Twisting the Knife

Just when Western Australian Rugby Fans thought things could not get any worse it is announced that Rugby WA has gone into voluntary administration.

The future of the game in WA is in serious doubt, after it was announced this morning that Rugby Australia, formerly the ARU, refused to accept a final offer towards legal fees they claim have reached $1.7 million.

After Rugby WA lost their case to keep the Western Force as part of Super Rugby they were told to pay court costs to Rugby Australia. It is believed that the initial claim by Rugby Australia was around $1million.

According to reports in the West Australian newspaper Rugby Australia’s “last demand was for a reduced amount and that RWA help recover $300,000 from the government’s Road Safety sponsorship deal with the Force. An offer from RWA board members and a group of prominent rugby supporters, including mining magnate Andrew Forrest, was rejected and it is understood the peak body intends to pursue RWA for costs.”

The problem is Rugby WA is already heavily in debt, due to the leasing costs of Rugby House to Venues West; Rugby does not own this building despite what some codes would try and have you believe.

They also owe money to the state Government as part of their contribution to the redevelopment of NIB Stadium.

If the public think that voluntary administration will be the end of the matter they may be a long way off the mark.

A full investigation of the board and the minutes of the meetings will need to be taken to establish where things went off the rails. There have been comments that the Western Force were aware that they were likely to face the axe prior to the commencement of the last Super Rugby season. If that was the case what decisions did the Board make to secure the future of the game in Western Australia should the Western Force be cut?

If, and we are not saying that there was, it was found that the Board had been negligent in their governance then the board members can be held liable, despite not themselves having necessarily done anything objectionable. If it is deemed that they have failed to properly monitor the activities of the CEO and staff, or made unsound decisions which ultimately cause the demise of the business and leave a string of debtors, then they can be held liable. Such situations are however exceptionally rare.

Where such cases can be proven, the personal assets of board members can be seized to meet any damages.

With the current State Government already in a financial hole they are unlikely to want to write-off a debt for the development of NIB stadium which is believed to be in the region of $1.14million. No doubt they will want to investigate further the decision processes of the Board as they pursued Rugby Australia through the courts to try and save the Western Force, despite being aware of the financial implications should they lose. Was this literally a last roll of the dice?

Where does this leave all of the Rugby clubs in Western Australia? Their new season is due to start in five months.

Would they be better off taking control of their own future and setting up a co-operative in which each of the Pindan Premier Clubs owns a share? Would they be better off now determining their own destiny rather than leaving it in the hands of others?

Sadly for Rugby in Western Australia the demise of the Western Force is going to be a game changer in more ways than many anticipated. The team has gone, and now Rugby WA has gone into Administration. Where to next?

Twisting the Knife
Tagged on:                                                                             

Leave a Reply

Your email address will not be published. Required fields are marked *