British and Irish Lions tour helps wipe out crippling debt on Rugby Australia
CASH KINGS: Maro Itoje and the British & Irish Lions supporters helped crush Rugby Australia's overhanging debts in July. Pic: David Rogers/Getty Images
THE BRITISH and Irish Lions tour to Australia helped wipe out Rugby Australia's crippling debts and allowed them loom at creating a new investment fund for the sport down under.
The Lions tour is expected to generate around $100 million Australian dollars (€55m) which will help lift the dark financial clouds over rugby in Australia and help RA plan properly and creatively for the Rugby World Cup, which it hosts in 2027.
reported that the governing body owed $63.5m to Pacific Equity Partners as part of an $80 million loan provided in 2023 when rugby union was in a deep financial hole. RA chief executive Phil Waugh and chief financial officer Richard Gardham said they had paid off the last of the debt and cancelled the agreement last week. It's the first time the governing body has been debt-free since 2021, when it took out an initial $40 million loan with NYSE-listed Ares Management.
Waugh said becoming debt-free meant RA could try to accelerate plans for the creation of a future fund and reassess whether to put private equity back on the table.
“That’s the conversation we need to have with the board,” Waugh told The Australian Financial Review. “My ambition is to establish an investment fund as quickly as possible. “Given the over-performance on the Lions and the 2025 year ... we’ll have cash flow to carry us through 2026, and ideally we have enough surplus to actually establish the investment fund sooner rather than later.”
The British and Irish Lions tour played out in front of near sellout crowds in July and early last month, delivering a massive cash injection both to RA and the economies of Brisbane, Melbourne and Sydney in particular.
Rugby union in Australia lost fans and players to other codes, including rugby league, for the past decade, but its financial problems were exacerbated by the covid-19 pandemic. The lack of games made it difficult to meet the demands of broadcasters and sponsors, and by the end of 2020 RA had posted a $27.1 million loss. Things went from bad to worse – major sponsor Qantas ended its relationship after 30 years, and the governing body was forced to sign a new broadcast rights deal worth less than the previous agreement.
RA took a $40 million loan from Ares in May 2021 and by the following year began to reassess whether its long-term future involved private equity.
The Wallabies’ failure to reach the knockout stage of the Rugby World Cup for the first time in 2023 and the tumultuous 10-month tenure of coach Eddie Jones put further pressure on the already struggling sport.
reported that Ares was repaid when Rugby Australia refinanced its debt with Pacific Equity Partners in late 2023 after the Rugby World Cup. Since then, RA has signed a new $210 million broadcast deal with Nine Entertainment and its streaming service Stan, and the governing body undertook a restructuring designed to improve the sport’s focus on high-performance.
It also heped that the Wallabies’ win rate has improved under former Ireland head coach Joe Schmidt.
CEO Waugh said earlier this year that he expected RA to make a $50 million profit for 2025 with CFO Gardham stating there was now enough cash to run RA through to the 2027 men’s World Cup, from which he expects another financial windfall.
Added Waugh: “Do you have to [run another private equity process?] No, but it still might be the right strategic direction, and we obviously have optionality around Super Rugby and what it looks like going forward,” he said.
But Gardham said the immediate focus – until the investment fund was established – was to ensure the governing body’s financial position was stable.
