E
El Barto
Guest
One of the main backers of the Melbourne Super expansion franchise may pull out of the venture and redirect financial support to Queensland Reds after reaching an impasse with the ARU over funding.
Mining magnate Kevin Maloney was a leading member of a consortium of potential private owners negotiating with the ARU to acquire the licence to operate the Melbourne team, which will enter the Super rugby series in 2011.
But it is understood negotiations have been strained over the size of the ARU grant to the fledgling franchise and that Maloney and another potential investor, Craig Dunn, are no longer involved. An informed source has told The Australian newspaper Maloney is now looking at investing in the Reds instead.
The loss of Maloney's financial backing would be a major setback to the Melbourne franchise, which has to be up and running by early next year.
The side's creation marks a departure from the traditional state and territory owned Super rugby teams.
The ARU provides the Brumbies, NSW Waratahs, Western Force and Reds with an annual grant of $4.3 million.
Ideally, the ARU would not have to make this grant to the privately owned Melbourne franchise, but the potential investors have argued they need the funds to make a small return on their investment of $5m to $10m, which will be eaten up by start-up costs.
The investors believe they are entitled to the grant because it comes out of revenue generated by the ARU's broadcasting deal.
The ARU has softened its stance on the issue, increasing its offer from $2.1m to $3m. There is a feeling at ARU headquarters that if the national union stumped up the whole $3m, it might as well run the team itself.
But this would place the ARU in a position of conflict of interest with the other state-run teams.
Mining magnate Kevin Maloney was a leading member of a consortium of potential private owners negotiating with the ARU to acquire the licence to operate the Melbourne team, which will enter the Super rugby series in 2011.
But it is understood negotiations have been strained over the size of the ARU grant to the fledgling franchise and that Maloney and another potential investor, Craig Dunn, are no longer involved. An informed source has told The Australian newspaper Maloney is now looking at investing in the Reds instead.
The loss of Maloney's financial backing would be a major setback to the Melbourne franchise, which has to be up and running by early next year.
The side's creation marks a departure from the traditional state and territory owned Super rugby teams.
The ARU provides the Brumbies, NSW Waratahs, Western Force and Reds with an annual grant of $4.3 million.
Ideally, the ARU would not have to make this grant to the privately owned Melbourne franchise, but the potential investors have argued they need the funds to make a small return on their investment of $5m to $10m, which will be eaten up by start-up costs.
The investors believe they are entitled to the grant because it comes out of revenue generated by the ARU's broadcasting deal.
The ARU has softened its stance on the issue, increasing its offer from $2.1m to $3m. There is a feeling at ARU headquarters that if the national union stumped up the whole $3m, it might as well run the team itself.
But this would place the ARU in a position of conflict of interest with the other state-run teams.
