NZ Rugby and Rugby Australia are again locked in a battle of wills to find a long-term solution for Super Rugby. Photo / Photosport
NZ Rugby and Rugby Australia are again locked in a battle of wills to find a long-term solution for Super Rugby. Photo / Photosport
OPINION:
Back in 2020, when New Zealand Rugby tried to pull off a Super Rugby heist, unilaterally declaring ownership of the competition and telling Australia they could apply for a maximum of three licenses, it wasn't the worst idea the national body ever had.
The execution was horrible, the timingwrong and the tone unacceptable. Super Rugby wasn't New Zealand's to take, they had no mandate to be offering licences they didn't own, and Rugby Australia, despite being guilty of some political shenanigans over the years, had the right to be treated as a trusted and valued partner.
But what got missed in the ensuing carnage that came from this attempted smash and grab raid by NZR, is that their core argument was right, that for Super Rugby to have a sustainable future, Australia couldn't have five teams.
Two years on and again, NZR and RA are locked in a battle of wills to find a long-term solution for Super Rugby – one to which both parties must agree has high-performance and commercial longevity and delivers a fair and sustainable split of broadcast revenue.
The problem that seemingly has to be overcome is that New Zealand struck a supremely good broadcast deal worth about $100 million-a-year, while Australia stuffed up, rejected an improved offer of $57m-a-year from incumbent rights holder Fox Tel, and had to settle for a $28m-a-year package with Channel Nine.
These respective deals were agreed under terms where there was no obligation for the revenue to be shared, but in the wake of Super Rugby Pacific being formed and RA and NZR once again so heavily dependent on one another, both want to revert to a pooled income model for 2024 and beyond.
The inequity in their respective broadcast contrasts is clearly going to require some major compromise to be reached, but even if, and presumably when, agreement is reached on how to redistribute Super Rugby's TV cash, this may not be the victory that it will inevitably be presented as.
Throwing more money at Australia will only alleviate their financial pain for a short period. It will pay a few bills and buy a few players, but how long before the accounts are back in the red and the hand is out looking for more cash?
Probably two years, maybe three, because the fundamental problem with the rugby set up in Australia is not the inequity in broadcast income, but the unsustainably high-cost base with which it continues to burden itself by insisting on having five Super Rugby teams.
Australia can't afford to run five teams and it certainly doesn't have the player base to populate five teams and its commercial hubris has proven to be its high-performance nemesis.
If Super Rugby wants to find its path to long-term sustainability, then it needs to be brave enough to chop the Melbourne Rebels.
Ethan Blackadder of the Crusaders in action against the Melbourne Rebels. Photo / Photosport
There simply isn't enough broadcast income, no matter how it is distributed, to justify why the Australians are persevering with a team that has built little to no rapport with Melburnians, is stressing the overall balance sheet of professional Rugby in Australasia, and diluting the ability of the other four teams across the Tasman to recruit and retain the players they need to be competitive.
Chopping the Rebels would be an immediate way to strengthen the quality of the other Australian sides. It would not only flood the market with 35 or so seasoned professionals, it would also alleviate the wage inflation being felt.
What seems to often be missed is the natural economics of supply and demand and one of the factors that has crippled the game financially across the Tasman is the exponential rise in player costs caused by expanding their Super Rugby presence.
The rise has been driven not just by the fact they have had to offer more contracts, but by the ferocity of competition for talent which has seen teams outbid each other for the best players.
Back when Australia had just three teams, it was rare for players to move clubs. But since they have had five, look how often their big-name stars jump from one club to the other – all because they can command pay hikes given the relative paucity of quality.
Drop the Rebels and watch wage inflation go down, and the ability of the Reds, Waratahs, Force and Brumbies to compete, go up.
A more competitive Super Rugby with a lower cost base will drive better financial returns to be re-invested to make Super Rugby yet more competitive.
The vicious cycle will become virtuous and everyone might lament that we didn't see the merit of this when it was buried in NZR's 2020 powerplay.
