I won't bore you chasmac with my many posts on this core subject, but essentially I have argued that a system of linked franchises that is principally governed by the ARU in terms of just one element of its costs - namely player costs in this case - but where the actual comprehensive quality of each franchise's management is not controlled or governed at all - is extraordinarily unbalanced and will as day follows night lead to, best case, mediocrity of systemic outcomes, or, worst case, lead to bankruptcies and regular crisis bail-outs.
For example, if a management of an RU must be 'protected' from, as you say, bankruptcy risk via a single central cost control and that that local management is simply unable to control that cost line prudently by themselves, then what type of local management competency do you have in first place that is so poor at controlling their total business?
Essentially, what I argue is that _the_ critical task of any franchise owner is to ensure that its principal franchisees are all well led and managed in terms of total capability, that is, the board and CEO/top management are proven competent to build and sustain a financially and community viable business in their franchise area. Overall KPIs and balanced performance goals should be set that define such performance, such as: annual revenue growth and profitability; average rank placings within the S15, expansion of Premier Grade, total net player registrations, code market share, local rate of elite player development, etc. These should be holistically managed by, say, formal central assessments every 2 years. The central body - the ARU - should not be, nor need to be, nanny-like micro-managing single cost parameters within a franchise IF the general management of that franchise is assessed as properly competent and will meet or has met the broad quality-affirming KPIs I mention above (or similar ones). If the core KPIs are not being met over a fair time period, then the entire board and management of that franchise must be able to be immediately replaced by the central 'franchise owner' - and the threat of this change must be real and enforced where required.
All successful franchised operations run on this basis - none that I have ever seen are run on the principle 'we'll control what you spend on one or two cost parameters, but we really don't care if you stuff everything else up, lose market share and have a generally poor business that never achieves very much'. And what investors would ever back an enterprise run on such a ridiculous and unbalanced premise? But this is precisely how, in effect, Australian rugby conducts itself. And look at the actual quality of outcomes thus achieved.
