Rebel man
Jim Lenehan (48)
Gee complaining about directors how’s the irony
Melbourne Rebels 2024
- Thread starter RugbyReg
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Rebel man
Jim Lenehan (48)
Probably for players with an RA top there is, my guess though someone like Cater Gordon who wouldn’t have had a wallabies contract. That their argument is for the period of time he is released from his contract to play for the wallabies they are liable to pay his wage
Pone's Mullet
Alex Ross (28)
RA said they’d repay the Covid shortfall and pay Wallabies salaries
Wilson
David Codey (61)
When did they say this? My understanding was the teams all agreed to the reduced grant over the COVID years and it's only the most recent year the they promised to restore the full grant amount and reneged.
Rebel man
Jim Lenehan (48)
But if the Rebels win would RA be able to afford to cancel their license? With the financial penalties they would incur.
The super license are guaranteed until 2030
swingpass
Peter Sullivan (51)
Adam, thats not necessarily the case. all and any loans to the Rebels will be counted as liablities and any funder of that loan a creditor, sure they probably do eventually want their money back, but that doesnt mean straight away as in knocking on the door with a demand notice. From the outside looking in, the ATO and MPOT and a few others certainly want pay now, thboard members who knows.
Wilson
David Codey (61)
I had thought it was only to 2025 and the tv deal, but that might just be the funding agreements.
That said I don't know there would be much in the way of financial penalties, the current tv deal is done at the end of 2025, that's the only year that could be effected. In the end it would be a question of what costs them more - continuing to fund the Rebels beyond 2025 or a renegotiation of the final year of a tv deal before they can restructure the comp and try and push for more per team. Given the rebels still wouldn't be particularly solvent at that point (still at least $12 million in debt) I can't see how they could maintain them. Particularly not if the other 4 teams (or 3, given the tahs are now in house) were demanding the equivalent grant shortfall and Wallaby tax payments.
At the end of the day RA have a fair bit of power to cancel a licence when a team is financial strife. As things stand I'm not even sure the licence would revert back to the rebels given RA now control it.
Rebel man
Jim Lenehan (48)
They have a participation agreement with NZ lasts until 2030
The Red Baron
Chilla Wilson (44)
I would if it was the Tahs.
Wilson
David Codey (61)
That doesn't guarantee specific teams as far as I'm aware and would probably be the simplest renegotiation in all this - based on everything out of New Zealand out of the past 5 years they'd be happy to see an Australian side go.
I do want to be clear I'm not advocating the rebels be cut, I'm just trying to understand the motivation and consequences behind the boards decision to go after RA here. As far as I can tell their success would only serve to make them whole (or nearer to it) and not do much of anything to actually save the club.
dillyboy
Nev Cottrell (35)
Same here in Qld too
dru
Tim Horan (67)
NZRU would be equally happy to reduce the RA/Australian split of the funding.
Strewthcobber
Mark Ella (57)
The revenue sharing agreements are all up for renogatiation after the 20225 broadcast deal.
Rebel man
Jim Lenehan (48)
It was stated when this all broke that there are financial penalties if we drop to 4 teams as we have considered to 5 teams until 2030
LeCheese
Peter Johnson (47)
Wasn't that in relation to the '24 '25 broadcast deal and the reduced number of matches that would result?
dru
Tim Horan (67)
Ey?
5/12 = 41.6%
4/11 = 36.4%
In the mean time RA has had to fight for rational funding against NZRU it's ridiculous to think that improves losing the Rebels/
That's kind of my point. Hardly negotiating from strength.
Wilson
David Codey (61)
The TV contracting should be pooled and then distributed evenly based on the number of teams. That's not currently what happens though, each nation has their own broadcast agreement and while RA did manage to negotiate some extra funding from NZ but it's not up to an even distribution.
