Rugby Australia on $28m tightrope as Israel Folau fights back

The latest Israel Folau controversy has left Rugby Australia in a precarious position, with major sponsors closely monitoring the ongoing saga.

Rugby Australia has reportedly just opened discussions to extend its naming rights sponsorship with Qantas.

But according to a report by The Australian, the airline was "making threats" to RA last year about the first Folau outburst, making the current discussions a highly charged situation.

If RA were to lose Qantas and its other major sponsors, they "would be poorer to the extent of 28.2 million" (about 25 per cent of its total annual revenue), according to the report.

Qantas have been vocal advocates of same-sex marriage in Australia and its chief executive Alan Joyce is openly gay.

There is no suggestion that Qantas or any other major sponsors are unhappy with the way RA has handled the latest Folau controversy.

Before RA issued Folau with a breach notice for his anti-gay social media post, Qantas released a statement saying: "These comments are really disappointing and clearly don't reflect the spirit of inclusion and diversity that we support.

"We are pleased to see Rugby Australia's condemnation of the comments and will await the outcome of their review."

RA said today that Folau has requested a Code of Conduct hearing over his possible dismissal for making anti-gay comments on social media.

Folau responded to Rugby Australia's breach notice issued to him on Monday in relation to his Instagram post on April 10 when he made references to homosexuals going to hell unless they repented.

The 30-year-old had made similar posts last year and was warned but not sanctioned.

Rugby Australia said it will make arrangements with the Rugby Union Players' Association to help organise the Code of Conduct hearing.

Rugby Australia said last week it plans to terminate Folau's contract because of the comments.

"Israel has responded formally today to request a Code of Conduct hearing which, under the circumstances, was not an unexpected outcome," Rugby Australia chief executive Raelene Castle said.

"We will now work to confirm a date for the hearing as soon as possible ... and make no further comment on the matter."

- with AP