Rugby Australia’s (RA) CEO Raelene Castle says that the franchise can weather paying out Izzy Folau’s $10m claim. Although CM is not sure that paying out $10m + costs which would wipe out almost 2/3rds of the $18mn in cash on the balance sheet is something a CEO would think is worth boasting. What she needs to focus on is the declining operating performance.
Hopefully, Chairman Clyne will get his CEO to focus on NZ Rugby (NZR) as a benchmark.
RA took in approximately A$30m in licensing and sponsorship last year. NZR raked in A$65m. More than double for a country with one-fifth the population. Think about it. The advertising base is smaller yet the sponsors must see the returns as superior to do so.
Total revenues for RA sum to around A$110m. NZR takes in A$182m in 2018.
Matchday revenue for RA reached A$20m last year. NZR collected A$28m.
Total assets for RA sum to A$69m. NZR total assets are A$183m. Total equity for RA is A$27m vs NZR at $99m.
Perhaps understanding why the Wallabies franchise saw a 20% fall in revenues in 2018 is a bigger issue. Expenses fell 15% mainly due to slashing Super Rugby team costs in half and player costs by 33%. Without that, the company would have sunk deep in the red.
RA needs to focus on growth not cut itself into oblivion. When it prioritizes its customer base rather than put precious resources into virtue signaling and diversity programs the board wouldn’t need to park 2/3rds of the cash to cover up their catastrophic lack of judgment.
Nonetheless good to know Castle sleeps easy at the thought of losing such magnitudes.