Rugby Australia will kick off talks to raise $150m or more from private equity within weeks, as it also considers a fresh loan from a US investment firm to shore up its short-term financing.
RA chairman Hamish McLennan said the alternatives of potentially engaging a private equity deal or going for a bigger cash loan show the financial future of the code is growing stronger.
“Thankfully we’ve got more optionality now with a rugby world cup coming,” McLennan said. “We could borrow more money from Ares, do a convertible note with another institution, or do a classic style private equity deal.”
“Andy (Marinos, the RA chief executive) and the team have done a great job, stopping the financial haemorrhaging at RA and we are operating off a lessor cost base. We hope to turn a small profit this year, which is a major breakthrough.”
Australia is hoping to net a $100m profit from the World Cup in 2027. “A lot of that will be quarantined into an endowment fund … that will be passed onto the game’s grassroots,” McLennan said. “We had a near death experience (after the 2003 World Cup). We nearly went under.”
RA, which hopes to turn a small profit this year, is set to formally meet with global private equity giants CVC and Silver Lake in August in what could be the latest move by private equity into Australian sport