australia, that's fine. Nothing stops Australian Rugby utilising aa similar model to Argentina.

If run properly, it has a place

 

[Tomthumb]

The Rebels as an example, had expenses of $14m and revenue of $9m.

Haha how in the world was this allowed to happen. Who was running this? Krusty the Clown?

 

[LeCheese]

Honestly, it couldn't make it any worse. Diabolical Super Results, a virtual tier 2 national team and a union hemorrhaging money

At a certain point, we need to actually look at what these players we supposedly "need" to overpay to keep in Australia are adding

Substantially reducing the base pay (read: attractiveness to players) to a mere fraction of what a player could be earning overseas, when we're already struggling to retain key talent in the competition, couldn't make things any worse?

 

[Adam84]

Honestly, it couldn't make it any worse. Diabolical Super Results, a virtual tier 2 national team and a union hemorrhaging money

At a certain point, we need to actually look at what these players we supposedly "need" to overpay to keep in Australia are adding

You can have a discussion about cutting costs and fiscal responsibility for player's wages without needing to completely change their income to an incentive/bonus scheme.

I work in an industry where we're competing in a highly competitive market for talent; incentive and bonus schemes are part of the solution for recruitment and retention, but finding quantifiable and measurable KPIs for bonus payment makes it a highly subjective topic. We cap bonus schemes at 30% of their base salary, with most sitting less then that.

For Wallabies, most would be on about 20% incentive/bonus loading from matchday payments if they're playing a full season. I really don't see how cutting the base wage to less then that would assist, or what quantifiable metric you would use to assess/justify further.

 

[Tomthumb]

Substantially reducing the base pay (read: attractiveness to players) to a mere fraction of what a player could be earning overseas, when we're already struggling to retain key talent in the competition, couldn't make things any worse?

We are kind of at rock bottom, no?

 

[LeCheese]

We are kind of at rock bottom, no?

 

[Tomthumb]

You can have a discussion about cutting costs and fiscal responsibility for player's wages without needing to completely change their income to an incentive/bonus scheme.

I work in an industry where we're competing in a highly competitive market for talent; incentive and bonus schemes are part of the solution for recruitment and retention, but finding quantifiable and measurable KPIs for bonus payment makes it a highly subjective topic. We cap bonus schemes at 30% of their base salary, with most sitting less then that.

For Wallabies, most would be on about 20% incentive/bonus loading from matchday payments if they're playing a full season. I really don't see how cutting the base wage to less then that would assist, or what quantifiable metric you would use to assess/justify further.

Your schemes and caps and how they are based would be worked out based on the profitability of your business though, which makes perfect sense

I'm not saying to pay every player a pittance, but the fact is the current model is redundant and needs to change. So I think we need to be more open to ideas that provide long term sustainability instead of worrying about losing some overpaid players that haven't led to any on-field success

 

[Adam84]

Your schemes and caps and how they are based would be worked out based on the profitability of your business though, which makes perfect sense

I'm not saying to pay every player a pittance, but the fact is the current model is redundant and needs to change. So I think we need to be more open to ideas that provide long term sustainability instead of worrying about losing some overpaid players that haven't led to any on-field success

I don't think anyone disagrees with that; just debating the mechanism of achieving it.

 

[Tomthumb]

I don't think anyone disagrees with that; just debating the mechanism of achieving it.

Fair point. I guess I'm just less worried about losing players as they have been leaving regardless and the ones that have been paid to stay have added nothing in terms of on-field success

 

[Omar Comin']

Omar, you aren't talking about Australia we have very few of those kind of people. Have a look at the ABS at the top 1% of earners it might open your eyes a bit.

Incomes are less relevant than wealth. There's ~4000 individuals in Australia with a net wealth of over $100 million. How many more are between 50-100? And I think we all know rugby union would be more popular among this cohort than it is in the general population, at least those in Sydney and Brisbane.

I'm not suggesting there's a whole lot of rugby supporting multi-billionaire's out there like Twiggy, but there are a lot more people a tier or 2 of wealth down. I don't know for sure, I'd just be shocked if there aren't a fair few who'd be keen on owning or part owning a professional rugby team if we ever went down the pro domestic competition route. You could probably get a handful of consortiums out of Mosman alone.

 

[Strewthcobber]

Incomes are less relevant than wealth. There's ~4000 individuals in Australia with a net wealth of over $100 million. How many more are between 50-100? And I think we all know rugby union would be more popular among this cohort than it is in the general population, at least those in Sydney and Brisbane.

I'm not suggesting there's a whole lot of rugby supporting multi-billionaire's out there like Twiggy, but there are a lot more people a tier or 2 of wealth down. I don't know for sure, I'd just be shocked if there aren't a fair few who'd be keen on owning or part owning a professional rugby team if we ever went down the pro domestic competition route. You could probably get a handful of consortiums out of Mosman alone.

They are all at the Swans these days aren't they?

 

[Omar Comin']

They are all at the Swans these days aren't they?

Sure. What a challenge it would be to claw some of those lost/absent fans back to rugby. I'm sure the opportunity to own and build up a new professional rugby club in Sydney would provide a great sense of purpose for 1 or more wealthy rugby lovers.