Andrew Forrest hits back at Australian Rugby Union claims about Western Force axeing

[lou]

This is what I have:
from the notes in the ARU annual reports in 2015:
i. Super Rugby grants increased by $1.4m due to increased financial support provided for MRRU
ii. $5m financial assistance to MR. Originally provided as a long term loan, subsequently forgiven under the arrangements of the sale of the entity 30 June 2015. - total $6.4 m GIVEN to Andrew Cox
from the notes in the ARU annual reports in 2016:
Super Rugby funding to Rebels includes $2.6 m of special funding as part of the external sale agreement - GIVEN to Andrew Cox
These payments were over and above the normal ARU player payments and were given - just because he asked for them.
the only reference to extra SR funding to WA is in the ARU annual reports for 2016: SR funding to WA includes $3.7 m relating to commercial operations from 1 Aug 2016 - nothing noted in the 2015 reports

[Alison]

This is a cut and paste from my "unsustainable" article Lou (first post in the "unsustainable" thread):

"And that brings us to 2016. As we already know, the ARU entered into an alliance agreement with the Western Force in August of 2016, under which the ARU bought the Force Super Rugby licence and its intellectual property for $3.7m. It also took on the Western Force players and staff as employees of the ARU. In addition to the $3.7m consideration paid for the Force licence and IP, the 2016 accounts show us that the ARU provided a further $3.6m in grant funding to the Western Force Super Rugby organisation, making a total amount in “grant” funding of $7.3m to the Force in 2016."

See also:
Note xii in Table 1 in that thread
Note 8 to Table 4 in that thread
Note 26 to Table 4 (which says the remuneration & Super for Force players & staff from 1 Aug - 31 Dec 2016 was $4.787mill and was separate from the $3.7mill for the IP and licence and the other $3.6mill for that year's grant.)

[Alison]

Lou, if you have the stamina, my piece in the first post of the "unsustainable" thread plus the tables are what I gleaned from the ARU accounts filed with ASIC for the years 2010 to 2016.

[lou]

The ARU is so shifty it is hard to make sense of these figures. Suffice to say, that on one hand, the ARU hand over $13 m in forgiven loans to the MR and then continue to pay the new owner $6-7 m because he asked for it and on the other hand , the ARU purchase the WF IP and Licence - no gifts, no loans, no nothing.

[Alison]

They are artful dodgers aren't they?!!

[John Edwards]

They are artful dodgers aren't they?!!

They are certainly not checking in the rear view mirror. Key take outs for me from the ARU response to Andrew Forrest’s accusation are:

“Rugby WA provided several opportunities to put its best business case forward”
• After the Clarke/Day “axe” the Force presentation in Perth we requested the details behind the summarised “scenarios” they modelled that determined why they were leaning towards axing the Force. This was never provided (the infamous “Spreadsheet”)
• They also did not complete the “rugby program” comparison presentation at the meeting preferring to cut to the chase and tell us that the decision was overwhelmingly “Financial” and we “did quite well” on the non-financial metrics.
• We did not put forward any case immediately after that meeting as we were never given the Terms of Reference by which we were being measured. We also felt that as they effectively owned the Club whatever we put forward would be discredited.
• We also believed that we had a robust Alliance Agreement in place and that we were “partners”
• Down the track a little we prepared a range of scenarios for the ARU based on various inputs such as:
o Historical financial and match day data
o Own the Force funding outcomes
o Cost to repurchase the license ($800k)
o Road Safety sponsorship probabilities
o Team success/Bums on seats
o Other sponsorship/ corporates
• This review produced detailed high ,low and probable business outcomes around the buy- back opportunity in the Alliance Agreement and these were presented to the ARU in much finer detail than anything they provided to us.
• Following this and in response to letters from the ARU terminating our Alliance (pre Arbitration) and at their request, we presented an update of how we saw the Financial stability of the Force post 2017 in a buy back outcome .This was thrown back in our face on the basis that:
o We have not fully funded the Own the Force campaign (Notwithstanding that the impediment to this was the ARU themselves)
o The Government had not signed the Road Safety sponsorship extension (true but et Government had given strong enough indications and we had/have a backup plan)
o The Government was putting conditions on the $4mm Bledisloe advance that they were not prepared to accept.(What they wanted was an option on future unallocated Internationals).
o Andrew Forrest’s Own the Force underwriting had no guarantees and basically they did not rate him or his promise.
• Showing extreme patience we answered each of their criticisms in detail and still they batted us out of the park stating that the “Offer was not in a Form that could be accepted”
• All of the above plus a multitude of calls and emails in the “Good Faith” demanded under the terms of the Alliance agreement happened BEFORE the Arbitrator handed his pro ARU decision down . Each letter asked them to engage with us/Andrew and work out a win /win solution. Clearly we tried but they were just not prepared to engage. Minds were made up.
• Of course the big question is , over the course of this debacle were the Rebels at any time asked to put forward THEIR Business Case and I’d suggest that answer is no because they were never really at risk and Clarke had told them they were safe (remember that was in the press too and Cox was quoted).

