AUSTRALIA

ARU seeks private investment

Thursday 17th April 2008

Peter McGrath: Ready to accept private backing

The Australian Rugby Union announced on Thursday that it would seek private investment in its domestic Super Rugby teams in a reversal of it's previous policy.

The move comes on the back of a loss of A$8.4 million (7.8 million USD) last year, falling participation rates and increased competition from other winter sports codes.

The ARU Board said the initiatives were designed to secure the Australian game's long-term popularity and financial prosperity.

The boards of the Queensland and New South Wales Rugby Unions have come out in support of the initiative.

The ARU said an injection of capital from the private sector at Super Rugby level, under tightly-controlled conditions, was an essential next step in the game's evolution.

ARU chairman Peter McGrath said his Board was committed to growing the game at all levels.

"If we want rugby to have a greater footprint in Australia, if we want to have a stronger competitive position against the other major football codes, then we need to advance," McGrath said in a statement.

"We need to push for an expansion of Super Rugby and explore the introduction of private equity, which has not previously been permissible under ARU policy.

"Private equity is not a dirty word. When managed correctly, it has been a major contributor to the success of various sports around the world.

"We are now a mature professional sport. It is time to look at embracing it."

ARU Managing Director John O'Neill said the strategies to improve Australian rugby's standing nationally and internationally had been extensively researched and discussed at a three-day planning conference last January.

"We need transformation at the professional level, and that can be achieved through the injection of capital from alternative sources that have an affinity and affection for the game," O'Neill said in the statement.

"Private equity, however, will need to be tightly controlled and controlled nationally to ensure enduring benefit for the code while also recognising the interests of equity partners."

The statement said the ARU Board would work with key stakeholders to move the process forward, adding that it also would assess possibilities for future competitions.

"Clearly, any changes to Super 14 require the agreement of our SANZAR partners and inevitably they will have their own ideas for change and we look forward to sharing an exchange of views," the statement said.

The ARU Board reported that a reduced Tri-Nations series and a match programme last year had contributed to a $4.8-million downturn in gate takings, corporate hospitality and licensing.

Queensland Rugby has said that it fully supports the ARU's drive, provided support for the broad amateur base of the game is maintained, QRU Chairman Peter Lewis said on Thursday.

"A QRU Board sub-committee has also been exploring for some months the feasibility of introducing private equity involvement into the running of our professional team, the Queensland Reds," Mr Lewis said.

"I don't personally support a single ownership arrangement, but having equity partners injecting risk capital in exchange for a commercial return on their investment is definitely worth exploring," Mr Lewis said.

"However the non-negotiable in all this would be that we achieve a financial balance that enshrines and protects the amateur game and that returns from the professional team's activities continue to support the grassroots."

Mr Lewis said Queensland Rugby also fully supported any moves to expand the Super 14 competition.

"Quite simply we need more product at the provincial level to offer the rugby public. It's not possible to maintain a large professional rugby squad on the returns from six or seven home games a year," Mr Lewis said.

"We're extremely excited by the initiatives announced today," said Arvid Petersen, Chairman of New South Wales Rugby.

"The introduction of private equity is a bold challenge for our game but we have to be bold to stay ahead of the competition.