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AUSTRALIAN rugby's grand experiment in private ownership is about to come to an end with the ownership of the Melbourne Rebels set to be transferred to the Victorian Rugby Union.
It is understood that the Rebels' major shareholder, media buyer Harold Mitchell, will gift his shares to the VRU.
Whether the Rebels' other shareholders maintain any private equity in the franchise remains to be seen.
Either way, the ARU is expected to provide the Rebels with financial assistance as they move from a privately owned to a state-owned model.
When asked about the ownership of the Rebels, ARU chief executive Bill Pulver said: "I am in discussions with the Rebels' owners, but there is nothing I can confirm.
"The ARU is committed to assisting the Rebels in this phase and helping to build a wonderful franchise for the future.
"The ARU feels a great debt to Harold Mitchell and the Rebels' shareholders for their generous contribution to the game and establishing the Rebels as a major franchise."
The Rebels' situation not only raises questions about the future funding of the Melbourne franchise but the role of private ownership of Australian Super Rugby teams in general.
The licences of other Super Rugby franchises -- the Brumbies, NSW Waratahs, Queensland Reds and Western Force -- are owned by state unions.
The ARU opened the door to private investment in the Super Rugby teams when former chief executive John O'Neill returned to Australian rugby in 2007 after running the A-League. But none of the Super Rugby teams attracted private equity.
When the ARU awarded the licence for the fifth Australian franchise for the 2011 season as part of the expansion of Super Rugby, it imposed a private ownership model on the team.
The idea was that private ownership would allow the ARU to reduce its funding of the team and the model would provide a blueprint for the other franchises.
There were two bidders for the Melbourne licence -- the Mitchell-led consortium, which involved the VRU, and a group called VicRugby15, which included former Wallabies captain Mark Ella and mining infrastructure millionaire Kevin Maloney.
The ARU did not want the VRU involved in the ownership structure and preferred the VicRugby15 consortium, but it withdrew its bid after a dispute over funding.
http://www.theaustralian.com.au/spor...-1226604559830
This withdrawl of Harold Mitchell's money from the Rebels is somewhat similar to a force sponsor debarcle that we suffered in the early years. Although not mentioned in the article, I would now assume that with the licence becoming under the control of the VRU and ARU, that the salary checkbook will be based to the same restrictions of the salary cap that all other francishes follow (except the tahs).