This morning, RA informed the Consortium’s known representatives of the decision, pointing out that the application lacked adequate financial sustainability.
The application placed undue reliance on revenue growth and cost savings estimates that, in RA’s opinion, are too optimistic, casting serious doubt on the prospective licensee’s long-term viability. Furthermore, the parties have not yet reached an agreement on the Consortium’s planned partnership with Western Melbourne Group (WMG) for co-location in Tarneit, which is a key component of the suggested strategy.
The Consortium has stated clearly that, in addition to the usual cash that would be made available under a Participation Agreement, it is asking RA for a contribution of several million dollars to offset projected operational losses.
Since RA has not been informed of the members of the Consortium, it was not possible to evaluate the Consortium’s qualifications in their entirety.
Nonetheless, it is evident that a number of former directors of Melbourne Rebels Rugby Union Pty Ltd (MRRU) are among the Consortium’s principal advisors. This implies that one or more of these individuals oversaw MRRU’s governance during the time the Administrator believes the business may have operated while insolvent.
Despite substantial extra investment by RA above pledged club subsidies, MRRU has not been financially viable since the Rebels’ 2011 founding year. Nothing in the Consortium’s plan gives us enough confidence to believe that this will alter.
After multiple requests for information about the application, the Consortium finally provided limited material via a dataroom on May 22. On behalf of the Consortium, Leigh Clifford—the only member of the group that is known to exist—Georgia Widdup, the director of MRRU, and their advisor, Korda Mentha, gave a presentation last Tuesday night.
Additionally, the Consortium has said that it has committed $18 million in funding; however, no supporting documentation has been offered. In addition to a verbal guarantee given at Tuesday’s presentation, RA has been requested to depend on an assurance that a portion of the promised cash will go toward financing the Deed of Company Arrangement (DOCA).
There is no information available on the new ownership structure, the new delivery model at AAMI Park and Tarneit, or how the new model would address MRRU’s long-standing financial difficulties.
While RA does not take this decision lightly, it must act in the best interests of the sport and its stakeholders in order to provide all teams, including the Rebels, peace of mind as they prepare for the 2025 Super Rugby Pacific season.
In light of the dearth of information provided to RA, the absence of transparency, and the serious uncertainties surrounding the Consortium’s proposed financial model, RA has concluded that the level of risk involved in signing a Participation Agreement with this Consortium for the 2025 Super Rugby Pacific season is too great.
The Rugby Union Players Association (RUPA) and Rugby Association (RA) have been preparing for the potential of this result with regard to the Melbourne Rebels players. They met with players last week to go over alternatives for player mobility within Australian Rugby.
In the upcoming weeks, RA will keep discussing alternatives for player mobility with RUPA, players, and other Super Rugby teams. More information on this procedure will be shared by RA when it becomes available. For Rugby News The Daily Rugby
This decision relates only to the involvement of a Melbourne men’s professional rugby team, which has not shown to be financially sustainable and needs significant continuous supplementary funding. With a strong commitment to rugby in Victoria, RA will keep funding the sport and collaborating with Rugby Victoria, the State and Federal Governments, and other stakeholders to expand the sport.
Melbourne Rebels ditched by Super Rugby over financial woes
A decision on the Rebels Super Rugby Women’s squad will be made later this year as part of a larger process that RA is now doing to determine the proper footprint for the 2025 Super Rugby Women’s tournament.
In order to manage community rugby and develop the sport in the state, RA will continue to support Rugby Victoria, and it will explore for ways to boost financing. Under a centralized high-performance framework, Rugby Victoria and RA will collaborate closely on younger talent development programs, including Super Rugby U16s and U19s. RA will be responsible for both the strategic and financial aspects of these initiatives.
The Victorian Centre of Excellence at La Trobe University, which is slated to become one of the country’s premier development hubs and the starting point for rugby pathways in Victoria, is something that RA and the Victorian Government will continue to collaborate on.
In order to help Victoria’s top men get entry into Australian teams, RA is now assessing several methods. Rob Valetini, the 2023 John Eales Medallist, has already walked this road after being signed by the Brumbies as a Melbourne schoolboy. Read more about Australia issue Statement on Melbourne Rebels