The Awful Truth About The ARU's Financial Position

[Inside Shoulder]

I dont think I've ever made any secret of the fact that I am a long term mate of Gary Flowers. I rang him the day he was appointed CEO and said to him that his biggest challenge, based on my historical observations, would be to get NSW and QLD pulling or pushing in the same direction.
My naiveté lay in thinking that the ARU was free of the influence of JON.
In my view Flowers never got a clear run at the job. JON was white anting and, it appears, left behind some insurgents who facilitated his return.
So when I read this comparison in Scott's excellent analysis my blood boiled:

To put that $8.3 million overhead increase in some perspective, the cost of the ARC that John O’Neil was so adamant we couldn’t afford was $5.5 million, the amount the ARU spent on community rugby in 2012 was $5 million! So, the increase in “Corporate” overheads could easily have paid for a better structured ARC competition and a doubling of the money put into community rugby.

In 1 year O'Neill took out of the game he claimed to love $2.2m - half what it would have cost to run the ARC went to one man.
As I have said before, to much criticism, O'Neill's pre-rugby working life bears some analysis (though it is pointless now).
Rugby made this man, who just happened to be working late one night when Nick Whitlam needed someone to come with him to a NSWRU meeting, as the story has been relayed to me.
The rest, as they say, is history.
When we had the money we did not spend it on the foundations. The foundations are crumbling.
Ever wondered why NZ agreed to a one-off Bledisloe on 28.7.1979 - because we were broke and they thought that was the best way to help us (as well as supplying the jerseys, so I have heard).

 

[wamberal]

The story I heard about JON was that when Nick Whitlam was looking around for somebody to promote into the top job at the old Rural Bank (soon to be State Bank) he noticed JON working late - unheard of in the Rural Bank - and decided that he would be the next CEO. JON was actually killing time before trundling off to coach the Sydney Uni seconds.

JON had been with the Rural Bank for 17 years, apparently, at the time. I knew a bit about the Rural Bank, and I can tell you it was not exactly a hotbed of ability and ambition.

I am not aware that Whitlam had any particular interest in rugby.

 

[Budgie]

Lies, damned lies, statistics and financial reports.

Don't know what the fuss is about. Everyone does it and has been doing it for years.

O'Neill isn't the first CEO to look after himself first and won't be the last. Same with the Board.

Any one thinking different is deluding themselves.

 

[I like to watch]

It is expected that JON would try to extract the maximum amount possible.
It is not expected that the Board would be so inept, that JON was able to pull their pants down to the extent that he did.
However, now that they have shown their colours, it is not surprising that JON's replacement is cut from the same cloth.
It's business as usual.
I have no doubt that Pulver will hit his KPI's and earn a big bonus each year.I also have no doubt there will be no changes,and in a decade the game will face the same challenges that it does today.
Pulver is a typical corporate spin guy.Spin guys never ever achieve anything.They just change the ways things are reported to give the illusion of change/improvement.

 

[Man on the hill]

Ignoring the grossness (in every sense of the word) of JON's annual salary & final payout, the average cost of running the ARU from 2005 - 2010 [ignoring the one off expense of the ARC] was $79M and had been reducing steadily since 2006! In the last 2 years it has jumped to $88M & $105M. WHY?


Reviewing a few of the lines?

· How is it that we had no marketing expenses for the 4 years 2007 - 2010? and now the expense is almost 4 times more than in 2005 & 2006?

· What do we get for the "Commission & Servicing Costs" of $3.9M & $2.2M across the 2 last years?

· Knowing that "allocations to states unions" have been cut back in recent years due to state employees now being on the ARU payroll explains part of the fluctuation in ARU corporate spending, but it beggars the question of what was not being done in 2009 & 2008? Expenditures of $14M - $15M [2009 & 2010] followed by $20M & $21M [2011 & 2012]?

From a low water mark of $2.7M in 2007, community funding has grown steadily to $5.0M in 2012. But again, it beggars the question of what was happening in 2006 when spending was a hefty $5.5M?


