Private owners to rescue the Reds

[travelling_gerry]

Bret Harris | August 05, 2009

Article from: The Australian

THE embattled Queensland Reds are prime candidates to become Australia's first privately owned Super rugby franchise.

Queensland's lack of success has reached plague proportions with the once-proud team finishing in the bottom three on the table for the past six years.
With the departure of Wallabies inside back Berrick Barnes to NSW, the Reds seem condemned to another poor season next year.

Off the field, the Reds posted a $203,000 operational loss last year, which is not unusual for Super rugby teams, but it would be a concern if it was happening year after year.

The Reds are also in a state of flux administratively with the recent resignations of chairman Peter Lewis and chief executive Ken Freer.

All of this makes the Reds an ideal target for a private consortium.

ARU chief executive John O'Neill has made no secret of the fact he wants to see a new ownership model at the 2011 Super 15 rugby expansion franchise. O'Neill is looking for private equity, rather than the traditional state union, to play the major role in the running of the new team.

At present, there are six Australian bidders for the licence to operate the 15th Super team, following NSW Country's decision yesterday to withdraw from the race.
While only one bid will be successful, the process has flushed out potential private equity in Melbourne, western Sydney and the Gold Coast.

If the licence is awarded to one of the three Melbourne bidders (or a combination of them) as expected, this will leave the other consortiums all dressed up with nowhere to go.

In this circumstance, the Gold Coast consortium, which is led by O'Neill's close friend and former ARU director Terry Jackman, may turn its eyes to the Reds.
If the Gold Coast consortium could secure the Reds' Super rugby licence, it could run the professional team on behalf of the QRU, which could then concentrate on administering club, country and junior rugby.

A privately owned Reds team could also play one or two home games on the Gold Coast, which would fulfil one of the consortium's main objectives.
It is not as far-fetched an idea as it might sound.

The Gold Coast consortium could approach the QRU and its constituent clubs in Brisbane and Queensland Country with a business proposition to buy the Reds' Super licence for a fee and pay an annual royalty.

The QRU could reject an approach, but changes in the Ballymore boardroom may also result in a new leadership that is sympathetic to the ARU plan to introduce the private ownership model to the Super rugby teams.

There has been speculation former QRU and ARU chairman Dick McGruther and ARU director, former Wallabies second-rower Rod McCall, are the favourites to replace Lewis.

McGruther and McCall, who is the most likely to get the QRU chair, have close ARU links and may be supportive of any plan to privatise the Reds.
If not, the ARU may be in a position to persuade the QRU to accept private ownership of the Reds' licence.

At a recent chairman and chief executives meeting, O'Neill assured the states that they would not be required to relinquish their Super rugby licences when the current broadcast deal with News Ltd (publisher of The Australian) expires next year -- as long as they continued to fulfil their obligations.

One way for the ARU to encourage a state to adopt private ownership of its Super rugby licence would be to withhold part, or all, of the $4.3million grant the national governing body gives to the states each year.

The state could keep the Super licence, but it would have to find a way to fund the team on its own.

It is unlikely the ARU would single out an individual state in this way. A new federalism deal is almost certain to be negotiated with all of the states at the one time.

Whatever happens, there will be changes in Queensland, but the prospect of private ownership offers a new way forward for the Reds -- an opportunity to get ahead of the game instead of always chasing it.

http://www.theaustralian.news.com.au...015651,00.html

[beige]

Opinion piece dressed up as news?

[GIGS20]

Yeah probably, but it's surely a point of at least watercooler discussion at the ARU. I think the private ownership model could do a lot to help Qld (tic & TOCC, please correct any errors, I don't know the inside of Qld rugby too well) from what I hear people saying the state has a problem with administration, old boys networks, people feathering their own nests......all the stuff that usually accompanies an amateur organisation which hasn't transitioned into the professional era. If a private investor takes over, they will insist on solid business practices and the administration, marketing and operation of the team WILL be slick as greased owl shit. Private organisations can't afford to buy sporting teams unless they're successful. The rub will be in the attitude of the investor. I look at sporting competitions around the World which attract private owners (NFL, EPL, Top14 etc) and there seems to be a definite haves and haves not still. I know NFL best so I'll couch my comments in reference to that.

