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Thread: Melbourne rugby franchise not so super

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    Legend Contributor blueandblack's Avatar
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    Melbourne rugby franchise not so super

    The new Melbourne Super 15 franchise is in disarray with investors pulling out after failing to agree to terms with the Australian Rugby Union over funding.

    Members of the VicSuper15 group, who were involved in the winning bid for the new licence in the expanded 2011 competition, have "ceased negotiations" with the ARU, according to spokesman Ray Evans.

    He said the group had European Cup-winning Australian coach Michael Cheika, who is currently with Irish side Leinster, lined up to coach Melbourne, and "possibly (Wallaby skipper) Rocky Elsom" but was unsure if that would now eventuate.
    Mining magnate Kevin Maloney, one of the main backers of the franchise, is among investors to walk away saying the operation isn't viable.

    The parties reached an impasse over funding, with the ARU unwilling to match an annual grant of $4.2m to the existing Australian Super sides.
    They initially offered $2.1m which was upped to $3m but members of VicSuper15 say it's insufficient.

    The Melbourne side was set to be the first privately-funded franchise in a departure from traditional state-owned Super rugby teams, however if the ARU runs the team it will put it in a position of conflict of interest with the other state-run sides.
    "They won't provide parity so we've basically said it's not commercial," Evans said.

    "They're going to set it up now and hope that somebody's going to pay for it and make money out of it, I don't know how they're going to make it work.
    "That's the major sticking point, that they weren't prepared to provide the same amount of TV rights as the other states."

    Another investor, media buyer Harold Mitchell, is also said to be disillusioned with the ARU offering but is attempting to continue negotiations.
    While the ARU will give the franchise a dispensation on the number of foreign players it can recruit, allowing up to 10, it's understood investors are concerned how they will pay for such players.

    They are also wary of other costs such as marketing a new rugby franchise in the AFL heartland.
    Evans said the ARU should look at the AFL, who are providing hefty financial and player concessions for the start-up of new franchises Gold Coast and Western Sydney.

    "The ARU are trying to get us to start it up without any start-up costs and at a reduced income stream," Evans said.
    Another VicSuper15 spokesman Travis Atkins said investors could be lured back if the ARU came to the table.

    "Starting up a new team obviously makes it important that there's enough funding to do it in terms of support from the governing body as well as private equity, it's a commercial venture not philanthropy," he said.
    "We want to move forward but under reasonable and rational terms."

    Joining the competition in 2011, the window of opportunity to recruit a top-level coach and first-class players is quickly closing.

    "We had a coach lined up, we had Michael Cheika lined up to come from Leinster and probably Rocky Elsom, I don't know what's going to happen now," Evans said.

    http://au.news.yahoo.com/thewest/spo...-not-so-super/

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    Sounds like they want it both ways.
    ARU to be the cash cow and then the VS15 to take the profits.

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    Veteran Sheikh's Avatar
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    Works for the banks, why not the Melbourne S15 team?

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    Senior Player tic's Avatar
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    This is just embarrasing for Australian Rugby.

    Well done John O'Neill....you are a massive banker!

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    Veteran TOCC's Avatar
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    before we go jumping up and down, take into consideration the fact that this could easily just be a ploy from the investors to get the ARU to raise there stake so they can make the organisation more profitable..

    Private equity was never going to be a easy task, the investors are hoping for the best potential return whilst the ARU is trying to cut costs, both of these are rather conflicting goals and therefore is going to cause friction.

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    You would have thought they would have read the "contract" before putting their hands up though surely TOCC?

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    Veteran Contributor The EnForcer's Avatar
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    Sounds like a whole bunch of BS. We have a group of private investors putting together a bid which is independantly reviewed and accepted then they decide that it is no longer viable. Even if it is a ploy by the franchise I think it stinks. This is the big danger of franchising out new and potentially marginal teams. They should have paid more attention to what happened in Scotland and sealed the deal prior to award.

    On a more positive note, hopefully it is more bluster than fact and it will settle down. With the economic outlook improving significantly at least sponsorship deals may come more easily.

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    Veteran TOCC's Avatar
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    Quote Originally Posted by Burgs View Post
    You would have thought they would have read the "contract" before putting their hands up though surely TOCC?
    i obviously dont know the full details, but from what the news reports indicate the exact criteria wasnt set out when they all put there bid for, this is because of a few factors but mainly because you dont want to restrict the ability of the new franchise to arrange there own funding structure.

    After reading articles like the one below, it looks more like Evans has gone out independently and said all this, Maloney and Mitchell are the major backers and if there still on board then it would seem like the bid is still a go.

