Where to for Super Rugby?

[Quick Hands]

The $17m 'cash' is significantly due to a one-off Govt grant for a glossy new HQ in Sydney. It will depart the ARU's bank account with a scary regularity and trend.

What people often forget is this: the appallingly low crowd figures that the State RUs are getting for their home Super matches will quite rapidly filter through to a major decline in both sponsorships income and net gate income (net gate income is material to the State RU's finances and solvency, net gate falls off exponentially once gross gate income falls close to fully loaded stadium rent and game operating costs) in 2018 and 2019 (why will 2019 be an better, it will likely be worse on current trends).

Accordingly, it's a good bet that multiple State RU bail outs will be needed by some time in 2019, or maybe early 2020. These will be of a very material size in relation to the ARU's increasingly fragile core operating - not 'one offs - cash flows. The fact that the game is so on the nose with sponsors and others external - plus the visual impact of the dreaded empty stands - will impact ongoing ARU and State RU income for sure both this year and subsequently.

Multi million $ bailouts for say the Rebels, Reds and Brumbies in late 2019 could easily total $6-$10m cash just for starters. (How much have the Rebels burnt through of ARU/RA $s - $25m+? Stop laughing.)

When we turn to 2020..the ARU's income, and its ability to pass income to the State RUs as operating subsidies, in recent years has been hugely bolstered by another not-to-be-repeated one off, namely the exceptional bidding war in the UK that was for overall Super Rugby TV rights. Every media observer in the UK says that will never happen again.

Given what we all see of the rapidly dilapidating Super Rugby comp today, surely no one expects the post 2020 Super Rugby gross media income per country to be anything like what it has been in the last 4 years, it's almost certain to experience a very material reduction from 2020. This will seriously damage Australian rugby's core financial viability.

Wallaby Test attendances and related income - another key RA income source - are in free fall (still plenty of seats free for the Ireland Tests) and that is always worsened in a RWC year as next year is when there's likely no June series and a shortened RC and BC.

Then we must factor in the likelihood - happening more rapidly already - of more and more elite players here moving to Europe for higher immediate incomes and better income prospects over their whole career cycles (plus the smarter ones smell the crash coming to Australian rugby here). The gate and weakened media impact of the less good players remaining will clearly negatively impact the gross income prospects of the code as a whole.

So just look at the emerging aggregate financial dynamics of Aust pro rugby as a whole and a picture of seriously deteriorating core net cash flows arises of a type that even 'one offs' won't fix and of a type that no sensible bank would fund.

Where will the saviour arise from and why? Well, the best and most likely saviour will be World Rugby working to radically restructure the code here in close concert with managerial and coaching resources provided by the NZRU that also has a massive vested interest in rugby not irrevocably collapsing in Australia. All this will be to the good as the serious and extraordinary costly incompetence by which the game is governed here can be finally washed away in one radical sweep of deep cleansing.

Very well put.

I note that in the last RWC year (2015), the ARU lost money.

The parent entity lost $9,849,000
The consolidated entity lost $6,329,000

I'm sure that someone can explain the difference. (page 8 of the financial report attached)
https://issuu.com/australianrugbyunion/docs/aru_web?e=24291087/34741796

There's no reason to expect that a similar loss won't occur in 2019.

They also lose money when there is a BIL tour of NZ or SA as with last year where they lost $3.8 million (after $21 million specific purpose grant excluded)

As I observed a few pages back, they seem not to budget on a 4 year cycle taking into account lean years of RWC and BIL. What they do is in those year feign surprise at making a loss and use the forgoing as an excuse which was totally unexpected.

 

[Strewthcobber]

Very well put.

I note that in the last RWC year (2015), the ARU lost money.

The parent entity lost $9,849,000
The consolidated entity lost $6,329,000

I'm sure that someone can explain the difference. (page 8 of the financial report attached)
https://issuu.com/australianrugbyunion/docs/aru_web?e=24291087/34741796

Consolidated report includes other companies in which RA have an interest, whereas the parent one is just RA

In 2015. The consolidated one included the Australian Rugby Foundation and the rebels.

2017 is just RA and the foundation.

The details will always be in the directors report at the start of the financial statements

Sent from my Pixel 2 using Tapatalk

 

[Strewthcobber]

To put some perspective on this, when Bill took over at the start on 2013, there was $3m in the bank.

The lions tour kicked that up to $17m. At the end of last year when Billy P left, there was still that $17m in the bank.

So over the World cup, lions tour cycle, and England tour, with the big jump in broadcasting rights and all of the expenses around the Rebels and the Force and cutting from the community game, they stayed about even over the 4 years.

I think the board and the executive are at least aware of the financial issues, which is a big improvement on the latter years of JON.

