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The Melbourne Rebels, one of Australia’s five Super Rugby clubs, is struggling to pay its tax bill and even the fees to use its own stadium AAMI Park, as it attempts to manage ongoing financial issues.
Paul Docherty, chairman of the Rebels and owner of the club’s main sponsor, BRC Capital, told The Australian Financial Review the Rebels were financially viable despite its board received notices from the Australian Taxation Office with concerns about withheld payments.
Rugby Australia wants to take over the financial and high-performance divisions of the country’s five Super Rugby clubs in an attempt to grow revenue and win matches at an international level. But doing so has proved difficult, given the precarious financial positions some clubs are in.
Sources familiar with the Rebels’ position, who weren’t authorised to speak publicly on the matter, said the ATO had issued penalty notices to the club’s board directors over failures to make payments in time.
Penalty notices typically allow directors 21 days to act – they need to pay the debt or the company must be placed into voluntary administration.
The board, led by Mr Docherty, has eight directors: Georgia Widdup, the daughter of former Qantas chairman Leigh Clifford, Tim North KC, Treasury Wine Estate board member Lyndsey Cattermole, Gary Gray, Owain Stone, Neil Hay and Dominic Shipperley, a former player.
One Rebels source familiar with the situation said the issue with the ATO was close to being resolved. An ATO spokesman said he could not comment on the tax affairs of any individual or entity.
“Our dealings with them are not only confidential they are cordial and cooperative, and we are ensuring with them that the Melbourne Rebels meets its obligations both now and into the future,” Mr Docherty said.
Other sources familiar with the Rebels’ finances, not authorised to speak publicly, said there were also unpaid bills to the Melbourne and Olympic Parks Trust, with more than a million dollars in lease payments and hiring fees owed at one point.
AAMI Park, where the Rebels run training and administration facilities, is under the management of the Melbourne and Olympic Parks Trust.
“We are in constant communication with them and have always met our obligations, even during the darkest days of COVID,” Mr Docherty said. “I don’t think it’s any surprise that there are funding issues in the game across the board, it’s very well documented, and we are not immune to the knock on effects of that.”
Privately, the club is blaming its inability to lock in firm payment plans on a lack of clarity from Rugby Australia about funding. But Mr Docherty said the club still had its sponsors, members and private funding to ensure it could remain commercially viable.
“That will continue as long as is required,” he said. “We’ve also had long and incredible support from the Victorian government.”
Money problems
Rugby Australia pays clubs several millions of dollars each year which comes from the broadcast deal it has in place with Nine Entertainment, the publisher of the Financial Review. The broadcast deal with Nine was smaller than a previous arrangement struck with Foxtel, which means the payments are smaller than they were before the COVID-19 pandemic.
Rugby Australia told clubs last week it was not increasing funding next year because the organisation cannot afford it. Rebels sources claim they were waiting for that meeting to be able to lock in payment plans with the Trust and ATO and resolve outstanding payment issues.
“We work collaboratively with all our Super Rugby clubs,” Rugby Australia chief executive Phil Waugh said. “We also need to be fiscally responsible when considering taking on additional liabilities.”
The financial situation the Rebels finds itself in isn’t unique. One of the catalysts for the ousting of Rugby Australia chairman, Hamish McLennan, was a $1.7 million grant provided to the ACT Brumbies which converted into an interest-bearing loan. There were also concerns about the dire financial position of the Waratahs, although the club has rejected this is an issue.
Rugby Australia’s strategy to resolve the longstanding financial issues of the game is “centralisation” which involves unifying player contracts and establishing a national approach to coaching, and strength and conditioning programs. The main sticking point is still whether to transfer Super Rugby’s commercial divisions over to Rugby Australia and whether it should absorb millions of dollars in debt on the books of some of its clubs.
The NSW Waratahs are currently the only club planning to hand over assets and liabilities and will do so early next year.
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