NSW on the verge of another bailout

[GaffaCHinO]

THE Waratahs' financial position is so unstable and precarious that rain on a couple of home-match nights this season might be all it takes to drive the Super Rugby franchise to the wall.

Waratahs chief executive Jason Allen told The Australian yesterday that while he did not subscribe to the panicky talk surrounding the NSW franchise, its finances were unsustainable. "Do we have enough cash to get through this season? At this point, yes," Allen said. "Can we sustain it? No."

He admitted that the Waratahs literally had nothing set aside for a rainy day, which will make for jittery officials on each of the side's eight home matches. "Sponsorships and match-day attendances are the big variables," he said. "We don't have any provisions (for rain-affected gates)."

Allen said the franchise's financial position was "50 per cent worse off" than at the corresponding period last year, primarily as a consequence of the loss of HSBC as full naming-rights sponsor.

The Waratahs subsequently have taken on Volvo as a front-of-jersey sponsor and have just signed an agreement with an as-yet-unannounced back-of-jersey sponsor while Allen has high hopes of also securing a sleeve sponsor in the near future.

But the sum of all the parts is still considerably less than the HSBC whole.

"We've got our exposure to a level where it's bloody risky but it's not close-the-door time," Allen insisted. "But have we got a risky business model? Yes."

In a worst-case scenario, the Australian Rugby Union could act as lender of last resort, although its own financial situation is almost as precarious as the Waratahs' and it is understood ARU officials privately are deeply concerned at the prospect of being asked to help bail out the Waratahs - which they were forced to do more than a decade ago.

ARU boss Bill Pulver attempted yesterday to put a positive spin on the Waratahs' plight - which is mirrored to various dire degrees by the Melbourne Rebels, Western Force and the Brumbies - but still conceded these were dangerous times for the code.

"We certainly acknowledge there are financial challenges that impact our game at all levels, nationals and all Super Rugby clubs, and this is something we're working on at the moment," Pulver said last night.

"While this isn't something that is unique to the Waratahs, we believe they have a great plan in place for 2014."

The plan might even include the Waratahs travelling to the northern hemisphere for end-of-season matches against senior Heineken Cup teams, if Allen is able to negotiate favourable terms for such a tour.

As the Super Rugby side operating in Australia's biggest city, the Waratahs always line up for each new season burdened by expectations, but the customary hype this year is tinged with a degree of desperation. It has been six years since Sydney last hosted a Super Rugby home playoff - and ironically Ewen McKenzie was sacked as head coach in advance of his side advancing to the 2008 grand final.

But the pressure on current coach Michael Cheika to deliver a top-two finish this season stems more from financial need than from any NSW pique that Queensland and the ACT both have won Super Rugby titles - the Brumbies twice - while the Tahs continue to go empty-handed.

"A home final (which potentially could deliver a $1 million windfall) is an absolute game-changer, a total game-changer," said Allen. "We've gone six years without any of that income."

The Waratahs improved only two ladder places in Cheika's first season as coach last year, jumping from 11th to ninth, but significantly, with new recruit Israel Folau leading the way, scored 45 tries in the season, up from only 31 in 2012. Significantly, only the eventual Super Rugby champions the Chiefs, with 50, crossed for more tries last season as Cheika at last delivered a NSW team that recognised its responsibility to entertain.

Still, the damage done over the lacklustre preceding seasons has taken a fearsome toll on the Waratahs' base. At present the Waratahs' membership is under 11,000, with Allen hoping that early successes this season might drive the final number up to around 19,000. The Queensland Reds, meanwhile, have already passed 25,000 in their membership drive in an ambitious quest to reach 50,000 members.

Significantly, NSW for the first time ever this year surrendered its status as Australia's leading state in terms of rugby participation, with Queensland taking the lead, according to the ARU's annual participation census

http://www.theaustralian.com.au/spor...-1226813357724

I attached the whole article as its behind the pay wall interesting time ahead for australian rugby.

 

[Sully]

Didn't they kick the ARU reps of the board the first chance they had?
Funny the they sacked McKenzie and went to sit just like we did when they canned Connelly.

Sent from my GT-I9300 using Tapatalk

 

[TOCC]

This is already in the Waratahs thread, and there is a bit of journalistic license in that title of this thread as well, another bailout would be worst case scenario.. Much like the Force and Brumbies.

 

[Ruggo]

Bail them out. It's good for rugby. It is clear they have made significant changes so help them out till it takes effect. It will take effect.

 

[Ash]

I recall the last time the Waratahs (NSWRU?) were bailed out by the ARU.

The ARU took over running of the Waratahs, eventually turning it around and running a profit with the ARU instilled and controlled board. When the agreed period of ARU control ended, the first act of the Waratahs board was to vote off all ARU instilled people, some of whom were trying to stay on with the corporation, and sticking some of the same old people in charge.

I haven't heard much in the last few years, but the last time I did speak to someone with inside knowledge of the NSWRU and Waratahs, they were adamant that the same old problems remain and many in club-land strive to avoid the mess that exists in Tah HQ.

