HomeNewsFinance & MoneyRugby UnionAustralia

Rugby Australia expects return to profit to be short-lived

Rugby Australia has reported a net profit of AUD$5.2m (€3.29m/$3.7m) in 2018, but has warned it will operate at a loss in 2019 due to the Rugby World Cup.

The national governing body for rugby union said the net profit was recorded thanks to a AUD$14.9m net expenditure reduction primarily due to reduced funding allocated to Super Rugby, player costs decreasing, and a reduction in administrative staffing and overhead costs.

The reduction in funding to Super Rugby was due to the controversial removal of the Western Force franchise in August 2017, reducing Australia to fielding four teams in the southern hemisphere competition.

The 2018 financial results come after Rugby Australia chairman Cameron Clyne admitted to “an incredibly difficult year” after the organisation posted an operating loss of AUD$3.8m in 2017. While stating that the financial results for 2018 are generally positive, Rugby AU said it will operate at a loss in 2019 due to reductions in broadcast and match day revenue owing to the reduced domestic Test schedule in a World Cup year.

Rugby AU added that 2019 also presents another significant milestone for the sport in the region, with Sanzaar, the umbrella organisation of major southern hemisphere unions, due to finalise its next commercial broadcast rights agreement.

Clyne also noted that the performances of the men’s national team, which won only four of 13 Tests last year, needs to improve in 2019. He said: “While we have once again experienced significant growth in women’s rugby, growth in club XVs for the first time in several years, and substantial growth in sevens, it is undeniable that the performance of the Qantas Wallabies rightly or wrongly overshadowed some of the other successes of our code.

“To achieve our ambitions for the game we need winning teams that can galvanise support from millions of Australians and inspire generations of future players. When this happens, the financial benefits follow, which means there is more money available to invest across the game.”

Rugby AU’s financial results come amid a period of uncertainty for the sport as talks continue over World Rugby’s plans for a new national team competition.

World Rugby last month released a revised masterplan for its proposed Nations Championship, including details of a lucrative commercial partnership with the Infront agency. Rugby AU is believed to be broadly in favour of the proposals being made.