Three-quarters of Rugby Australia’s staff were on Tuesday laid off until July 1 while USA Rugby has filed for bankruptcy as the organisations face huge revenue loss due to suspension of competition in the wake of Covid-19 pandemic.
Rugby Australia predicted huge financial losses from the sport’s coronavirus-enforced shutdown. RA chief executive Raelene Castle described the cuts as “the toughest decision in the game’s history” but said they were necessary to help it survive.
“Although extremely painful, (they) are necessary to ensure the sport remains financially viable and to ensure that we are able to come out the other side of this global crisis, fully-operational and ready to throw everything into the rebuild,” she said.
Castle, who will take a 50 percent cut to her US$500,000-plus salary, said the sport had been hit hard by the suspension of the Super Rugby season after just seven rounds.
Other executives and remaining staff have been offered salary reductions of up to 30 percent and reduced working hours.
Castle said a worst-case scenario, in which the entire season was lost along with Wallabies Tests against Ireland and Fiji, would cost the governing body AUS$120 million ($74 million) in revenue.
Rugby Australia, she added, were in discussions with the Australian government and World Rugby about potential financial support.
Rugby has ground to a halt in Australia and elsewhere around the world, depriving clubs of much-needed ticket sales and broadcast money.
Rugby Australia on Monday posted a near Aus$10 million ($6 million) deficit, exacerbated by a hefty payment to former Wallaby Israel Folau after his sacking over homophobic social media posts.
Castle said talks were under way with the Rugby Union Players Association over a deal on player payments which will reportedly involve cuts of 30 to 50 percent.
Seeking World Rugby’s support
Meanwhile, USA Rugby said the suspension of competition resulted in “significant loss of revenue from spring and summer membership dues, sponsorship drawbacks and additional revenue sources.”
The bankruptcy filing includes a plan for a financial support package approved by the executive committee of the global governing body World Rugby.
That will bolster the federation through re-organization, with World Rugby and other creditors to sign off on an eventual restructuring plan.
The men’s and women’s national teams, in 15s and Sevens, will continue “to compete as normal” when rugby returns after the pandemic.
“While the current climate is of course much larger than rugby, we remain focused with stakeholders and supporters in the continued effort toward a balanced rugby community where the game can truly grow,” USA Rugby chair Barbara O’Brien said.