But the biggest question is reserved for the most elite programs - combining the two tables provided and then summing Wallabies Team Costs, National Sevens Teams Costs, High Performance & Other National teams, Match day Operations and Commercial Operations gives expenditures of:

2012 = $31,712

2011 = $20,002

2010 = $23,950

2009 = $22,942

 

[Quick Hands]

I dont think I've ever made any secret of the fact that I am a long term mate of Gary Flowers. I rang him the day he was appointed CEO and said to him that his biggest challenge, based on my historical observations, would be to get NSW and QLD pulling or pushing in the same direction.
My naiveté lay in thinking that the ARU was free of the influence of JON.
In my view Flowers never got a clear run at the job. JON was white anting and, it appears, left behind some insurgents who facilitated his return.
So when I read this comparison in Scott's excellent analysis my blood boiled:


In 1 year O'Neill took out of the game he claimed to love $2.2m - half what it would have cost to run the ARC went to one man.
As I have said before, to much criticism, O'Neill's pre-rugby working life bears some analysis (though it is pointless now).
Rugby made this man, who just happened to be working late one night when Nick Whitlam needed someone to come with him to a NSWRU meeting, as the story has been relayed to me.
The rest, as they say, is history.
When we had the money we did not spend it on the foundations. The foundations are crumbling.
Ever wondered why NZ agreed to a one-off Bledisloe on 28.7.1979 - because we were broke and they thought that was the best way to help us (as well as supplying the jerseys, so I have heard).

Well said and welcome back.

See also the participation thread for even more depressing news.

 

[Inside Shoulder]

Well said and welcome back.

See also the participation thread for even more depressing news.

Cheers.
I should add in response to I like to watch , that I can understand why people seek to maximize their incomes. That's fine.
JON's public utterances suggested that rugby was his abiding love and that his most bitter disappointment in life was not making the SJC 1st XV at school - so they made him an Honorary member and gave him a jumper (short pause while I dry the tears from eyes).
He so loved the game that he took from it $2.2m in his last year when it was making a colossal loss.
This is not Lehmann Brothers.
This is a social institution whose only purpose, at the end of the day, is to foster the game. It is not a means to an end, like every other business, it is the end - this is the goal.
How much fostering did he do? Scrapped the ARC because it was going to cost twice his salary - too expensive he says: how many blokes could have made a modest living from that comp?
If the institution cannot support those who love it by turning money back into the juniors etc. then what purpose is it serving?
Unlike an ordinary business, this is not about a return to shareholders.
Finally, did he really do a job that was worthy of $2.2m p.a? I missed it if he did.
Regrettably, I think ILTW is correct when says that the Pulveriser is cut from the same cloth, and by that I only mean that he comes from a similar background not that he is an egomaniac.

 

[Quick Hands]

Cheers.
I should add in response to I like to watch , that I can understand why people seek to maximize their incomes. That's fine.
JON's public utterances suggested that rugby was his abiding love and that his most bitter disappointment in life was not making the SJC 1st XV at school - so they made him an Honorary member and gave him a jumper (short pause while I dry the tears from eyes).
He so loved the game that he took from it $2.2m in his last year when it was making a colossal loss.
This is not Lehmann Brothers.
This is a social institution whose only purpose, at the end of the day, is to foster the game. It is not a means to an end, like every other business, it is the end - this is the goal.
How much fostering did he do? Scrapped the ARC because it was going to cost twice his salary - too expensive he says: how many blokes could have made a modest living from that comp?
If the institution cannot support those who love it by turning money back into the juniors etc. then what purpose is it serving?
Unlike an ordinary business, this is not about a return to shareholders.
Finally, did he really do a job that was worthy of $2.2m p.a? I missed it if he did.
Regrettably, I think ILTW is correct when says that the Pulveriser is cut from the same cloth, and by that I only mean that he comes from a similar background not that he is an egomaniac.

Unfortunately you're spot on with this analysis.

