A major rift has emerged in the long-term partnership between the ACT Brumbies and University of Canberra.
Animosity that has built between senior members of the organisations in recent months is now threatening to spill into legal action.
It is understood University of Canberra vice chancellor Stephen Parker sent a letter to Brumbies chief executive Michael Jones on Monday about potential defamation proceedings over an unknown incident or incidents. Parker did not want to comment and Jones declined to comment.
It is believed tensions between the university and the club have stemmed from the ongoing ACT Policing investigation into the controversial sale of the Brumbies' Griffith headquarters and subsequent move to Bruce.
That investigation was instigated by the Brumbies' own referral of "anomalies" to police after a review by the new administration of transactions from the sale and moving to a new home jointly funded by the Brumbies, University of Canberra and ACT government.
It is understood the university has sought via its lawyers access to the material the Brumbies submitted to police. The investigation is ongoing and may take another six months after papers were handed over.
The growing angst between the organisations, who share a joint facility on the university grounds, comes as the Brumbies prepare to announce a record financial loss of $1.6 million at their annual general meeting on Wednesday night.
But the Brumbies hope boardroom stability and new president Bob Brown will help turn their finances around, with former Wallaby Brown set to be elected unopposed at the meeting.
The Brumbies and UC relationships have been strained behind closed doors as they continue an alliance agreement and 30-year lease to be part of the university's sporting precinct.
However, the rugby program ties remain strong through scholarships for players as well as joint sports science, medicine and communication collaborations.
The alliance agreement is interlocked with the lease and opens pathways to join forces on a range of sports degrees and rugby player scholarship opportunities as well as a sponsorship package.
The university was the Brumbies' major sponsor for the 2012, 2013 and 2014 Super Rugby campaigns, stepping up when the ACT side struggled to find a corporate partner.
It was part of a plan for the Brumbies to sell their Griffith headquarters and move into a $16 million base at the university.
The Brumbies revealed in September there were "anomalies" in multiple transactions related to the sale of the Griffith headquarters and their move across town, with documents handed to ACT Policing.
The Brumbies have lost money every year since 2011 as they battled to secure financial backers and evolved in professional arena.
They lost $1.07 million last year with figures expected to show a $1.68 million this year.
Jones was appointed chief executive earlier this year and finalised an $8 million deal with major sponsor Aquis.
The Brumbies are confident a new Super Rugby television rights deal – understood to be worth more than $40 million for SANZAR – and the partnership with Aquis will give them a major injection, with officials projecting a $2 million turnaround next year.
Officials feared another boardroom shake up when three candidates nominated for the president's role after long-serving director Geoff Larkham announced his retirement.
However, Peter McGrath and John Gillespie have withdrawn from the race, leaving Brown to take on the challenge.
Brown's expected appointment as president will avoid a Brumbies' boardroom tussle for the second year in a row after the unexpected upheaval at last year's meeting.
Chairman Sean Hammond was ousted with Robert Kennedy, who served on the Brumbies' finance and audit committee for nine years, stepping in as his replacement.