Fans have been rejoicing this week at the news Rugby Australia is now debt free for the first time in half a decade.
A reason to celebrate? Yes. But time for a cash splash? No.
A huge debt has been paid off thanks to an exceedingly successful British and Irish Lions tour – bringing in as much as $120 million – but any thoughts about a spending spree should be tempered.
Watch the 2025 Rugby Championship with every match streaming live and on demand on the home of rugby, Stan Sport
Harry Wilson of the Wallabies embraces teammate Nic White after the team’s victory. Getty
Frivolous financial behaviour at the first sign of fiscal freedom could be the first steps to another freefall into the abyss, and it has before for rugby.
Two decades ago, when Australia hosted a Lions tour (2001), followed by a home Rugby World Cup (2003), the ARU recorded profits in the multi-millions.
There’s conjecture over how that surplus was squandered – allegations of fat bonuses for executives, recruitment of over-priced cross code stars, open hands and mouths demanding their share – but whatever the reason, there can be no debate that the money was not used wisely.
READ MORE: Dreaded de Minaur curse continues at US Open
READ MORE: NBA rocked by alleged $43m salary cap breach
READ MORE: ‘He loves this’: Scheming Bennett relishing spoiler role
Having just come off a Lions tour and with a World Cup two years down the track, the game is in a period of ‘deja vu’, and could run the risk of history repeating.
Thankfully, from what we’re hearing, that doesn’t appear likely to be the case.
But what that means is there’s likely to be some pain still to come.
NEW PODCAST! Rugby Australia is debt free after the British and Irish Lions tour so should they now splash the cash on a Mark Nawaqanitawase return?
The financial position of the game, in the wake of the debt-clearing news, was a major topic of discussion on this week’s episode of Stan Sport’s Inside Line
With Justin Harrison, Michael Hooper and Iain Payten on the show, we covered the facts of the situation and areas of investment the game needs to prioritise in a robust and detailed discussion.
But as Payten pointed out, RA are likely to cut costs even further in the more immediate future.
Phil Waugh, Brett Robinson and Alan Gilpin in Sydney. Getty
What areas those margins are squeezed is yet to be determined – it may be in personnel, it may be in resources, it could be in travel – but it’s going to mean there is pain still to come.
Three areas that should remain off limits to cost-cutting are community, professional player and coach resources (development, retention, recruitment).
But there must be pain in order to grow.
Rugby Australia chairman Daniel Herbert speaks to the media during a press conference. Getty
CEO Phil Waugh and chairman Daniel Herbert, along with their executive team and board, have done an excellent job getting the game back in the black at this point, but rather than flash the cash, fans should expect – and applaud – a conservative, penny-pinching approach to at least the next 12-24 months.
Harrison is the CEO of the Rugby Union Players’ Association – so when he talks business, it’s worth listening to.
He knows the game’s future is still on a knife’s edge and it’s time for accountability with cash, conservatism with decision making and concrete future planning.
“(The Lions tour) landed revenue and has an ability to erase existing debt and then has a period of stability moving forward” Harrison said on Inside Line.
“For the first time in a long time, the balance sheet has a foundation again to recognise the performance of the business.”
In layman’s terms, RA as a business is in a solid spot, one which is perfect for taking some deep calm breaths and the time to sit back and take stock of where rugby is at and where it can go next.
Debate will rage about where surplus money can or should be spent, but actually spending that money should not be rushed into.
Small investments now, sure, but any big decisions need to be made with the utmost caution.