Rugby Australia announced a $27.1 million loss for 2020 at its annual general meeting on Thursday, with chairman Hamish McLennan labelling the governing body’s balance sheet “horrible” following a 12-month period significantly affected by COVID-19.
Yet in light of RA shedding $31.2 million in costs last year, McLennan has hit out at unnecessary spending by previous administrations, saying it was a missed opportunity to have not invested more into grassroots rugby each year.
The Wallabies during last year’s Tri-Nations. Credit:Getty
The full extent of RA’s financial predicament has been laid bare, with the governing body recording a 41 per cent reduction ($45.7m) in revenue in 2020.
This was due to a reduction in broadcast revenue from fewer home Tests, a significant drop in gate takings, while trying to continue to maintain a “massive” cost base as COVID-19 halted matches from March until July and impacted the Test calendar.
While a $27.1 million deficit does not make for pretty reading, in comparison, New Zealand Rugby announced on Thursday a loss of NZ$34 million ($A31.6 million) last year.
However, NZR had a 26 per cent decline in revenue, compared to RA’s 41 per cent.
The Wallabies played only six Tests in 2020 and RA was forced to split profits with New Zealand and Argentina during a condensed Tri-Nations tournament, hosted in Australia.
“It’s a tough set of results during a nightmare COVID-19 year,” McLennan told the Herald. “In truth, the balance sheet is horrible but we’ve kept the game alive and we’re fighting on and making real progress.
“All codes have lost money, which is a fact of life.
“This highlights the importance of finalising a private equity deal and strengthening our balance sheet.”
RA has slashed a huge portion of its cost base, including RA staff ($9.9m), player costs ($7.7 million), member union funding ($8.1 million), to go with $5.5m of other spending.
McLennan said it was a necessary step to keep the game afloat and that money was being wasted, even before COVID-19.
“We’ve cut $30 million of costs out of RA and it’s operating better than before,” McLennan said.
“I lament the fact that in good times we could have easily put $20 million to $30 million dollars into grassroots rugby, which was a missed opportunity over the years.”
RA announced an 11 per cent drop in participants during a COVID-19 affected year but reported an increase in junior and female participation.
In a statement, McLennan added: “Nothing could have prepared us for 2020. When the extent of the COVID-19 pandemic became clear in late March, we were forced to shut down both professional and community rugby across the country. The organisation was shaken to its core.
“It has been an extraordinary job just to survive. We will carry a very weak balance sheet into this year, in what will be a very testing time. This only highlights the importance of external investment as we look to alternate sources of funding to reinvest back into the game.”
More to come
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