Brumbies tip finance turnaround
Zack Holmes lines up the potential winning penalty goal attempt against the Reds in May, which could have seen the side make the finals. Photo: Colleen Petch
The ACT Brumbies lost more than $500,000 in the last financial year despite their on-field resurgence, but the Super Rugby club is forecasting an immediate $1.1 million turnaround next year.
In one of the biggest rebuilding years in the Brumbies' history, Huawei's last-minute decision to renege on a major sponsorship deal and new government probity policy on hospitality led to a second consecutive year of running at a loss.
The Brumbies initially faced a $1.1 million deficit when Huawei pulled out of a three-year deal 12 months ago. But with the University of Canberra signing on, an improved on-field performance and a boost in ticket sales meant the Brumbies limited their loss to $520,587.
Zack Holmes in consoled after his penalty miss on the bell against the Reds in May. Photo: Colleen Petch
In a extraordinary twist, had the Brumbies not stumbled at the last hurdle in the finals race, they would have avoided a financial loss with teams hosting play-off matches getting a $600,000 injection.
Brumbies chief executive Andrew Fagan has revealed the club is on track to turn that loss into a $548,000 profit in the next financial year with a turnaround in sponsorship, membership and a boost from a mid-week tour match against the British and Irish Lions.
Fagan detailed the club's financial position at the annual general meeting on Thursday night with the key points being:
■ Huawei walked away from a three-year deal worth $3.3 million;
■ New probity laws not allowing government departments to accept corporate hospitality cost the Brumbies $350,000;
■ The ARU continued to reduce its funding, cutting a further $300,000 from the amount given to Australian teams;
■ Ticket sales were up 30 per cent compared to 2011;
■ The British and Irish Lions game for Canberra's centenary will inject $450,000 into the Brumbies' coffers;
■ Rugby participation increased by 3.42 per cent;
■ The salary cap increased from $4.1 million to $4.5 million with Australian teams contributing the extra $400,000;
■ And sponsorship is projected to increase by almost $1 million next year.
The news of the Brumbies loss came on the same day the Newcastle Knights NRL side was thrown into turmoil with the Australian Tax Office moving to have it wound up following unpaid debts.
It's understood the Queensland Reds will be the only Australian franchise to not incur a loss from the past season.
While conceding the loss was a blow, Fagan is upbeat about the future.
''One of our aims is to be consistently profitable, but Huawei's decision hurt us as did the new regulations for government accepting corporate hospitality,'' Fagan said.
''We have a national governing body that isn't as financially strong as the AFL and NRL and their funding has been reducing at quite a significant rate.
''To be facing a $1 million loss last Christmas eve, it was a disturbing time.
''The positive thing is all our lead indicators are up and we're forecasting a profit … from January we knew we had to measure this across two years because we knew we could turn it around, but we needed time.''
The Brumbies' planned development of their Griffith headquarters - which will house 134 apartments - and the impending $15 million relocation to the University of Canberra is separate to the operating loss.
Despite losing more than $500,000, the Brumbies continued their $1.1 million commitment to community rugby.
In Huawei's absence, the University of Canberra stepped in as the major sponsor. However, the university's financial contribution was believed to be about $750,000 - $350,000 less than had been budgeted for.
The university has signed on for a second season and its financial contribution will increase.
The Brumbies' playing strip is worth more than $1.8 million in sponsorship and the club has already secured about $4.5 million in sponsorship for next season.
That means the Brumbies will be able to recoup their loss and turn it into a profit within 12 months. After a horror 2011 campaign, the Brumbies set low targets for ticket sales and memberships.
But the start of the Jake White era was ushered in by unexpected good results, increased crowd numbers and a revival on the field.
The Brumbies needed just one bonus point or to win their last regular season match to end an eight-year finals drought. But they faltered against the Auckland Blues and missed the finals. ''Our point of difference has to be having the best rugby program in Australia, a team that performs well which in turn fills the stadium, sponsorship and corporate hospitality,'' Fagan said.