The Seattle Seahawks are owned by Bill Gates, he's a smooth operator, and has bunches of cash, yet they don't perform highly in general. Why is that?

The Green Bay Packers is owned by a private consotium (Green Bay Packers inc.) made up of member shareholders and it would be fair to say is historically better performed than the Seahawks, Why?

Private investors aren't necessarily interested in winning trophies, they're interested in making money. The Reds will definately turn around the losses they're making if a private investor took over the franchise, but would they win a title, or even perform better? not necessarily. John O'Neill is thinking like a CEO here and not like a rugby fan. If the investor is not selected carefully to be a person who believes the best way to turn a profit is regular finals appearances, then the Reds will not only continue to perform poorly, that poor performance will be consolidated..............that won't be good!

[Thequeerone]

Whatever needs to happen to give the Reds a decent chance needs to happen now - the messing around that is there at the moment is not helping the players or the fans.

More Rugby please and less politics

[zimeric]

The Seattle Seahawks are owned by Bill Gates, he's a smooth operator, and has bunches of cash, yet they don't perform highly in general. Why is that?

thats because its so cold in Seattle most of the time that all the players joints have siezed up

[normie]

thats because its so cold in Seattle most of the time that all the players joints have siezed up

I'm sure Bill has a team working on software for the seized up joints...

[TOCC]

Yeah probably, but it's surely a point of at least watercooler discussion at the ARU. I think the private ownership model could do a lot to help Qld (tic & TOCC, please correct any errors, I don't know the inside of Qld rugby too well) from what I hear people saying the state has a problem with administration, old boys networks, people feathering their own nests......all the stuff that usually accompanies an amateur organisation which hasn't transitioned into the professional era. If a private investor takes over, they will insist on solid business practices and the administration, marketing and operation of the team WILL be slick as greased owl shit. Private organisations can't afford to buy sporting teams unless they're successful. The rub will be in the attitude of the investor. I look at sporting competitions around the World which attract private owners (NFL, EPL, Top14 etc) and there seems to be a definite haves and haves not still. I know NFL best so I'll couch my comments in reference to that.

The Seattle Seahawks are owned by Bill Gates, he's a smooth operator, and has bunches of cash, yet they don't perform highly in general. Why is that?

The Green Bay Packers is owned by a private consotium (Green Bay Packers inc.) made up of member shareholders and it would be fair to say is historically better performed than the Seahawks, Why?

Private investors aren't necessarily interested in winning trophies, they're interested in making money. The Reds will definately turn around the losses they're making if a private investor took over the franchise, but would they win a title, or even perform better? not necessarily. John O'Neill is thinking like a CEO here and not like a rugby fan. If the investor is not selected carefully to be a person who believes the best way to turn a profit is regular finals appearances, then the Reds will not only continue to perform poorly, that poor performance will be consolidated..............that won't be good!

yeah pretty much sums it up, i suppose the only saving grace is if the private investor is willing to invest at a loss.

Alternatively there some other cases here in Australia like the Brisbane Broncos who are a publicly listed company with News Corp been the majority share holder, they perform fairly efficiently financially and get the results on field as well.

[Sheikh]

Well firstly the Seahawks are owned by Paul Allen, not Bill Gates (Allen & Gates co-founded Microsoft). Allen's owned the Seahawks for 12 years and in that time they've won their division five times, so they're doing alright at the moment. The Packers have been good in the past (60's), but recently they've been average. However, you're right that the Packers head office makes a better job of running a team than, say the Cincinatti Bengals.

Back on topic:
A privately run organisation may be less inclined to be an old-boys network than the Reds currently appears to be, but that isn't guaranteed. What's important is the organisation employs the right people and then trusts them to produce results. It may not happen overnight, but if there's a plan and the team's improving then there shouldn't be knee-jerk reactions by the bosses, which is what's appeared to happen with the Reds.