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Thread: ARU may be forced to bail out battling Brumbies

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    ARU may be forced to bail out battling Brumbies

    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

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    Git's and co saw the writing on the wall.

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    Muddie will bail them out!

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    So will they be called the ARU ACT Brumbies?

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    Immortal Contributor jono's Avatar
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    Dont the reds also now have 2 titles?
    Posted via Mobile Device

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    (formerly known as Coach) Your Humble Servant Darren's Avatar
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    Reds have 1994, 1995 and 2011 - the first 2 were pre professional era

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    Veteran Contributor JediKnight's Avatar
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    In breaking news, it's been announced that Huawei are to become personal sponsors of Digby (you can trust me) Ioane.

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    Immortal Contributor shasta's Avatar
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    Quote Originally Posted by brokendown gunfighter View Post
    Muddie will bail them out!
    In breaking news an Australian muskipper has had a massive heart attack under a large steel structure about 288km north east of Canberra. He was last seen being whisked away to intensive care muttering "I'm a mushroom, I'm a mushroom"

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    Legend Contributor slomo's Avatar
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    its only the brumbies........ does any one really care???..............

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    Legend Contributor fulvio sammut's Avatar
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    That Force Levy and the Adopt a Force Star program we have here could easily be adapted to thr Brumbies circumstances and save the ARU a lot of money.

    I wonder why that was not the first approach to the problem instead of a bailout?

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    Last edited by fulvio sammut; 26-12-11 at 17:07.

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    I get the impression that the East Coast way is; first sign of a problem - go cap in hand to the ARU for a bailout.

    the West Coast way would appear to be is to make sure that everything is self sustaining and or self supporting.

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    Veteran Sheikh's Avatar
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    Perhaps the west coast know that if they did you cap in hand to the ARU they'd get short shrift

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    So the NSWRU, the QRU, the ARU and now the ACTRU all in the shit financially in the last couple of years?
    Good job we have super JO'N at the wheel...

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    Perhaps its fall out from the Govt's decision to not award Huawei the NBN contract. The Brumbies are one of the unlucky fallouts. Many will blame Fagan and the board but this was out of their hands. They had done well to attract a sponsor of this size in the first place.
    Not great news for them just before the start of the season, but they will be ok. It's time for some of the affluent rugby supporters to come to the party.

    "Brumbies chief executive Andrew Fagan allayed any fears the short-term cash shortfall would affect the club's players, coaches or support staff.

    ''Everything's already funded, so nothing changes in that regard,'' Fagan said.

    ''There's zero impact on the high-performance program and the sponsorship is just irrelevant to it. It's a really simple formula - either we'll get it replaced or we'll get a loan.

    ''We'll enter into arrangements with the [Australian Rugby Union] if we fall short.''

    Despite recording a loss of $8million last year, the ARU is likely to assist the Brumbies given it has previously bailed out the NSW Waratahs and the Queensland Reds."

    http://www.canberratimes.com.au/news...n/2404198.aspx

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    Veteran mudskipper's Avatar
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    Quote Originally Posted by shasta View Post
    In breaking news an Australian muskipper has had a massive heart attack under a large steel structure about 288km north east of Canberra. He was last seen being whisked away to intensive care muttering "I'm a mushroom, I'm a mushroom"
    very funny... but who's going to create all those wonderful force players witout the Brumbies... .... but Really if the Huawein chinese IT company doesnt want in to a world rugby brand than #--- them... Whats the point, CA was a great sponsor for 13 years... Huawein has the brand recognition of a chinese calendar in Iceland... The Pony club can go it alone, and pick up a key sponsor later... the brums have other good sponsors who want to support ACT and Australian rugby...

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