The Awful Truth About The ARU's Financial Position

[Inside Shoulder]

Demetriou's salary package was $1.88m in 2012, $1.8m in 2011 and $2.2m in 2010.

http://www.afl.com.au/news/2013-03-18/demetriou-earns-his-crust

I fail to understand why anyone should be earning bonuses in a non profit organisation.

Bill Pulver is talking a good game at them moment, let's see what he delivers after a year in the job.

So the ARU thought JON was doing as good a job as, or better than, Dimitriou.
Just think about that for a while.
It's frigging laughable - why am I crying then?


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[Hugh Jarse]

With a $12b black hole in Federal Revenue, one wonders if Federal Treasurery have been doing the books for ARU, but that is another story.

On the back of the inevitable belt tightening that will happen as Wayne Swan tries to sort out the Federal Budget blow out, and targeting of the corporate sector to cover the shortfall, it will inevitably become more difficult to obtain corporate sponsorship for heavensgame.

ARU are already running a deficit with some unexplained Balance sheet issues. What hope is there for the future as the corporate discretionary spending dries up?

 

[Richo]

So the ARU thought JON was doing as good a job as, or better than, Dimitriou.
Just think about that for a while.
It's frigging laughable - why am I crying then?

Yep. This is actually a huge deal, IMO. I'm no accountant and can't wade into all this restating blah blah blah, but I'm shocked that the CEO of the ARU could make more than that of the AFL. It's absolutely preposterous. What conceivable metric would there be for this? Particularly when the bloke was moonlighting elsewhere.

Ridiculous.

 

[Scott Allen]

Part 3 now published - http://www.greenandgoldrugby.com/where-to-now-for-the-aru/

There are some big issues with the financial position of the ARU - both in terms of the cash position and the net assets.

Also, the differences between the ARU and NZRU in relation to strategic planning are massive.

 

[BPC]

How did they account for the ARU Constitutional Reform Bribes to QRU (QC (Quade Cooper) topup) and NSWRU (Folou topup)?

Under player payments for Wobs or will these be in next years accounts?

If Israel only stays for a year it may come under hospitaility rather than player payments.

 

[Hugh Jarse]

Like the Lord of the Rings, the third part is the Best. Thanks Scott for taking the time to uncover the facts like this.

One key difference in NZ rugby is that there are about 30 member unions with voting rights at the NZRU. Auckland, Canterbury, Otago and Wellington have a fair amount of influence, but the "heartland" unions and the second tier mobs like Taranaki, Nelson, Hawkes Bay, Northland etc are very aggressively interested in participating in the NZRU. Also Rugby is THE thing over there. There is no competition for administrators and sports executives. Boss of the NZRU is it. NZ RL will not have a glitzy HQ and jet set lifestyle for its key executives like their transtasman counterparts. There is no AFL, and soccer is very much a minority sport, even though they out perform us at World cup time. There are no Jones's for NZRU types to keep up with.

Over here, NSW has had the Veto since the start of ARU. Up until recently QRU was the only really effective foil to NSW RU. ACTRU has gained some prominance recently but effectively the ARU was characterised by the two big stakeholders looking after themselves and a stuff the rest of you approach. It is hardly any surprise that we have ended up with this nest of taipan snakes. The more open democracy, accountability and frugalness of our transtasman friends is something to aspire to. There is very little darkness in the way they run the game over there.

With only two effective stakeholders to placate, it is little wonder that there are elements of darkness and skulduggery going on at Rugby Central.

In terms of Jones's to keep up with in order to maintain "our credibility", ARU have a belief that the have to compete with cashed up NRL and AFL, and the sleeping giant of Frank Lowy's Soccer Australia. We don't have the effective monopoly that the NZRU enjoys. Competing with the other codes is a significant contributing factor to extra overhead cost over here.

Don't forget that lots of stuff is dirt cheap in NZ, and they are generally a less demanding bunch of people. The delegates to the NZRU conference drink steinlager beer, eat club sandwiches and meat pies and stay in maraes and cheap motels. Based on the ARU accounts it would appear that anything less than Penfolds RWT, lobster mornay, and Sydney Hilton is seen as unacceptable roughing it.

 

[Scott Allen]

Bill Pulver has today announced a new administrative structure within the ARU.

Mr Pulver initiated a financial and organisation review of the ARU soon after stepping into the role on 1 February, in an effort to develop a sustainable financial model that supports investment in Rugby participation, elite talent development and revenue growth.

