Brumbies see ARU bailout as last resort
BY LEE GASKIN
26 Dec, 2011 01:00 AM
ACT Brumbies chief executive Andrew Fagan insists an emergency SOS to the Australian Rugby Union is a last resort amid hopes of resurrecting a $4million sponsorship deal.
The Brumbies have less than two months to fill the gaping financial hole left by Chinese technology giant Huawei, which backed out of a four-year contract to be the Super Rugby franchise's naming-rights sponsor.
Both parties are attempting to salvage the deal, which came unstuck when the telecommunications company, which is the largest privately owned firm in China, pulled the pin last Thursday because of unforseen circumstances.
Huawei, which has more than 95,000 employees in 140 countries, was also previously in discussions with the Canberra Raiders, which are also still without a major sponsor for the upcoming NRL season.
If no deal can be struck with Huawei, or another sponsor found before the Super Rugby season kicks off on February24, the Brumbies will turn to the ARU to provide a cash injection to cover their immediate expenses.
''If we need assistance, the ARU has assured us that they will provide it,'' Fagan said.
''But our first step is to see if anything can be resolved with Huawei.
''Subject to it being delayed or deferred, we need to look for another partner.
''If that takes longer than we would like, then the ARU sits there as one organisation that could provide cash-flow support.
''It's not a long-term issue for us, it's a short-term cash flow issue.''
The ARU has its own financial difficulties having recorded a loss of $8million this year.
But it has shown in bailing out the NSW Waratahs and the Queensland Reds that it is prepared to lend a hand to Australian provinces. With the club sitting on a potential goldmine with the redevelopment of their Griffith headquarters, any rescue package would likely be a temporary measure.
Talks with Huawei began in July after the Brumbies were informed late last year that Computer Associates would be ending its 15-year association as the club's major sponsor.
Fagan said he received confirmation last month that Huawei had settled on the Brumbies to be its first foray into sports sponsorship.
''It got to the stage of approving jersey designs,'' Fagan said.
''We were awaiting the global board's rubbing stamping of the agreement, which I understand was received last week.
''There were some unrelated issues that arose that Huawei needed to address, that essentially meant instead of signing contracts on Thursday we received notification that they weren't able to confirm the sponsorship.
''I hope within the next six to eight weeks we'll have it resolved.''
A spokesman for Huawei said the Brumbies were one of several short-listed candidates, along with the Raiders.
''Unfortunately because [the Brumbies'] season starts so early, their deadline to lock in a sponsorship was too soon for us,'' the spokesman said.
Raiders Group chief executive Simon Hawkins and the ARU declined to comment on the matter.