“Once the VRU bought back the Rebels license Clyne said the ARU’s Hands were tied”
You all know that the “bait and switch” of Cox selling the Company. Transferring the License happened after the ARU reacted to press rumours and stated categorically that “the license could not be transferred without the ARU’s written approval”. When it actually happened a few days later for the princely price of $1 there was again a public statement by the ARU that this was not legal and that they would be immediately and urgently looking into it. At that point Andrew called Clyne and suggested to him that this was his opportunity to revoke the Rebels license and get the 4 team outcome that the ARU so desperately wanted. For a brief moment we thought we were safe and had won . So what happened after that:
• It seems that they pretended to look into it but like all these events this was swept under the carpet and never mentioned again.
• The next step was the so called Vic Government support to the tune of $20mm which is based arounf revenue from International fixtures and which still remains in the shadows and no one seems to be really owning up to the question of who is actually paying and how much:
o If it’s the Vic Government are they effectively paying a higher price than $5mm for a Bledisloe (the figure WA is paying) and if so are they paying the incremental cost to the VRU or the ARU?
o Who is paying the VRU? If it is the Government then one would think that this is rather unprecedented and the other codes in Melbourne might be asking for their share.
o My theory is that the Vic Government is paying the standard $5mm to the ARU and the ARU is paying the 20% to the Rebels which is effectively reducing the amount that they can distribute to Grass Roots and/or the other States and once again Melbourne is getting a handout no one else is getting. I could be wrong but it could certainly be “managed” in the ARU financials that way.
o I stand by my theory that for the Rebels to survive the Force must die. They need our Coach our players and more backdoor funds from the ARU . If the Rebels fail financially again the ARU are alone in the crosshairs.

Pulver and Clyne saying “Sadly Andrew came too late”

Andrew is answering this himself but I would imagine it is not at all too late from a practical and planning purpose. Sanzaar will no doubt have a number of Super 15 Draw models including:
• Force are out
• Force are in Sunwolves are out
• No one is out 16 team tournament
No one has booked a flight and no city has revoked its stadium deal. I think we all know that there is NO Contractual agreement between SANZAAR and the ARU to cut an Australian Team and other than a massive loss of face (which they will get anyway if we win the appeal) there really isn’t that much at stake for the ARU.

It’s very clear that this man is a poor liar and has morphed into one of a Pathological stature. He has not even been clever enough to check his tracks, even the fresh one. That’s what liars do they only have their own form of truth.
Cheers John

[John Edwards]

I have been looking at this from a different angle. And I think that while these questions are important we have missed one very important point.

The Intellectual Property Rights.

1. Who first came up with the idea to go after the Western Force IPR?

2. Was there legal advice that said that buying owning one of the Teams IPR they could then legally terminate that team.

3. Why wasnt the IPR's of the Melbourne Rebels or the Brumbies acquired?

The IPR's were acquired 2 years ago. The plan to cull a team must have been in place prior to that.

What ever the outcome of Supreme Court hearing later this week (or next week). We must fight for the Western Force IPR's
to be given/purchased back.

Otherwise what ever we do next. That is continue to compete in Super Rugby or compete in the Forrest Cup. WE will continue to be tied to our owners - The ARU.