It seems to be the fashion with sporting organisations to headhunt these highly paid corporate types as CEOs. These are the same people who pocket obscene salaries with multi-million dollar bonuses (even when their company turns in a loss), while at the same time rail against low paid employees getting penalty rates or taking sickies.

Surround yourself with sycophants, commission reports which tell everyone how wonderful you are and how well things are going and then pocket a large payout on the way out the door before things fall apart. Ask employees of QANTAS or Telstra all about it.

 

[Inside Shoulder]

Is the "vision thing" for the ARU a board or CEO responsibility?

 

[Braveheart81]

Is the "vision thing" for the ARU a board or CEO responsibility?

It should absolutely be the board driving the direction and vision of the ARU.

The CEO is there to implement and achieve that vision.

 

[Hugh Jarse]

Exclusive to G&GR: Secret ARU Boardroom CCTV footage from the "Future Vision" workshop session:

 

[Inside Shoulder]

It should absolutely be the board driving the direction and vision of the ARU.

The CEO is there to implement and achieve that vision.

That's what I reckoned.
Do you think it makes any difference that the board is unpaid (I assume) and its therefore a part time role?

 

[gel]

These guys are all meant to be high-flying, highly educated corporate types.

There are millions of people in Europe, United States and other western nations asking the same question of their governments and their financial sectors.

It's disappointing, isn't it!?

 

[Braveheart81]

That's what I reckoned.
Do you think it makes any difference that the board is unpaid (I assume) and its therefore a part time role?

The board is paid something. Hawker was paid $36k in the 2012 year and most of the other boardmembers earned roughly $20k or so depending on how long they were in the job during the year.

That is enough to make them turn up to meetings and dedicate a reasonable amount of time to the role outside of meetings (in terms of being up to date with what is happening and thinking about what the ARU should be doing).

I absolutely believe the board is the group that needs to be providing the vision and direction of Australian Rugby. If they aren't, they should be on the board.

 

[Inside Shoulder]

The board is paid something. Hawker was paid $36k in the 2012 year and most of the other boardmembers earned roughly $20k or so depending on how long they were in the job during the year.

That is enough to make them turn up to meetings and dedicate a reasonable amount of time to the role outside of meetings (in terms of being up to date with what is happening and thinking about what the ARU should be doing).

I absolutely believe the board is the group that needs to be providing the vision and direction of Australian Rugby. If they aren't, they should be on the board.

But that's just pin money.
And judging by the other thread concerning participation numbers the information they are being given, assuming it is the same as is being published to the public, is insufficiently accurate to permit any board member, motivated or otherwise, to do anything.
A significant issue, in my view, is that Eales, Gregan and Pulver all have connections to a single flourishing junior club. In the media so does Kearns, to the same club!
There's no one anywhere to query WTF these blokes are doing.

 

[Hugh Jarse]

^^^^ That same junior club has had a habit of registering players, domiciled from without its normal boundaries, who don't seem to play much for the village club. Come State championship time, these players appear from out of the woodwork for the District Rep team, displacing kids who play village club footy week in week out. Hardly a surprise when this Presidents Selection XV go on to win the State titles, or end up getting beaten by another District employing a "if you can't beat them join them" approach to their District Rep team selections.

Good example being set to encourage participation.

 

[Inside Shoulder]

^^^^ That same junior club has had a habit of registering players, domiciled from without its normal boundaries, who don't seem to play much for the village club. Come State championship time, these players appear from out of the woodwork for the District Rep team, displacing kids who play village club footy week in week out. Hardly a surprise when this Presidents Selection XV go on to win the State titles, or end up getting beaten by another District employing a "if you can't beat them join them" approach to their District Rep team selections.

Good example being set to encourage participation.

Well, I think Kafe might be connected to that district club through a child as well - so even less chance of a sensible question being asked about the west of Sydney

 

[Quick Hands]

Is the "vision thing" for the ARU a board or CEO responsibility?

One suspects that JON's vision was limited to a mirror.

 

[Inside Shoulder]

He rules us from the grave

 

[Sully]

I can't believe we paid over $2000000 for a casual employee.

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