John O'Neill strides to revolution's beat
Bret Harris | July 22, 2009
Article from: The Australian
HAVING averted a civil war with the states, ARU chief executive John O'Neill will continue to march down the revolutionary road as he seeks to rebuild Australian rugby.
O'Neill faced a potential conflict with the states at the recent "crisis meeting" of chairmen and CEOs in Sydney over concerns they would have to relinquish their Super rugby licences at the expiry of the SANZAR broadcast deal next year.
The states had heard that they would have to compete in a bidding process with rival organisations to reclaim their licences, but O'Neill assured them that this was not the case. However, the bidding process, which will determine the 15th team in the expanded Super rugby competition from 2011, could still affect the future of the four existing Super sides -- the Brumbies, Force, Reds and Waratahs.
O'Neill has stated publicly that the expansion team will be operated under a new ownership model, moving away from the traditional state-run team to a privately operated franchise, ultimately controlled by the ARU.
It is part of O'Neill's vision to franchise Australia's Super rugby teams. During his first term as ARU chief executive between 1995 and 2003, O'Neill was opposed to private ownership because he did not want the game "hijacked", but he experienced a Road to Damascus conversion on the issue while setting up the A-League for Football Federation Australia.
On determining the financial viability of the new national soccer competition, O'Neill reached the conclusion he would have to attract significant investment from private equity owners.
O'Neill wanted to find a model that would give the A-League the best chance of success, while minimising the financial risk.
There is little doubt O'Neill is looking to apply a similar model to Super rugby, which would let the ARU reduce its level of funding ($17.2 million a year) to the states, and the expansion team will give him the first chance to introduce the concept.
Expressions of interest to be the 15th team close at 5pm today and are expected to come from Melbourne, Gold Coast, central coast, western Sydney and even the Eastern Cape in South Africa. If an applicant's proposed ownership structure does not include significant private equity, you can safely assume it will not be welcomed with open arms at the ARU, which will recommend its preferred bids to SANZAR by September 18.
A private consortium of Gold Coast businessmen, including O'Neill's close friend and former ARU director Terry Jackman, appeared to have the inside running for the new licence just several weeks ago. But the Queensland Rugby Union was in uproar over the prospect of having a rival 40 minutes down the highway and support for the Gold Coast seems to be fading.
So Melbourne has re-emerged as the logical location, but the process is expected to be complicated by having two competing bids from the Victorian capital -- the Victorian Rugby Union and a private consortium involving A-League club, Melbourne Victory, headed by Geoff Lord.
If O'Neill's experience in soccer is any guide, neither the VRU nor the Victory will own the Melbourne team. When awarding the licence for the Sydney A-League team, O'Neill rejected bids from Eastern Suburbs Leagues Club and Soccer NSW.
O'Neill did not want a rugby league club owning a soccer club and had concerns about a state federation owning a franchise for financial reasons. But that would not necessarily preclude the VRU or the Victory being involved in the organisational structure of a team which is privately owned.
The ARU could leverage the VRU and the Victory to raise as much private equity as possible or the rivals may join forces in a combined bid, which would probably receive more support from the Victorian government.
The VRU, which has made a coup by appointing former VFL chief executive Ross Oakley to its board, would help the new team develop relations with grassroots rugby in Melbourne, while the Victory could share operational costs with the rugby organisation.
If they cannot work together, the one that is privately owned and raises the most capital is likely to be the winner.
O'Neill's quiet revolution could be the lasting legacy of his second term in office.
http://www.theaustralian.news.com.au...015651,00.html