Having received the findings of the report, and post discussions with the ARU Board, Mr Pulver said he was now in a position to outline more broadly his direction for the future, which includes the following key strategic initiatives;

• Expanded participation in the game with a focus on Rugby Sevens and Women’s Rugby;

• Accelerated development of elite talent to support greater success in Super Rugby, the Qantas Wallabies and our national Sevens teams;

• Re-energised Premier Rugby competitions where ARU will work with the Queensland Rugby Union and the Sydney Rugby Union to drive initiatives in both States; and

• Fan Engagement Strategy to promote growth in the game.

The ARU’s revised organisation structure focuses investment on these key initiatives while also driving productivity improvement to support a sustainable financial model for the game.

The restructure includes the creation of new departments and promotion of existing talent within ARU and the introduction of external talent to the Leadership team.

The direct reports to Mr Pulver are:

ROBBIE DEANS – Qantas Wallabies Coach

ANTHONY EDDY – General Manager Sevens

BEN WHITAKER – General Manager Development Pathways

NICK WEEKS – General Manager Strategy, Corporate Affairs and Legal

IAN ALKER – General Manager Rugby Operations

JOHN NICHOLL – General Manager Commercial & Marketing

PETER JENKINS – General Manager Media & Communications

TODD DAY – Chief Financial Officer

TBA – General Manager Rugby Participation

 

[Scott Allen]

Here's a little more detail:

Ben Whitaker has been promoted to General Manager Development Pathways, which contains roles and responsibilities similar to the previous High Performance Unit.

Anthony Eddy has also been promoted from the former HPU department to General Manager Sevens.

This position has an emphasis on national team programs leading into the 2016 Olympic Games in Rio, overall development of the Sevens business, and further building the annual Gold Coast Sevens tournament as part of the IRB Sevens World Series.

The restructure has also resulted in the formation of a Commercial and Marketing portfolio to be led by John Nicholl, who joins ARU in mid-May as General Manager.

Mr Nicholl will take up the role after eight years as Business Director with the STW Group where he managed the organisation’s stake in 22 companies.

With 23 years’ experience in Sales and Marketing, he is also a former Regional Marketing Manager and Sports Marketing and Sponsorship Manager for Coca-Cola.

A further key management position remains vacant – General Manager Rugby Participation – a re-branded version of the Community Rugby department that will work closely with the various state Rugby Union Community Rugby departments.

Former Community Rugby General Manager Ian Alker has been promoted to head up the new Rugby Operations department as General Manager.

“We have worked swiftly, but meticulously, to create a more agile structure that aligns the organisation with the strategic goal to become an innovative & profitable leader in a prosperous global Rugby community,” said Mr Pulver.

 

[Hugh Jarse]

That vacant job of GM Participation will be critical for the future of the game.

Hope they choose wisely.

Hope the successful candidate can count properly.

Good to see Nuci didn't get the gig as GM Sevens. There is hope.

Whitaker is not a bad sort of fellow to run Pathways, but he will need to work very closely with GM Participation.

I would have been tempted to reduce the amount of direct reports and put a few under GM Rugby Operations (perhaps GM's of Rugby 7's, Rugby Participation, and Development Pathways - maybe even Coach Wobs) and really make him sing for his supper. He'd be a powerful person, and in an ideal grooming position to take over as the next CEO. Maybe that is why the Pulverisor didn't go down that path.

 

[Rob42]

So the ARU will work with the Sydney RU to "re-energise" and "drive initiatives" with the Shute Shield. The ARU also has responsibility for community rugby in NSW. Remind me again what the NSWRU actually does, other than no doubt consume some of that overhead expenditure?

 

[Inside Shoulder]

Here's a little more detail:

does Mr NIcholl realise he's going from Coke to Pepsi - or maybe even Rebel Cola?

 

[Jets]

It would be interesting to hear what this restructure will cost. It's looking like too many cooks in the kitchen to me.

 

[Sidbarret]

In related news, the Waratahs has made a (admittedly small) profit for the last two years. There are also reports that the Reds have made a profit of $1.6m last year.

It would be interesting to consolidate the reports of the ARU, the franchises and the amateur bodies as I think it will give one better idea of the financial health of the sport.