    Evans also claimed the consortium's major backer, mining magnate Kevin Maloney, had walked away in disgust - effectively ensuring the ARU would have to take over the franchise.

    But that claim was disputed by Maloney yesterday. The Sydney-based businessman said he remained keen on investing approximately $2 million and taking a stake of about 20 per cent in the new franchise - likely to be called The Rebels. He described Evans as a ''minor player'' in the consortium.

    ''I'm not sure where he's coming from,'' Maloney said. ''As far as I know the ARU are still considering their options, negotiations are ongoing. My interest is there and my money is waiting.''

    The other major backer - media buyer Harold Mitchell - also remains involved and both men are continuing to negotiate with the ARU.

    http://www.brisbanetimes.com.au/rugb...1229-lit5.html

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    Legend Contributor brokendown gunfighter's Avatar
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    looks like a bit of grandstanding by this Evans fellow

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    ARU says no to Melbourne backer

    Peter Kogoy From: The Australian
    January 01, 2010 12:00AM

    THE Australian Rugby Union has frozen a $3 million line of credit to Melbourne's new Super 15 franchise as talks with potential financial backers collapsed.
    The Australian yesterday learned the amount of cash the club wants from the ARU and the preferred coaching candidate are the two major sticking points that have split the camps as the March deadline to have the club fully operational draws nearer.

    A leaked confidential memo dated December 21 and signed off by ARU deputy chief executive Matt Carroll details the code's major grievances with the franchise's interim ownership structure.

    The memo was sent to all key stakeholders on the VicSuper15 interim board and the ARU hierarchy including chief executive John O'Neill.

    The major gripe is the lack of financial parity with the four established provincial franchises.

    The ARU gives the Waratahs, Reds, Brumbies and Western Force $4.3m a year each.

    Talks between the two bodies had initially broken off in early December when the ARU refused to go any higher than the original offer of $2.1m.

    It then came back with an improved offer of $3m. It too was rejected.

    As for the naming of the inaugural coach and other key personnel, an ARU spokesman said last night those appointments would be up to the owners providing "they were in place".

    "Our only preference was that the successful coach be an Australian," he said.

    When pressed on whether former Queensland and Wallabies coach John Connolly would be considered for the job, the spokesman said: "No one has ever said the door has been closed on John Connolly. I repeat, the ARU will have no say in the appointment."

    Despite the breakdown in talks, the consortium's major backer, mining magnate Kevin Maloney, hasn't walked away. Nor has media buyer Harold Mitchell.

    But The Australian has learned that Carroll is refusing to deal with a third major backer Craig Dunn -- director of Melbourne-based Motor Trade Finance Company.

    The Melbourne group's preferred coaching candidate is understood to be Michael Cheika, the former Randwick player who won European honours coaching Leinster.

    Carroll's email to the warring factions reads in part: "The ARU will commence work establishing the new team, including the appointment of a project manager and initiate the recruitment process for a head coach.

    "Unless you advise otherwise, we (the ARU) will keep you appraised of these appointments and the planning process."

    The Carroll document also reveals the ARU has lost patience with the Melbourne group.

    "The preferred option of the ARU is to not run the team in Melbourne or to have any prospective ownership in the team especially in the long term," it read. "However, due to the breakdown in recent negotiations it was agreed that the less risky outcome at this point was for the ARU to proceed with the the appointment of a project manager as soon as possible."


    http://www.theaustralian.com.au/news...-1225815109074

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    Veteran mudskipper's Avatar
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    let him walk... If he doesn't see value he is the wrong investor... Melbourne will go ahead without him...

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    ARU have cocked up majorly regarding the marquee players deal. They offer the Melbourne team up to 10 but how the hell are the Melbournites suppose to afford 10?! Better to give each S14 team 3 + 1 development overseas player (subject to ARU approval) and force each S14 team to give up 2 Australian players to the Melbourne team in place of the two new marquees. The Force could easily give up a backrower and a centre in exchange for a winger and a hooker.

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    Immortal GIGS20's Avatar
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    Quote Originally Posted by James View Post
    ARU have cocked up majorly regarding the marquee players deal. They offer the Melbourne team up to 10 but how the hell are the Melbournites suppose to afford 10?! Better to give each S14 team 3 + 1 development overseas player (subject to ARU approval) and force each S14 team to give up 2 Australian players to the Melbourne team in place of the two new marquees. The Force could easily give up a backrower and a centre in exchange for a winger and a hooker.
    Your problem, James, is that you talk sense.......nobody in the ARU wants to hear that, they'd rather suffer under their delusions that they know what they're talking about and the way forward for Aussie rugby is buying NRL players and improving the standard of the Shute Shield.

    If you don't have something bloody ridiculous to say, try not saying anything at all.

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