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BY: WAYNE SMITH From: The Australian December 24, 2011 12:00AM
THE Brumbies are floundering financially following the withdrawal late on Thursday of their intended naming rights backer, Chinese company Huawei, from a four-year $4 million-plus sponsorship of the club.
Almost certainly the Australian Rugby Union, which in recent weeks itself announced an $8m loss this year, will have to step in and save the franchise - Australia's most successful Super Rugby club, with two titles - just as it did the Queensland Reds last year.
Brumbies chief executive Andrew Fagan declined to comment yesterday, but it is known he was alerted around 6pm on Thursday that Huawei, China's largest privately owned company and one of the world's leading manufacturers of telecommunications equipment, was backing out of a deal he believed was as good as done.
Indeed, it is understood the China-based board of the company actually had signed off on the Brumbies deal and even had approved jersey designs incorporating the company logo when Huawei's satellite board in Australia encountered a massive problem unconnected to the club and withdrew its lucrative sponsorship.
That has given rise to speculation that Huawei had been told it would be allocated no part of the National Broadband Network rollout, but a company spokesman said yesterday Huawei was still hopeful of becoming a major supplier to that project.
But the problem is that the Super Rugby season starts early, with the Brumbies' first match scheduled for Canberra Stadium on February 24 and the company could not defer a decision on its sponsorship any longer.
"If we were to go ahead with it, we needed to make a decision before Christmas and we're not in a position to do that," the Huawei spokesman said. "But that doesn't mean we won't look at it again later in the year."
That is of scant comfort to Fagan, Brumbies chairman Sean Hammond and the club board members, all of whom will go into the Christmas-New Year break realising that unless they can almost immediately find a sponsor willing to pour more than $1m a season into the franchise, the club will have to "invite" the ARU to temporarily take charge of its finances, just as it still is doing with Queensland.
It is understood ARU boss John O'Neill and his chief lieutenant Matt Carroll have been alerted to the Brumbies' dire predicament. And having set precedents in the past by bailing out the NSW and Queensland Rugby Unions from financial problems, the national body is unlikely to turn its back now on the ACT-based team, even though its own financial standing is also precarious.
"We have to go back to the drawing board," a Brumbies insider said yesterday. "And the timing is murder, two days out from Christmas. You don't get companies committing to sponsorships at this time of year.
"If we don't get this resolved, we'll definitely have cashflow issues. There's no getting around that. If you take away the naming rights sponsor of any Super Rugby team, it's going to create a massive problem.
"No one can afford to run their program with that sort of hole in the budget."
The Brumbies trawled far and wide this year seeking a naming rights sponsor to replace long-time supporter Computer Associates, but the harsh reality now is that even if they manage to reignite interest from some of the potential sponsors they had courted, the club has no bargaining position whatsoever.
As far as naming right sponsorships go, this will be a fire sale.
The one bright light on the Brumbies' horizon is that the redevelopment of the property on which the club is located is expected to be resolved within a year.
That should not just put an end to this crisis, but leave the Brumbies cashed up like no other Australian Super Rugby franchise. But there is still an awkward 12 months to negotiate.
Brumbies powerbrokers are insisting that the club's coaches, players and support staff will not directly be affected by Huawei's withdrawal, but the financial crisis still threatens to destabilise the club and undo much of the good work new head coach Jake White, the man who coached the Springboks to the 2007 World Cup, wanted to do in the pre-season.
There is little doubt, too, that this latest episode, coming on top of the messy sacking of head coach Andy Friend two matches into last season and the club's subsequent lowly 13th-place finish, will put Fagan back under the microscope.
http://www.theaustralian.com.au/news...-1226229706660