Waratahs record second successive profit​

​

​

The NSW Waratahs have recorded a profit for the second year running, the Super Rugby franchise announced on Tuesday.
Waratahs Rugby Limited reported a positive net operating profit of $64,745 for the year ending December 31, 2012.
Waratahs Rugby said the profit came after $1,131,784 was contributed to the game of rugby union through licence fees and other grants to the NSW Rugby Union.
The result comes on the back of a $49,990 profit for the 2011.
Waratahs Rugby says the 2012 profit is the state’s best result in six years.
The figure was announced by chairman Roger Davis at Waratahs Rugby’s Annual General Meeting.
“After a disappointing Super Rugby campaign, this result was a particularly pleasing outcome for management, sponsors, fans and players and reflects the commitment of the board to ensuring we have a profitable, vibrant and successful professional rugby team that is well positioned to capitalise on all future opportunities to grow the game in the state of NSW,” Davis said.

 

[Hell West & Crooked]

Interested to have just come across an article which states that the NZRUs reserves have fallen from 80 million down to 33 million of late... No doubt this would include the outcome from their World Cup - but I never did see a categoric statement on whether the last RWC lost or made money - a Loss was certainly predicted.

I conced they have the number One Team in the World, but we have the Number 2 Team - and yet the NZRU has 10 TIMES our reserve at this (recent) lowest point????

If I were Micheal Hawker, I would be taking this as a major 'litmus paper' for how the ARU is performing as a National Body - (the other being most certainly 'real' participation numbers).

As I have agreat deal of confidence in Mr. Hawkers' abilities as a Chairman, I suggest he wil have a close eye on the performance of his new CEO in terms of the bottom line.

From my position, this speaks to me VERY Clearly, that we will see Japanese and US Teams in Super Rugby in 2015/16 - as all the IRB's main sponsors have considerable business interests in these two countries.

 

[Sir Arthur Higgins]

totally agree re a japanese team. i think a new SA team will go in and NZ and AUS will request that a japanese team goes in.
NZ playing a game there. tanaka and horie coming down - it all spells a focus on japan.

time zone works almost ideally as well for both countries.

 

[Mank]

2- The losses on the exchange hedges just shouldn't happen. The strength of the Ozzie dollar makes things harder for the ARU, but the strength hasn't been a surprise to anyone and losing money on hedging in such a predictable market just shouldn't happen.

Mostly a good post but I'll just disagree with the above. If the Aussie dollar's climb wasn't a surprise to anyone, everyone would be rich on currency spread betting. In hindsight, most things aren't surprising.

 

[Mank]

Finally, did he really do a job that was worthy of $2.2m p.a? I missed it if he did.

Isn't he the guy that somehow managed to get everything the ARU wanted for the expanded the Super comp, and nothing that South Africa wanted?

Bearing in mind (we don't need to go over it again), South Africa provides the biggest market for television rights (by far iirc), O'Neill still managed to:

- Increase Australia's percentage of the take (while decreasing South Africa's)

- Expand the Super comp into the June internationals, screwing the rest of the year for South African rugby (Currie Cup is now watered down)

- Then after all that, still get the extra team, despite everyone thinking that the only reason South Africa agreed to the expansion and lower relative takings was so they could add an extra team (Kings)

I mean, years later I'm still bitter and completely baffled how he pulled that off. I'm also still baffled how the South African 'negotiator' (Marinos if you're reading this, you suck) got taken for such a ride. I would love for someone to examine his finances for some extra income.

 

[Mank]

Didn't realise I was replying to fairly old posts, apologies.

 

[Inside Shoulder]

Didn't realise I was replying to fairly old posts, apologies.

No need - bumps it back up just to get everyone fired up again

 

[Quick Hands]

Interested to have just come across an article which states that the NZRUs reserves have fallen from 80 million down to 33 million of late. No doubt this would include the outcome from their World Cup - but I never did see a categoric statement on whether the last RWC lost ot made money - a Loss was certainly predicted.

I conced they have the number One Team in the World, but we have the Number 2 Team - and yet the NZRU has 10 TIMES our reserve at this (recent) lowest point????

If I were Micheal Hawker, I would be taking this as a major 'litmus paper' for how the ARU is performing as a National Body - (the other being most certainly 'real' participation numbers).

.

Don't forget the relative size of the NZ economy and the fact that there around the same number of rugby players in Aust as in NZ. It seems to show that the alleged corporate gurus who run rugby in Australia are grossly overpaid and underperforming. I read in one of the posts that NZRU types eat pies, sausage rolls and sandwichs washed down by Steinlarger. That might be a good place to start for ARU, NSWRU & others with snouts in troughs.

Michael Hawker will have my respect when and only when he produces the real participation numbers and produces a plan to do something about it (as opposed to appearing to do something about it and actually doing nothing).