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By Bret Harris
February 02, 2008
A POTENTIAL court battle between the Australian Rugby Union and the Victorian Rugby Union over an outstanding debt has been averted following a successful settlement between the two parties.
And Victoria remains confident that Melbourne will host the next Australian Super rugby team in any future expansion of the competition, despite speculation the team will be located in western Sydney.
The ARU is understood to have agreed to contribute $400,000 to $500,000 to the VRU to wipe out a debt incurred by the state union's running of Melbourne Rebels in the short-lived Australian Rugby Championship.
This follows a meeting in Melbourne between ARU chief executive John O'Neill and VRU chairman Gary Gray.
The VRU was left with a six-figure debt when the ARU decided to scrap the financially draining competition in December.
The Victorians, who went over budget in their running of the Rebels, sought financial assistance from the ARU, but this was not forthcoming.
This left the VRU in a precarious position as the union is almost totally funded by the ARU.
The option of court action was open to the VRU as part of the dispute resolution process outlined in the ARC participation agreement between the ARU and the states.
Victoria are understood to have threatened to take the matter to court because previous steps in the dispute process - consultation, mediation and arbitration - had failed.
But Gray was comfortable with the outcome of his talks with O'Neill, who was not directly involved in initial negotiations.
"There is no dispute between us," Gray said. "There was concern some months ago about matters relating to the ARC, but all of those matters have been dealt with.
"New South Wales, Queensland and ourselves all over-budgeted. In the wash-up there were discussions about who would pay. The other states were resolved. The ARU and the VRU have now come to a agreement and we've put it behind us.
"Options would have been open to us to protect the interests of the VRU, but that's not necessary.
"We are working with the ARU and we are pretty comfortable with where we got to. We had a productive meeting about positive things we can do to grow the game in Victoria."
O'Neill said the ARU had resolved the issue in the best interests of the game.
"The ARU has reached agreement on the VRU's financial situuation and absorbed their losses from the ARC and some operational losses," O'Neill said.
"We do that in the best interests of the game. We are looking forward to the Test match in Melbourne against Ireland (on June 14)."
Gray dismissed the speculation by a Sydney newspaper that the ARU would base Australia's next Super rugby team in western Sydney.
"I saw the story," Gray said.
"Good luck. That's fine.
"There will be a lot of those sorts of stories, the team will go to western Sydney, the team will go to the Gold Coast. I think Melbourne will stand up to scrutiny.
"AFL, rugby league, soccer and tennis are in Melbourne. Rugby union has to be there. The Victorian Government is building a $250 million rectangular stadium for rugby league, rugby union and soccer.
"Melbourne will be well positioned when the opportunity comes along. Melbourne's opportunity has not diminished as a result of that story.
"John O'Neill has been unqualified, publicly and privately, in his support in past years and I'm happy to stick with that."
Melbourne, which lost to Perth for the hosting rights to Australia's fourth Super rugby team, has always been regarded as an important market for rugby.
While the western suburbs of Sydney are regarded in some ways as a separate market, there is little support for rugby union in the area, which is dominated by rugby league.
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