In the event of of renegotiation and re-organization of the competition RA would be able to push for that more even distribution per teams while asking for less (in total) than they would with 5 times. This would help RA get more money per team they were supporting (at least as a percentage of the total broadcast pool) then what they currently get, putting them in a better position to support those teams. In terms of total payment this would be less (with New Zealand also conceding less) but costs would also be down with one less team to pay grants to, meaning that money could go further. The major potential problem here would be in the existing broadcast agreement - dropping an Australian team would probably see a drop in the payout from Nine/Stan in the remaining year of the current broadcast agreement, how much might depend on the structure of the competition and how much content was provided. Going forward to new broadcast agreements I'm not sure they'd be too significantly impacted, while there is a lot of potential in the Melbourne market all the evidence is that it's not particularly well realized at a super level and the majority of the appetite there appears to be for the very top end content like the Bledisloe. I doubt the New Zealand broadcast deal would be negatively affected at all, the restructure of the competition would probably result in more kiwi derbies, offering better value for an NZ broadcaster. It's worth also noting that NZ are reliant on Australia toa degree and it wouldn't be in their interest playing hardball in these negotiations, not when cutting a team is ostensibly what they've always wanted.
I want to be really clear here though, I'm not advocating the Rebels be cut, what I'm describing is an even worse situation for RA than we have now. What I'm trying to work through here is the potential consequences of the Rebels boards claim against RA - Assume it's successful, RA are out $8 million with conservatively some $20+ million in claims to follow from the Reds, Brumbies and Force for the same money and the Rebels are still $12 million in debt. If that were to happen RA is going to have start making drastic changes for survival, the most obvious of those would be to cut costs by jettisoning the Rebels. Yes it would probably result in an overall drop in revenue, but it would likely cut costs more and give RA some breathing room.
That's why I think this play from the directors is about their own debt and not the survival of the club - whether they get the money out of RA or not they'll still need a massive injection in capitol for the club to survive, likely in the form of a rich owner, ala Twiggy. They can reduce the immediate cost to that potential buyer by getting the $8 million from RA, but leave RA in a position where they can no longer afford to fund the Rebels, and any potential owner would be on the hook for as much as an extra $6 million a year (the current grant from RA), wiping out that saving within 2 years. I would've thought the club was a more attractive prospect for a buyer while there is still capacity for support from RA, even with the full 20 million in debt. In that situation there is probably more room to work with RA and have them take on what portion of the debt they're able to in the knowledge that there are deep pockets coming into the game longer term.
Dan54
Tim Horan (67)
Some great points Wilson. I can see where it would be sensible for super rugby to sell it's tv rights seperatly from their Union's deals ie no RA and NZR, and all teams get a plit etc. It could also end up with super on different channels than rest of rugby (as it does in NH) , but that perhaps is a price we would pay. Say in NZ, we may get a lot of rugby on sky and then super on a streaming platform or something, and in Aus perhaps tests, club stuff on 9/stan, and super on something else like Fox or something. I guess super would just sell to whoever is highest bidder and not who is best for game in their country?
dru
Tim Horan (67)
Excellent consideration and detail, Wilson. Honestly though, the concept that reducing content does anything but reduce income is at best optimistic. If the extra content is by extending the season, just bloody do it - with the full quota from the start.
It isn't just local broadcast that would reconsider the value, it is also NZ broadcast and overseas. Local obviously being the biggest issue. But it's more than that - after the Wallabies debacle any renegotiation is badly timed. The marketplace is vastly different following RWC, then add Rebels. And Waratahs, and Brumbies. That marketplace drag will be impacting NZ as well.
On a different note; for the life of me, the legal claim to hold RA responsible for Rebels (income) tax is surely nothing but posture and negotiation. Similar regarding stretching the timing. It just doesn't seem to have any purpose other than weakening the RA outside of the legal specifics in order to press for a better deal in negotiation. An intent to create bad optics in the hope that RA roll over to have it over quickly. With that "shock" thought in place, I'd suggest that this will be made as messy as it can before it starts clearly up.