Australian rugby appears to be on the verge of another civil war just two weeks out from the start of Super Rugby Pacific season, as the financial crisis at Melbourne Rebels took another extraordinary turn on Thursday.
With creditors meeting online to comb over the Rebels woes, a document revealing a plan to merge the Rebels with Moana Pasifika was presented and later leaked to the Herald Sun.
According to the Herald Sun, the 16-page document alleges that midway through last year, Rugby Australia had "demanded" the Rebels join forces with Moana and that the new entity be based out of Auckland. The document also alleges that a team based in either Japan, Hawaii or on the west coast of United States then be added to continue Super Rugby Pacific's 12-team footprint.
The Rebels entered voluntary administration last week, with chairman Paul Docherty, who also chairs BRC Capital, one of the franchise's major sponsors and that is also in serious financial trouble, stepping down. ESPN does not allege Docherty has done anything wrong.
"As at 18 July 2023 Rugby Australia was requiring Melbourne team to be known as Rebels Pasifika in its dealing with Rebels, Victorian Government, the British and Irish Lions Tours to Australia in 2025," the document reads, as reported by the Herald Sun.
At the same juncture last year, RA had indicated that Pasifika players would be added to the Rebels squad to face the British & Irish Lions in 2025, a game that is down to be played between the first and second Tests with the Wallabies, but which now looks in grave danger of proceeding at all.
RA boss Phil Waugh, who has insisted Australian rugby had to learn to live within its relatively meagre means and has not guaranteed the Rebels would survive beyond 2024, said his organization would not be engaging in discussion around the document.
"Rugby Australia is aware of a document that has been circulated to the media today and is purported to be signed off by the Melbourne Rebels Board and Rugby Victoria," Waugh said in a statement.
"Our immediate focus and priority is to work through the voluntary administration process diligently and appropriately with the administrator, and to engage with the key stakeholders to ensure that the team can participate in the 2024 Super Rugby competitions.
"Given this, we do not intend to respond to the various accusations and assertions within the document."
ESPN understands that New Zealand Rugby was made aware of the merger proposal that originated in Australia, at is very base level, but was never presented with anything formal beyond the initial idea.
The document, prepared by the Melbourne Rebels and Rugby Victoria, also alleges that RA would likely be liable for up to $8m of the club's near $20m debt, which is owed to the Australian Taxation Office, Rebels board members and the Victorian Government.
According to the Herald Sun, the document then proceeds to lambast RA for overspending on the Wallabies' disastrous Rugby World Cup campaign, which ended in the team's failure to make the quarterfinals for the first time in its history.
RA was criticized for several glitzy events that it held during the tournament, so too a Wallabies budget that former RA chairman Hamish McLennan, who was voted out late last year, said had blown out well beyond what had been agreed with coach Eddie Jones.
"Yeah it was a little bit," McLennan told Stan Sport's Nick McArdle asked whether the blowout ran into the millions.
"We don't disclose that but yeah, it did extend the budget... more than we would like."
In his time as RA chairman, McLennan was able to secure an uplift in broadcast revenue from NZR, after threatening that Australia could walk away from Super Rugby Pacific unless a greater chunk of the broadcast pie was shared.
That helped to ease some of the governing body's financial pain, after it was forced to take out a loan from World Rugby during the COVID pandemic, a time when RA cut its funding to Super Rugby franchises by $1.7m. That figure was not restored despite the uplift in broadcast revenue secured with NZR, nor after RA took on an $80m debt facility with Pacific Equity Partners last year.
"Reneged on commitments made to find additional $1.7M for each Super Rugby Licensee for 2023 Season and a further $1.7M for 2024 new allocated over funds for the Joint Venture Partners," the leaked document alleges.
This latest development will raise fears Australian rugby will once again be embroiled in a civil war, just as it was in 2017 when the Western Force was booted from Super Rugby as SANZAAR [the South African, New Zealand, Australia and Argentina rugby alliance] sought a return to a 15-team competition.
The Force later took their fight for survival to the Supreme Court but failed in its bid to maintain a place in Super Rugby. Later, mining magnate Andrew Forrest acquired the club and reportedly offered RA $50m in equity funding. RA did not accept the offer.
The Force returned to the Super Rugby fold when RA established Super Rugby AU in 2020 and 2021 when COVID-19 enforced border closures had made trans-Tasman play incredibly challenging.
Forrest continues to support the Force, who have acquired Wallabies Nic White and Ben Donaldson, and just this week former Crusaders hooker Ben Funnell, in what is one of the stronger squads the Perth-based franchise has ever assembled.
That was also the case for the Rebels, who have brought in star Wallabies prop Taniela Tupou and former Test lock Lukhan Salakaia-Loto, to help bolster their forward pack. The Rebels made a strong start to their preseason campaign last week, beating the Waratahs 38-12.
But a dark cloud now lingers over the team's immediate future, so too its women's Super W outfit, unless the Victorian Government steps in or an equity partner is found to help keep the franchise afloat beyond this season.