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Bret Harris | August 05, 2009
Article from: The Australian
THE embattled Queensland Reds are prime candidates to become Australia's first privately owned Super rugby franchise.
Queensland's lack of success has reached plague proportions with the once-proud team finishing in the bottom three on the table for the past six years.
With the departure of Wallabies inside back Berrick Barnes to NSW, the Reds seem condemned to another poor season next year.
Off the field, the Reds posted a $203,000 operational loss last year, which is not unusual for Super rugby teams, but it would be a concern if it was happening year after year.
The Reds are also in a state of flux administratively with the recent resignations of chairman Peter Lewis and chief executive Ken Freer.
All of this makes the Reds an ideal target for a private consortium.
ARU chief executive John O'Neill has made no secret of the fact he wants to see a new ownership model at the 2011 Super 15 rugby expansion franchise. O'Neill is looking for private equity, rather than the traditional state union, to play the major role in the running of the new team.
At present, there are six Australian bidders for the licence to operate the 15th Super team, following NSW Country's decision yesterday to withdraw from the race.
While only one bid will be successful, the process has flushed out potential private equity in Melbourne, western Sydney and the Gold Coast.
If the licence is awarded to one of the three Melbourne bidders (or a combination of them) as expected, this will leave the other consortiums all dressed up with nowhere to go.
In this circumstance, the Gold Coast consortium, which is led by O'Neill's close friend and former ARU director Terry Jackman, may turn its eyes to the Reds.
If the Gold Coast consortium could secure the Reds' Super rugby licence, it could run the professional team on behalf of the QRU, which could then concentrate on administering club, country and junior rugby.
A privately owned Reds team could also play one or two home games on the Gold Coast, which would fulfil one of the consortium's main objectives.
It is not as far-fetched an idea as it might sound.
The Gold Coast consortium could approach the QRU and its constituent clubs in Brisbane and Queensland Country with a business proposition to buy the Reds' Super licence for a fee and pay an annual royalty.
The QRU could reject an approach, but changes in the Ballymore boardroom may also result in a new leadership that is sympathetic to the ARU plan to introduce the private ownership model to the Super rugby teams.
There has been speculation former QRU and ARU chairman Dick McGruther and ARU director, former Wallabies second-rower Rod McCall, are the favourites to replace Lewis.
McGruther and McCall, who is the most likely to get the QRU chair, have close ARU links and may be supportive of any plan to privatise the Reds.
If not, the ARU may be in a position to persuade the QRU to accept private ownership of the Reds' licence.
At a recent chairman and chief executives meeting, O'Neill assured the states that they would not be required to relinquish their Super rugby licences when the current broadcast deal with News Ltd (publisher of The Australian) expires next year -- as long as they continued to fulfil their obligations.
One way for the ARU to encourage a state to adopt private ownership of its Super rugby licence would be to withhold part, or all, of the $4.3million grant the national governing body gives to the states each year.
The state could keep the Super licence, but it would have to find a way to fund the team on its own.
It is unlikely the ARU would single out an individual state in this way. A new federalism deal is almost certain to be negotiated with all of the states at the one time.
Whatever happens, there will be changes in Queensland, but the prospect of private ownership offers a new way forward for the Reds -- an opportunity to get ahead of the game instead of always chasing it.
http://www.theaustralian.news.com.au...015651,00.html