Remember that this all started last year with our Board going to the ARU to ask for a loan. Something every other Franchise had done at least once and in most cases for a higher amount. They came back to us with a "better" idea which was the Alliance. We liked it because it fixed our short liquidity issues and gave us a buy back option (which we started work on immediately) but most importantly it fixed a long term problem of talent equalisation and got them in our tent. Ironically we may not have gotten Billy or even our 2 home grown boys Curtis and Chance without the ARU finally giving us a "hand".
This "Alliance" model was a model the ARU wanted to achieve for all franchises and we were to be the test pilot. Clearly despite rigorous legal work by our team on the agreement a word or 2 allowed them to pounce when they needed to. I will never believe it was a set up from the start but todays revelations would tell you that the ARU certainly put the document to the test when they decided to look at the options to cut a team. Clearly the complete background ,the intent or the marvellous fanfare with which Pulver announced the deal was trampled into the NSW mud when their vision for " making Rugby accessible to all Australians" narrowed by a few thousand kilometres.

[sittingbison]

The ARU is so shifty it is hard to make sense of these figures. Suffice to say, that on one hand, the ARU hand over $13 m in forgiven loans to the MR and then continue to pay the new owner $6-7 m because he asked for it and on the other hand , the ARU purchase the WF IP and Licence - no gifts, no loans, no nothing.

lou, this has been a major sticking point all along

[Massimo]

They are certainly not checking in the rear view mirror. Key take outs for me from the ARU response to Andrew Forrest’s accusation are:

“Rugby WA provided several opportunities to put its best business case forward”
• After the Clarke/Day “axe” the Force presentation in Perth we requested the details behind the summarised “scenarios” they modelled that determined why they were leaning towards axing the Force. This was never provided (the infamous “Spreadsheet”)
• They also did not complete the “rugby program” comparison presentation at the meeting preferring to cut to the chase and tell us that the decision was overwhelmingly “Financial” and we “did quite well” on the non-financial metrics.
• We did not put forward any case immediately after that meeting as we were never given the Terms of Reference by which we were being measured. We also felt that as they effectively owned the Club whatever we put forward would be discredited.
• We also believed that we had a robust Alliance Agreement in place and that we were “partners”
• Down the track a little we prepared a range of scenarios for the ARU based on various inputs such as:
o Historical financial and match day data
o Own the Force funding outcomes
o Cost to repurchase the license ($800k)
o Road Safety sponsorship probabilities
o Team success/Bums on seats
o Other sponsorship/ corporates
• This review produced detailed high ,low and probable business outcomes around the buy- back opportunity in the Alliance Agreement and these were presented to the ARU in much finer detail than anything they provided to us.
• Following this and in response to letters from the ARU terminating our Alliance (pre Arbitration) and at their request, we presented an update of how we saw the Financial stability of the Force post 2017 in a buy back outcome .This was thrown back in our face on the basis that:
o We have not fully funded the Own the Force campaign (Notwithstanding that the impediment to this was the ARU themselves)
o The Government had not signed the Road Safety sponsorship extension (true but et Government had given strong enough indications and we had/have a backup plan)
o The Government was putting conditions on the $4mm Bledisloe advance that they were not prepared to accept.(What they wanted was an option on future unallocated Internationals).
o Andrew Forrest’s Own the Force underwriting had no guarantees and basically they did not rate him or his promise.
• Showing extreme patience we answered each of their criticisms in detail and still they batted us out of the park stating that the “Offer was not in a Form that could be accepted”
• All of the above plus a multitude of calls and emails in the “Good Faith” demanded under the terms of the Alliance agreement happened BEFORE the Arbitrator handed his pro ARU decision down . Each letter asked them to engage with us/Andrew and work out a win /win solution. Clearly we tried but they were just not prepared to engage. Minds were made up.
• Of course the big question is , over the course of this debacle were the Rebels at any time asked to put forward THEIR Business Case and I’d suggest that answer is no because they were never really at risk and Clarke had told them they were safe (remember that was in the press too and Cox was quoted).

