ARU explores Super 14 private equity
Sat, 19 Apr 2008 10:04
The Australian Rugby Union (ARU) is to explore the potential for private investment in its Super 14 teams.
The Sydney Morning Herald reported that shortly after reporting an $8.4 million loss for last year, the ARU announced at its annual general meeting on Friday that it wanted to introduce private equity to the Australian provincial level to dramatically improve the game's standing and financial position.
ARU chairman Peter McGrath said that although private equity had previously not been permitted under the Union's policy, it was time to take the plunge.
"Private equity is not a dirty word," McGrath said. "It has been a major contributor to the success of various sports in Australia and around the world. We can learn from the triumphs and failures in other sports … and it is time we look to embrace private equity."
However, McGrath warned that private equity "would have to be tightly controlled, and controlled nationally".
ARU chief executive John O'Neill said the level of private investment had to be worked out. "We will be moving ahead very cautiously on this," he said.
O'Neill argued private investment would broaden Australian rugby's 'overall capital base'.
"Rugby league teams have traditionally received support from licensed clubs and private benefactors, and it is the same in AFL," he said. "Football, soccer, has private equity at the 'A' level.
"Private equity will free up money at the ARU and at the state unions so that it can invest in the growth of the game. We can live without private equity, but to expand, grow, and be ambitious, private equity will be of great value to us."
O'Neill believed the Australian business community would be intrigued by the chance to invest.
"My intuition is that there will be interest," he said. "Rugby has a very strong attachment to the big end of town, with captains of industry and an alumni that other sports are fairly envious of. I'm fairly confident we will find people willing to invest in a game they love, have a bit of fun, and see a reasonable return on their investment."
The move has received support from the Australian provinces and the Rugby Union Players' Association.
New South Wales Rugby Union chairman Arvid Petersen said introducing private equity was "a bold challenge for our game, but we have to be bold to stay ahead of the competition".
Force chairman Geoff Stooke said he was pleased the ARU had made it clear that overall control would remain with the national and state unions.
