Australian rugby/RA

[Strewthcobber]

So the business cycle went +30m to -$65m from 2003 to 2025, so around -$4.5m a year over the 22ish years.

The good news is we should build-up quite a nest egg out of 2027.

The business model is pretty much
* Every 12 years make heaps of money when Lions tour
* Every 4-6 years make decent money when England, or Ireland tour
* Lose a fairly small amount of money most years
* Lose lots of money in World Cup years

 

[Heavyd]

So the business cycle went +30m to -$65m from 2003 to 2025, so around -$4.5m a year over the 22ish years.

The good news is we should build-up quite a nest egg out of 2027.

The business model is pretty much
* Every 12 years make heaps of money when Lions tour
* Every 4-6 years make decent money when England, or Ireland tour
* Lose a fairly small amount of money most years
* Lose lots of money in World Cup years

$100m guaranteed into the coffers in 2027 RWC. I'm sure when RA were budgeting for Wallabies attendances this season against Argentina they probaly had a crowd of 25-28K penciled in for Sydney. Looks like 40k-42k is on the cards. Another $1.5m in unforecast funds hit the account.

 

[Tomikin]

So the business cycle went +30m to -$65m from 2003 to 2025, so around -$4.5m a year over the 22ish years.

The good news is we should build-up quite a nest egg out of 2027.

The business model is pretty much
* Every 12 years make heaps of money when Lions tour
* Every 4-6 years make decent money when England, or Ireland tour
* Lose a fairly small amount of money most years
* Lose lots of money in World Cup years

Do we take into account the new national cup? That should add to the coffers, although how much is undetermined.

One thing is for sure, we need to keep up the competitive play, that's what will keep fans engaged. The unpredictability of outcome seems to be the best thing for the sport at all levels. Still working on that at Super level, but at Test level, I think we are in that space now, long may it stay.

 

[Strewthcobber]

Do we take into account the new national cup? That should add to the coffers, although how much is undetermined.

One thing is for sure, we need to keep up the competitive play, that's what will keep fans engaged. The unpredictability of outcome seems to be the best thing for the sport at all levels. Still working on that at Super level, but at Test level, I think we are in that space now, long may it stay.

The very predictable pattern for almost every sporting code is when regular additional revenue comes in, then regular additional costs go out. There are plenty of places at all levels of Australian rugby that that Nations Cup money will be spent

 

[Red Runner]

So the business cycle went +30m to -$65m from 2003 to 2025, so around -$4.5m a year over the 22ish years.

The good news is we should build-up quite a nest egg out of 2027.

The business model is pretty much
* Every 12 years make heaps of money when Lions tour
* Every 4-6 years make decent money when England, or Ireland tour
* Lose a fairly small amount of money most years
* Lose lots of money in World Cup years

2007 years loose heaps of money on a Melbourne team in a national rugby competition
2011 onwards lose heaps of money on a Melbourne team in a national rugby competition.

 

[WorkingClassRugger]

The very predictable pattern for almost every sporting code is when regular additional revenue comes in, then regular additional costs go out. There are plenty of places at all levels of Australian rugby that that Nations Cup money will be spent

We won't be hosting any more games than we usually do in the July window. Not sure what additional costs will be incurred around essentially a rebrand of the current schedule. We already tour the NH for 3-4 games a year as well.

There was mention of revenue split around gate etc. So that will likely see less revenue in July but likely more in November. Not too sure about those details.

 

[Strewthcobber]

We won't be hosting any more games than we usually do in the July window. Not sure what additional costs will be incurred around essentially a rebrand of the current schedule. We already tour the NH for 3-4 games a year as well.

There was mention of revenue split around gate etc. So that will likely see less revenue in July but likely more in November. Not too sure about those details.

Oh, I just meant RA will spend whatever additional revenue comes in on something within the Australian rugby ecosystem (not necessarily at Wallaby level), so the model of losing a relatively small amount of money each year will hold.

Having said that, I think they will probably look at increased match payments at test level to make the ex-Giteau law decisions easier for OS players

 

[The Ghost of Raelene]

I wonder what RA does with any excess money to protect themselves from another mess in the future.

What sort of assets can Rugby get involved with that can be self sufficient and potentially generate a profit? I know the AFL and NRL work in different financial realms these days but the NRL has a 320m in assets in assets which includes Hotels like the Gambaro in Brisbane.

Game will always have an anchor on it when it's worried where the next cheque comes from.

 

[Adam84]

I wonder what RA does with any excess money to protect themselves from another mess in the future.

What sort of assets can Rugby get involved with that can be self sufficient and potentially generate a profit? I know the AFL and NRL work in different financial realms these days but the NRL has a 320m in assets in assets which includes Hotels like the Gambaro in Brisbane.

Game will always have an anchor on it when it's worried where the next cheque comes from.

Rugby Australia could set up a foundation that works a bit like a “future fund.” The main pot of money never gets touched, it just sits there growing. Only the returns—like dividends or a slice of the capital growth—get paid out each year. That way the game has a steady income stream without ever burning through the nest egg. They'll need to enshrine it in a way that it doesn't get touched and drawn down early next time a CEO/Chairman decides to spend like drunken sailors though.

For example, had RA invested the $45million profit they made in 2003 in a standard ASX portfolio and just taken out the dividends each year, that would be worth around $160 million today(conservatively), it would have paid out around $100million cumulatively in dividends since 2003 including a forecast $7million payout for 2025.

RA could do the same with the $100-$120million they're forecast to get from the RWC, which would amount to around $5million extra in passive income in 2028 and growing each year therafter..

 

[The Ghost of Raelene]

Love that.

Imagine being able to pull that sort of money and sign up the best 25 kids every year on basic deals or fund our own national comp without the fear of the rights being pulled and down goes everything.

 

[Crashy]

The problem with future fund is that realistically $100 million is not really going to turn the dial if they get to take 10% out for example. But its a start I guess.
I should invest some dosh in that rugby Future Fund- very equities centric though.

 

[The Ghost of Raelene]

The key is to start and have Rugby be in a better position in 20 years. 2003 was great but it was blown and Rugby has survived until now and gets a re-do opportunity.

Does Rugby learn?

 

[Adam84]

The key is to start and have Rugby be in a better position in 20 years. 2003 was great but it was blown and Rugby has survived until now and gets a re-do opportunity.

Does Rugby learn?

Exactly..Over a 12 year cycle the returns from a 'Future Fund' would be the equivalent of a Lions Tour, and the benefits compound the longer it's left. We can't rely on a Lions Tour every 12 years, or a RWC every 24 years tol bail out Rugby Australia.

If we consider that RA will go from paying $7-8million in interest on debt from 2024, to potentially earning $7million in revenue from a future fund by 2028. That's a $15million turnaround, which is pretty signficant given it's about 10% of RAs annual budget.

It's certainly not going to be revolutionary in the short term, but long term it'll give assurance.

 

[Braveheart81]

A question I have is how much flexibility do they have in terms of the time frames for returning the agreed percentage of player generated revenue to the players via the Collective Bargaining Agreement.

Clearly they don't have to spend 26% (or whatever that percentage is now) on the players in the windfall years of the Lions Tour or RWC but over what timeframe are they required to keep to that spending percentage?

 

[Crashy]

Just saw an article about Toulouse rugby. Annual forecast revenue this year of EUR55 million. Thats $100 million Aussie - insane