“Once the VRU bought back the Rebels license Clyne said the ARU’s Hands were tied”
You all know that the “bait and switch” of Cox selling the Company. Transferring the License happened after the ARU reacted to press rumours and stated categorically that “the license could not be transferred without the ARU’s written approval”. When it actually happened a few days later for the princely price of $1 there was again a public statement by the ARU that this was not legal and that they would be immediately and urgently looking into it. At that point Andrew called Clyne and suggested to him that this was his opportunity to revoke the Rebels license and get the 4 team outcome that the ARU so desperately wanted. For a brief moment we thought we were safe and had won . So what happened after that:
• It seems that they pretended to look into it but like all these events this was swept under the carpet and never mentioned again.
• The next step was the so called Vic Government support to the tune of $20mm which is based arounf revenue from International fixtures and which still remains in the shadows and no one seems to be really owning up to the question of who is actually paying and how much:
o If it’s the Vic Government are they effectively paying a higher price than $5mm for a Bledisloe (the figure WA is paying) and if so are they paying the incremental cost to the VRU or the ARU?
o Who is paying the VRU? If it is the Government then one would think that this is rather unprecedented and the other codes in Melbourne might be asking for their share.
o My theory is that the Vic Government is paying the standard $5mm to the ARU and the ARU is paying the 20% to the Rebels which is effectively reducing the amount that they can distribute to Grass Roots and/or the other States and once again Melbourne is getting a handout no one else is getting. I could be wrong but it could certainly be “managed” in the ARU financials that way.
o I stand by my theory that for the Rebels to survive the Force must die. They need our Coach our players and more backdoor funds from the ARU . If the Rebels fail financially again the ARU are alone in the crosshairs.

Pulver and Clyne saying “Sadly Andrew came too late”

Andrew is answering this himself but I would imagine it is not at all too late from a practical and planning purpose. Sanzaar will no doubt have a number of Super 15 Draw models including:
• Force are out
• Force are in Sunwolves are out
• No one is out 16 team tournament
No one has booked a flight and no city has revoked its stadium deal. I think we all know that there is NO Contractual agreement between SANZAAR and the ARU to cut an Australian Team and other than a massive loss of face (which they will get anyway if we win the appeal) there really isn’t that much at stake for the ARU.

It’s very clear that this man is a poor liar and has morphed into one of a Pathological stature. He has not even been clever enough to check his tracks, even the fresh one. That’s what liars do they only have their own form of truth.
Cheers John

Thank you John, your analysis is a masterpiece and gives me and my rugby kids lots of hope that we will manage to Save the Force!
Massimo-Neptune

[Alison]

John, I thought the Agreement was drawn up by our lawyers, not theirs? In which case, how did they outsmart us with those one or two key words?

Could those key words be construed as them deliberately acting in bad faith?

Does this mean our appeal is dead in the water?

[John Edwards]

John, I thought the Agreement was drawn up by our lawyers, not theirs? In which case, how did they outsmart us with those one or two key words?

Could those key words be construed as them deliberately acting in bad faith?

Does this mean our appeal is dead in the water?

Alison yes we did draft it but several turns of the document saw them add their own revisions. Lavan would have all the "marked up "versions which would show each iteration. I'll take a look at these and see if there was anything a little deliberate that tripped us up in the first instance.
Meanwhile we remain very confident we will get there in the courtroom this time with what we have. Unbelievable support from everyone and huge belief by our players and staff. God I hope we can get this done soon for them.

[shasta]

It’s very clear that this man is a poor liar and has morphed into one of a Pathological stature. He has not even been clever enough to check his tracks, even the fresh one. That’s what liars do they only have their own form of truth.
Cheers John

Thankyou for your frank summary, John. Really appreciated. On that last point, I think "delusional" might even be appropriate after the claim the the decision on "exiting" the Force was made on the 11th of August. Nobody will believe that after all the revelations that have come. I think he is looking more isolated by the day. Most of the commentary out of the East makes it seem that way, at least.

[Darkness]

If those bastards show their faces in Perth next week I suggest someone makes the old "69" call and pile in on them and beat the truth outa them. Make them squeal like the pigs they are.

From Cheika's comments today, all these aru wankers think we'll get over it and get back on the wallaby train.

Noddyland stuff.

[Usebeo]

I have just pinged the below off to Greg Hunt (Sports Minister) copying all the WA MPs, My dates are a bit rusty....eek. I think its worth encouraging people to mail him. The evidence today is compelling and the Federal Government fund fox and ARU for various things.

