Rugby Union

Brumbies dip into savings to cover loss

The ACT Brumbies will announce a loss of $1.07 million next week and have just $2 million remaining in their cash reserve after the multi-million dollar sale of their Griffith headquarters.

Brumbies chairman Sean Hammond talks about the Super Rugby club's financial situation.
Brumbies chairman Sean Hammond talks about the Super Rugby club's financial situation. Photo: Graham Tidy

The Brumbies have been forced to dip into their savings created by the $11.375 million sale of Griffith last year, with funds directed to clearing debt, investing $5 million in a new University of Canberra base and covering financial losses.

Disappointing crowd figures, a drop in sponsorship and corporate hospitality are testing the club's financial future, chairman Sean Hammond admitting they need to change their business to stop the bleeding.

The Brumbies are still searching for a naming-rights partner, worth almost $1 million in sponsorship, and are looking for their third chief executive in 12 months after Doug Edwards resigned.

The ACT government and cash-strapped Australian Rugby Union will struggle to provide significant financial assistance if the Brumbies can't find more revenue in the coming years.


The ACT government has redirected funds to support the $1 billion Mr Fluffy buy-back operations for homes with loose-fill asbestos, while the ARU has its own financial woes and is relying on a new broadcast deal in 2016 for an injection of cash.

But in a boost for the Brumbies, they are poised to become one of the first Super Rugby clubs with two female board members, with Datacom chief executive Lisa Thorburn to join the directors.

Hammond believes the Brumbies have a bright future, indicating only slight increases and tweaks are needed for the club to turn deficit into profit.

"We have a strong balance sheet with reserves following the sale of our Griffith site, but we are incurring operational losses and we are very aware that if we are not able to shift the business and generate profits, the reserves will be exhausted at some point in the future," Hammond said.

"If people want the Brumbies to survive, they've got to go to games. People don't need to be benevolent, but they need to be engaged. We only need little trends."

The Brumbies will report the million-dollar loss at the club's annual general meeting on Tuesday.

The Brumbies experienced "peak" sponsorship in 2013, coinciding with the team's rise into the Super Rugby grand final.

The Brumbies also moved their headquarters from Griffith to the University of Canberra this year and the deal covers rent at the Bruce campus for the next 30 years.

The Brumbies are one of three investors in the $16 million development at the university, with UC and the ACT government also contributing.

But setting up a temporary base at the AIS for three months longer than expected while the building was finished cost the Brumbies $100,000.

The Brumbies set up their financial future last year with $9 million of equity following the sale of Griffith.

They had hoped to set up a trust with the remaining $4 million after moving to the university and Hammond said that was still a priority.

But Hammond said the Brumbies were not in danger of becoming insolvent, despite being forced to dip into reserves to cover the unexpectedly high loss.

The Brumbies believe a five per cent increase in crowds, corporate hospitality and membership will help increase the business revenue to a healthy level.

"Our cash position moves every day and if we continue to incur losses we will eventually run out of reserves and these are our only reserves. We have about $2 million cash reserves.

"...If we have two more years where we lose $1 million, well that's the reserve. We're not talking about the Brumbies going under, that's just not on our radar. Our reserves are there, we're working to have a break-even in 2015 and achieve things for the longevity of the Brumbies."