Did Australia dodge a PE bullet?

RA bosses point to bright financial future with thinly veiled swipe at NZ; a few things to watch over Easter including Rocketman Adams; and John Daly's alternative Masters experience.

The on-field wins remain rare, but will Australia beat NZ on the balance sheet? Getty Images

A short-ish Easter missive.

An interesting headline was spotted on Sydneyside this week and if you’re getting hints of smug undertones in a casserole of schadenfreude, then you’ve correctly identified the dish that Rugby Australia is cooking up.

The story boils down to the idea that Rugby Australia is far better future-proofed having “rejected” the overtures of private equity in favour of taking on more debt. This is in the wake of RA announcing an A$36.8 million deficit for 2024 while projecting big surpluses to come.

The premise might well be true, but it is a bit rich to put this in the category of strategic genius. RA under former chairman Hamish McLennan desperately wanted private equity money. Tittle-tattle of the time pointed to RA officials being furious that NZR had gone out alone, believing there was scope for big funds like Silver Lake and CVC to invest in Sanzaar and its competitions collectively. Even after NZR signed what is starting to look like an ill-fated deal with Silver Lake, McLennan was still touting the benefits of an imminent equity deal as recently as 2023.

“We’re looking at how we best partner with private equity while retaining a strong level of involvement and oversight of critical assets,” [McLennan] said, adding that critical assets included media rights, merchandise and fan engagement…

A portion of outside capital raised by Rugby Australia will also pay down existing debt, invest in Super Rugby teams… and member unions and players, he said.

For inspiration, Rugby Australia is looking to New Zealand Rugby, which welcomed $200 million from Silver Lake last June.

Doesn’t really sound like an organisation that was ready to chart its own brave path because it identified the fishhooks in PE. Instead, most likely, they received underwhelming valuations of its business and were forced instead to take on a huge $80m debt facility with Pacific Equity Partners.

That debt will likely be paid off by profits from this year’s Lions tour, while a pumped-up broadcast deal with Channel Nine and the imminent hosting of the men’s and women’s world cups has many predicting a bright financial future, free from the anchor of an annual stipend to a global investment firm.

More by good luck than good management, it appears RA have escaped a private equity noose, but they would do well to remember a few things:

1. Lions tours come around once every 12 years;

2. Hosting a hugely successful RWC did not pay dividends for French rugby, quite the opposite in fact, with the French Court of Audit stating that the tournament was an “undeniable success with the public, the media and in a sporting sense,” but generated financial losses which could reach up to nearly €29 million.

3. Returning to winning ways is essential for the long-term health of rugby in Australia and while the green (and gold) shoots of recovery are obvious, it has still been a long time since the Wallabies won anything significant.

Still, if you’re Australia, having dealt with what they perceive to be a supercilious NZR for the past decade or two, you take the wins. And I did enjoy this droll, I’m-not-saying-anything-while-saying-everything line from chairman Daniel Herbert when asked how he thought his NZR’s deal with Silver Lake is working out.

“I know they went through a very extensive process to get that over the line. It’s not for me to say whether that’s working or not. I just know that I’m glad we made the decision we did.”

Touché.