Rugby Australia wipes $63m debt after bumper Lions windfall

2 weeks ago 3

A substantial financial windfall from the British and Irish Lions tour, which saw Rugby Australia pocket as much as $120 million, has allowed RA to clear its debt and turn focus towards the creation of a future fund to sustain the game.

While the visitors snuck away with a 2-1 Test series win, the overall Lions tour was a major victory for Rugby Australia, with record crowd numbers, touring fans and commercial returns delivering a financial result that exceeded original forecasts.

Under an unprecedented joint venture agreement with the Lions that split all profits, apart from home broadcast and naming rights deals, it was forecast Rugby Australia would make $100m. Final figures haven’t been reported, but sources with knowledge of the situation, who requested anonymity to speak freely, said the tour had yielded revenues up to 20 per cent higher than budgeted.

Whatever the exact figure, RA’s windfall was enough to return it to the black last week by paying back $63.5 million of debt owed to Pacific Equity Partners, as part of an $80m credit facility sourced in 2023.

The original five-year agreement with PEP was due to run until 2028, but built-in flexibility allowed RA to repay the debt and exit early. RA settled up and cancelled the agreement last Friday.

It means RA is now debt-free for the first time since 2021, when it took on a $40m loan to keep the game afloat during the COVID-19 crisis. That loan, with ARES Management, was later re-financed into the $80m credit facility with PEP, which was preferred to a private equity deal.

Rugby Australia chief executive Phil Waugh.

“Repaying the credit facility ahead of schedule is a significant milestone for the game and reflects the commercial success of the British & Irish Lions series, cost discipline and the efficacy of Rugby Australia’s organisational reset,” RA boss Phil Waugh said in a statement.

“This milestone marks the achievement of the first of three horizons we are committed to reaching and provides a strong foundation for us to build towards the next two.

“RA’s next horizon is the establishment of a sustainable financial model for the game through the 2026-2030 period, and work is well progressed in delivering on this.

“In parallel, we are designing a framework for how best to utilise the profits from the Lions series and the 2027 and 2029 Rugby World Cups to grow Australian Rugby’s long-term sustainability.

Up to 40,000 Lions fans flew to Australia to watch the tour.

“This could potentially be in the form of an investment fund to drive investment in the game from end-to-end and will be strongly aligned to RA’s Green to Gold strategy.”

The positive financial landscape is a sharp turnaround from the $36.8 million deficit reported by RA in 2024; which was impacted by the disastrous 2023 Rugby World Cup, and RA taking over the Waratahs and the Brumbies, and funding the Rebels in their final season.

Rugby Australia will bank another $100m for hosting of the 2027 Rugby World Cup, as part of a joint venture with World Rugby.

As first floated by former chair Hamish McLennan in 2022 when Australia’s bid won the race to host the 2027 World Cup, RA are keen to create a “future fund” with the Lions and World Cup profits, which would be locked away, invested and used to fund rugby at all levels in the country.

Joseph-Aukuso Suaalii of the Wallabies is brought down by a pack of Lions.

The investment fund would be modelled on the one set up by the Australian Olympic Committee, which banked $80m profit from the 2000 Olympic Games.

“It’s pleasing to now be in a debt-free position,” RA chairman Dan Herbert said. “A lot of work from many people has allowed us to arrive at this point well ahead of schedule and credit must go to Rugby Australia management and the Wallabies team and management for their hard work through the recent British & Irish Lions series.

“That said, we are still acutely aware that our responsibility is to put the game into a sustainable financial position for the long term. There is plenty left to do but I am confident in the ability of our team to lead this and to allow rugby to grow and thrive in Australia.”

Meanwhile, star winger Max Jorgensen says the Wallabies have grown from the side who was humbled by Argentina 67-27 in their last meeting in Santa Fe last year.

The Wallabies meet the Pumas on Saturday afternoon in Townsville and temperatures of 28 degrees are forecast; similar to the hot conditions last year, when Australia raced out to a 20-3 lead then conceded 64 points in the next 50 minutes to suffer a record defeat.

“Obviously we’ve been watching a lot of film from that game and I think we’re a very different team now to what we were a year ago,” Jorgensen said. “Looking back at some of those clips, we talked about that’s not us, and that’s not how we play.