His email is Greg.Hunt.MP@aph.gov.au, Generic but if enough send then it will make a statement

Dear Minister Hunt

As the Minister representing sport in this country, I call on you to step in to avert the growing crisis that is surrounding the great game of rugby union following the revelations this morning that the ARU has bullied the players and staff of the Western Force and lied its way through the process of cutting a team from Super Rugby……which we now know was always going to be the Western Force.

I ask you to put aside the fact that you are from a State that still has a Super Rugby team and recognise that the people of Western Australia, the rugby community young and old, amateur and professional players alike, volunteers, fans and a growing number of the wider rugby community have been unfairly dudded by this unjust and grubby decision which brings the game into disrepute. This has been a process of discrimination and exclusion against the people of Western Australia.

While the ARU clearly doesn’t care about Western Australians, we care about sport and many of us are passionate about rugby in the State and the Western Force. More importantly though we believe in justice, governance and that sporting governing bodies should be accountable for the way they act. The ARU is the custodian of the game in this country promoting it in their strategic direction as ‘a game for all’……All but Western Australians it looks like. Their handling of this saga has been nothing short of a disgrace and disrespectful to our state.

To try and arrive at an agreeable outcome I ask you to suspend (in part or in full) Government funding to the ARU and to Fox Sports (to support Rugby) with immediate effect until the Force is reinstated into Super Rugby. This is in light of the following facts:

1. The ARU systematically underfunded the Force when compared to the Melbourne Rebels to the tune of $12million over the life of the club – this is more when you aggregate the amounts out over the life span of the Rebels.

2. The ARU agreed to buy the Force’s IP rights, in good faith and an Alliance agreement was formed between both parties.

3. It is now clear that this agreement was in anything but ‘good faith’. The ARU knew at that time (Feb 18 2016) that it wanted to go back to four super rugby teams (the evidence is that they knew before they introduced the Rebels to Super Rugby that five was not the optimal number).

4. The purchase of the Force’s IP rights meant that the ARU had a team that legally they can terminate or ‘discontinue the licence’ of – albeit that this agreement was ‘in good faith’

5. After SANZAR announces it wants to move back to a Super 15 tournament, the ARU volunteers to reduce its teams to four while a team from Japan is added at the expense of an Australian team.

6. The ARU announces that it will axe either the Rebels or the Force and they announce a process is in place to identify the unlucky club (for some reason the Brumbies are declared safe from the cull)

7. That process will take 48-72 hours according to their Chairman at the media conference (the question is how long would a proper process which includes independent management consultants take – not two or three days) leading us to believe that this has been orchestrated.

8. The charade begins: Clyne and Pulver announce that a number of ‘criteria’ will be used to make the final decision – no one has ever seen these criteria or the infamous spreadsheet that is referred to.

9. Rebels players and staff are given reassurances by the ARU that they won’t be cut during this time.

10. Three directors of the ARU directly involved in this process, resign or leave the ARU as part of the process (although one has popped back up working for the Rebels now)

11. A long process ensues bought on by the Force’s legal action to try and save the club including the ARU turning down an unprecedented $50million dollar investment offer from Andrew Forrest – an amount that could save rugby in Australia

12. It transpires that the ARU had legal advice saying that the risk of cutting the force was low, while the risk of cutting the Rebels and Brumbies was high. This advice was given to the board in February 2017 ensuring that they had predetermined the Force as the team to axe from the competition.

13. Rather than tell the truth from the outset, the ARU enters in to mass charade to try and save face but this swiftly develops into a web of lies and deceit massively impacting the health of players and staff from the force (and possible the Rebels as well) and the fans for that matter.

14. No word from the silent partners (other Super Rugby teams and RUPA as they eye off more $$ promised by the ARU)

15. No one from the ARU or its board come to Perth to confront the rugby community.

The events of the past five months are an indictment on the ARU and their ability to run the game of rugby. As sports minister you have the ability to influence what it happening. You can and you must act.

Minister, the ARU has proved itself to be gutless during this process, please prove to the people of WA that you aren’t by acting to protect our sporting interests.

Yours faithfully

[Markos2012]

If you do write to the Government remind them also of the five WA liberal seats that are already in jeopardy in WA as a result of eastern centric GST and Grants Commission policies. They are worried about that.