I like how one poster compared the difference between the Tahs and Reds from the Code documentary series, the difference in professional between the two organisations was noticeable.

 

[TOCC]

Bail them out. It's good for rugby. It is clear they have made significant changes so help them out till it takes effect. It will take effect.

But what changes has the CEO made to improve the financial security of the organisation?

 

[Ruggo]

But what changes has the CEO made to improve the financial security of the organisation?

Don't know. I am not really interested in the business side of rugby. I just see the Tahs developing a better product on the field which I think will benefit other facets of the franchise. When I say bail them out, I certainly don't mean without conditions. Maybe some blood needs to be spilled in the upper management.

 

[Slim 293]

This is already in the Waratahs thread, and there is a bit of journalistic license in that title of this thread as well, another bailout would be worst case scenario.. Much like the Force and Brumbies.

Like the Force and the Brumbies how?

 

[Crashy]

I must the say the headline is a little misleading as are the comments from Wayne alluding to the Brumbies being in financial strife. If I recall correctly, the Brumbies are absolutely flush with cash and have now implemented a $2.5 foundation where only the income stream can be touched.
One thing I can’t understand is that the Tahs had a sold-out Saturday night game against the Lions. From memory, every corporate box was sold out, as was the stadium. If you take into account the merch that would have been sold plus all the other goodies, you would have thought that this game alone would have secured them financially for the season. I mean it would probably have meant $1million on a conservative basis. ( $15 average ticket price for every punter).
strange
Cameron

 

[Slim 293]

Yep, the Brumbies are financially secure after selling the Griffith land.........

 

[TOCC]

Like the Force and the Brumbies how?

Like I said it was worst case scenario, Brumbies were on the brink of insolvency after posting continuous operating losses, but it was the sale of Griffith which gave them a much needed cash injection and some equity to fall back on preventing that from happening.

Force are struggling with sponsorship, this new sponsorship idea of theirs could in the worst case scenario be a failure if half the jerseys fail to sell, I'm not sure how much money they have in the bank out west, but costs will need to be cut regardless.

 

[gel]

Yep, the Brumbies are financially secure after selling the Griffith land...

Do they have more to sell off later once that money runs out, or have they used it (and other money) to change things so that they are sustainable in the future?

I'm interested in the use of the term "bail out" wrt to the waratahs. Is this like a loan they have to pay back, or a grant which allows them to continue on without having to payback?

 

[TOCC]

You would hope that the new maintenance/rates/lease costs of the new ground are significantly lower thus reducing expenditure in this department, since it is in partnership with the University of Canberra, i would imagine this is the case.

As for the Tahs, any form of bail out would have to be negotiated, but if like the previous scenarios it will be the provision of a loan and then the ARU will appoint their own directors to the Tahs board until such point as the loan has been repaid.

I'd hope it doesnt come to this, one of these days(very soon) the ARU won't be in a position to provide a loan at all.

 

[wamberal]

As for the Tahs, any form of bail out would have to be negotiated, but if like the previous scenarios it will be the provision of a loan and then the ARU will appoint their own directors to the Tahs board until such point as the loan has been repaid.

I'd hope it doesnt come to this, one of these days(very soon) the ARU won't be in a position to provide a loan at all.

Yes, the day of reckoning is hurtling towards us. But all the stakeholders are standing around with their fingers in their ears, going "nah, nah, nah".


A good start would be a competitive Shute Shield.....any ideas as to how that could happen?

 

[p.Tah]

I don't think the ARU have their fingers in their ears, Pulver is trying everything to bring the game to a profitable level. JON on the other hand wasn't listening.

 

[TOCC]

One thing I can’t understand is that the Tahs had a sold-out Saturday night game against the Lions. From memory, every corporate box was sold out, as was the stadium. If you take into account the merch that would have been sold plus all the other goodies, you would have thought that this game alone would have secured them financially for the season. I mean it would probably have meant $1million on a conservative basis. ( $15 average ticket price for every punter).
strange
Cameron

That's right, I'd forgotten about the Lions match, surely that would have been worth quote a bit.

 

[Hugh Jarse]

Imagine the fiscal drama across rugbydom if the Lions hadn't toured last year.

 

[Inside Shoulder]

wouldnt the NSWRU have got the lions gate - assuming that the ARU didnt

 

[Ruggo]

I don't think the ARU have their fingers in their ears, Pulver is trying everything to bring the game to a profitable level. JON on the other hand wasn't listening.

I wasn't happy about his appointment because I just seen another old boy thrown into the job. Now he has some runs on the board I think he is doing a good job. I don't think it will happen overnight but he is focusing on the right areas and genuine in pushing rugby forward in a progressive manner.

Keep up the good work Bill.

 

[TOCC]

wouldnt the NSWRU have got the lions gate - assuming that the ARU didnt

Do you mean NSWRU instead of the Waratahs? It gets confusing since they are technically different organisations.. I would have thought tat the Waratahs would have received the income..

The ARU didn't take the gate takings for the super teams playing the lions..