Of course there are still massive risks out there....and the rebels are probably still top of the list.

But we have a world cup in our timezone. That could be a game changer, and might be the last chance saloon?


Sent from my Pixel 2 using Tapatalk

 

[Gnostic]

To put some perspective on this, when Bill took over at the start on 2013, there was $3m in the bank.



The lions tour kicked that up to $17m. At the end of last year when Billy P left, there was still that $17m in the bank.



So over the World cup, lions tour cycle, and England tour, with the big jump in broadcasting rights and all of the expenses around the Rebels and the Force and cutting from the community game, they stayed about even over the 4 years.



I think the board and the executive are at least aware of the financial issues, which is a big improvement on the latter years of JON.



Of course there are still massive risks out there..and the rebels are probably still top of the list.



But we have a world cup in our timezone. That could be a game changer, and might be the last chance saloon?





Sent from my Pixel 2 using Tapatalk

You are ignoring the one off grant from the Government that Redshappy disclosed to you that bumps that figure up. That is an abnormal on the income side and should not be counted. Take it out and things are no rosey at all.

 

[Strewthcobber]

You are ignoring the one off grant from the Government that Redshappy disclosed to you that bumps that figure up. That is an abnormal on the income side and should not be counted. Take it out and things are no rosey at all.

You are both ignoring the payments for plant property and equipment, and payments for ARDC construction which are included in the statement of cashflows over the last few years.

Government grants have to be spent for a purpose.

Edit - $26m for those items over the last couple of years. So it looks as thought they spent a bit more than the grant on the build.

Net impact is included in the $17m

 

[James Pettifer]

Well, if several differing quotes from both the Pro 14 and SARU are to be believed both parties are pretty keen to continue the transition.

I’m surprised. Crowds have been abysmal even compared to SuperRugby crowds.

 

[Brumby Runner]

Where will the saviour arise from and why? Well, the best and most likely saviour will be World Rugby working to radically restructure the code here in close concert with managerial and coaching resources provided by the NZRU that also has a massive vested interest in rugby not irrevocably collapsing in Australia. All this will be to the good as the serious and extraordinary costly incompetence by which the game is governed here can be finally washed away in one radical sweep of deep cleansing.

This paragraph should ideally be the job description of the new RA CEO.

 

[wamberal]

This paragraph should ideally be the job description of the new RA CEO.

The only possible option is the appointment of an Executive Chairman. But who, exactly?

 

[Quick Hands]

To put some perspective on this, when Bill took over at the start on 2013, there was $3m in the bank.

The lions tour kicked that up to $17m. At the end of last year when Billy P left, there was still that $17m in the bank.

So over the World cup, lions tour cycle, and England tour, with the big jump in broadcasting rights and all of the expenses around the Rebels and the Force and cutting from the community game, they stayed about even over the 4 years.

I think the board and the executive are at least aware of the financial issues, which is a big improvement on the latter years of JON.

Of course there are still massive risks out there..and the rebels are probably still top of the list.

But we have a world cup in our timezone. That could be a game changer, and might be the last chance saloon?


Sent from my Pixel 2 using Tapatalk

The BIL tour in 2013 is all that has kept the game afloat.

From the 2013 annual report:
Game day revenue increased from $34.6 million in 2012 to 68.2 million in 2013. i.e. a $33 million dollar windfall (and they only managed to bank 17 of 33 - assume that the rest went on increased costs and retirement of debt)

In 2012 the ARU reported an operating deficit of $3.7 million, while in 2013 they reported an operating profit of $26.6 million.

http://www.rugbyaustralia.com.au/annualreport/2013/#/54

Next BIL tour to Aust will be in 2025. Before that we'll have likely loss making RWC years in 2019 and 2023 and a loss making BIL tour to SA year in 2021. And there's no real reason to expect significant profits in the other years, in fact the evidence suggests that most, if not all, will also be loss making - just not as much.

Not sure how long that $17 million can last at the current rate of losing $3-4 million a year.

 

[Quick Hands]

Reds 12 - Chiefs 36, before what looked like around 10,000 or less at Suncorp.

At least the 2nd half was 12 all.

 

[half]

Observations made over the past month or so.

Our crowds have not improved and me thinks we have resorted to maybe telling fibs about crowds.

The Tahs match on Friday night the link to the highlights clearly shows both the North & South ends almost empty, and the upper decks on the side lines not quite as bad, but also very sparse.
https://www.foxsports.com.au/video/...-highlights/war-v-lio-match-highlights!675829

It’s a 42K stadium and let’s assume the north and south end and the side line upper decks are half the crowd. Let’s assume there were 2K in these areas. That would mean with a 10 K crowd 8K in the remaining part of the stadium or a person for every 2.5 seats, both ends of the lower deck were again very sparse. My guess 8K at most.

