Civil war is about to erupt in Australian rugby, with the Melbourne Rebels to sue Rugby Australia as the embattled Super Rugby franchise fights to stay alive, reports Christy Doran and Mark Drummond.
As foreshadowed by The Roar on Monday, the Rebels board has served notice to launch legal proceedings against the directors of Rugby Australia and President Joe Roff. Details of the legal claims are expected to be revealed by Thursday.
It’s believed the Rebels pulled the trigger and served RA with notice on Friday in Melbourne – the same day the city was hosting the three-day, six-match Super Round.
The Melbourne Rebels are set to sue Rugby Australia. (Photo by Daniel Pockett/Getty Images for Rugby Australia)
As a result of the Rebels’ intensions to sue the governing body, Rugby Victoria President Neil Hay was asked not to attend RA’s two-day Australian Rugby Summit.
As one administrator said: “They’re going down swinging.”
Another said RA should be “nervous”.
The legal proceedings launched against RA were prepared by three prominent Melbourne silks thought to be acting pro bono for the Rebels in an attempt to recover up to $8 million the club claims it is owed by the governing body for allegedly starving the club of $6 million funding for several years and $2 million to cover the wage costs of Rebels players on Wallabies’ duty.
The stakes are high for RA in the looming legal court showdown because if the Rebels are successful in proving their underfunding claim in the courts, it could open the floodgates for the other Super Rugby franchises to follow suit and make their own claims.
It comes after the Rebels were successful last month in staving off a move by RA to put the club into liquidation, with Federal Court Justice Catherine Button giving the Rebels a 60-day extension to keep in place the voluntary administrators the club appointed in January.
The Melbourne Rebels celebrated their first win of the Super Rugby season against the Western Force last Friday – the same day the Super Rugby franchise informed Rugby Australia they planned to sue them. (Photo by Darrian Traynor/Getty Images)
The Rebels have debts of $22 million, about half of which is owed to the Australian Taxation Office, with little in the way of assets.
At the same time RA is hoping to turn around their on-field performance, the cash-strapped union is currently battling to stay financially afloat.
Last December, the governing body took out an $80 million flexible loan deal with Pacific Equity Partners (PEP) to try and drive the game forward ahead of hosting the 2027 Rugby World Cup. The Wallabies brand was used as collateral.
It’s believed half that figure has been used to pay of RA’s previous loan with Ares Management.
If the Rebels were to be successful, RA’s loan would be quickly dry up.
It’s believed the interest repayments on the PEP deal are 12 per cent, with another three per cent being taken by the fund. That equates to 25 per cent of RA’s current broadcast deal, which expires at the end of 2025.
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