Walking around Macquarie Shopping Centre & North Ryde Shopping Centre today. Did not see one Tahs shirt whereas once they were the dominate team shirt worn.

My local club over the past three weeks has managed one only day of games.

Raelene Castle is not providing inspirational leadership. If anything media reports suggest she is struggling in the position.

The Big Bash IMO has changed sport broadcasting in Australia in that it has made sport a broadcast entertainment products, like no other competition has ever done. Rugby does not fit this narrative.

Our media overall is down on what it used to be.

Churning is a term used by AFL sports management professionals for each year you lose a percentage of your fan base and you need to promote and be visual to at least maintain your level of support. i.e. to replace those lost. Super Rugby does not seem to have any plans to do this as year on year we are experiencing declines but do very little to get new folk involved.

Spent some time in NZ recently, they acknowledge what we say about where we sit in Australian sport, but have no idea what it means. Its kinda funny we can tell them and they can acknowledge it, but as they have never experienced it they don’t understand it. Thus their management decisions pertaining to Australia often make little sense.

The clock is ticking, and to me wishful thinking is our management plan.

 

[Gnostic]

Is there any doubt at all that Australian Pro Rugby is dead? What is it now 38 games v NZ sides with no wins. Now we can add home capitulations to teams such as the Lions and Jaguares, even though the Lions top the SA conference and have been finalists for the last two years the nature of that loss shows that our sides are sliding further behind, not improving at all given the Tahs are easily the top Oz side so far.

And really how can we expect there to be genuine improvement when the coaching structures have remained essentially the same with coaches moving on to other positions around the country with no successes for years, Foley, Graham, McGahan, Larkham, Grey. And the same players continuing to get massive payments despite failing to improve their skills and in game skill execution, not judged on individual game basis but over seasons and years, such as Folau and Beale.

If this is Professionalism, I'll take amateur thanks, the fitness is certainly less but the skills on display are at least as good.

 

[Quick Hands]

Is there any doubt at all that Australian Pro Rugby is dead? What is it now 38 games v NZ sides with no wins. Now we can add home capitulations to teams such as the Lions and Jaguares, even though the Lions top the SA conference and have been finalists for the last two years the nature of that loss shows that our sides are sliding further behind, not improving at all given the Tahs are easily the top Oz side so far.

And really how can we expect there to be genuine improvement when the coaching structures have remained essentially the same with coaches moving on to other positions around the country with no successes for years, Foley, Graham, McGahan, Larkham, Grey. And the same players continuing to get massive payments despite failing to improve their skills and in game skill execution, not judged on individual game basis but over seasons and years, such as Folau and Beale.

If this is Professionalism, I'll take amateur thanks, the fitness is certainly less but the skills on display are at least as good.

And the coaching gets no better at the next level down Gen Blue being coached by Pat McCutcheon - no doubt a nice bloke who has played some pro-rugby, but he's had no coaching experience whatsoever.

 

[Quick Hands]

Less than two pages of posts on the Brumbies v Jaguares thread. Tomikin seemed to be the only Brumbies supporter there. Half of the first page taken up by a photo of the team sheet.

 

[jimmydubs]

Is there any doubt at all that Australian Pro Rugby is dead?

I considered posting an obituary for Australian rugby in the obituary thread but quite fittingly I couldn’t be arsed.

 

[Quick Hands]

I considered posting an obituary for Australian rugby in the obituary thread but quite fittingly I couldn’t be arsed.

Burn a goal post, put it in an urn and it could be the trophy for the new domestic league.

 

[The torpedo]

An Affectionate Remembrance​

of​

AUSTRALIAN RUGBY​

Which died at St Leonards​

on​

22nd April, 2018,​

Deeply lamented by a small circle of sorrowing friends and acquaintances.​

R.I.P.​

N.B. - The body will be cremated and the ashes taken to New Zealand.​

 

[Inside Shoulder]

And the coaching gets no better at the next level down Gen Blue being coached by Pat McCutcheon - no doubt a nice bloke who has played some pro-rugby, but he's had no coaching experience whatsoever.

yeah but he knows a few people went to a Sydney gps school and played for Syd U .........so he’s entitled to a job and he can pass that job on to his eldest in due course.

 

[Rugbynutter39]

Post 2020 I think we need to cut oz Super Rugby sides back to 3 but also do a SA ploy of the cut team joining the Force in Twiggy Ball. Sunwolves can also join Twiggyball.

 

[Boof1050]

Post 2020 I think we need to cut oz Super Rugby sides back to 3 but also do a SA ploy of the cut team joining the Force in Twiggy Ball. Sunwolves can also join Twiggyball.

Nup nutter you can keep that shit over there where it belongs!