- Read the full letter from the Brumbies to their members at the bottom of the story
ACT Brumbies officials told the club's stakeholders they had "no other option" but to agree to a rescue package with Rugby Australia to avoid going into voluntary administration.
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In one of the biggest moments in Brumbies history, the Super Rugby franchise and Rugby Australia will announce a "partnership" deal on Tuesday morning. It will come into effect on August 1.
![Rugby Australia and the Brumbies are set to form a partnership. Main picture by Keegan Carroll Rugby Australia and the Brumbies are set to form a partnership. Main picture by Keegan Carroll](/images/transform/v1/crop/frm/j2iwCiKfwhVWJky39Vsdpt/fbd8b294-9e0d-4fa0-aeec-6b1d58a97df0.png/r0_0_1200_675_w1200_h678_fmax.jpg)
Stakeholders were called to a crucial meeting on Monday night to detail the Brumbies' financial plight and the intention to enter a deal to hand Rugby Australia the keys to the organisation.
Some of the significant developments include:
* The Brumbies being given a guarantee they would remain in Super Rugby and in Canberra until at least 2030. The guarantee was made in writing;
* The ACT Rugby Union - who effectively own the Brumbies - will split away from professional rugby. Two separate boards will be set up to have one oversee the community game in the capital, and a new board set up for the Brumbies and Rugby Australia;
* The ACT Rugby Union constitution will have to change to reflect the new set up'
* The Brumbies were offered a private equity deal last month, but rejected the approach because the terms did not suit the club's vision for the future;
* It's unclear if chief executive Phil Thomson and chairman Matt Nobbs will remain in their positions, or if there will be major leadership change when the deal comes into effect.
The Brumbies sent a wider letter to the club's members on Tuesday morning.
"Notwithstanding our early resistance to this shift, the ACT Brumbies board and executive have recently been working with RA to find a solution which is in the best interests of our staff, players, members, partners and key stakeholders," the letter said.
"This is at the heart of what we are all trying to achieve to secure a sustainable future at all levels of our game and we trust, as valued members of the ACT Brumbies you join us in this endeavor.
"Despite every effort to independently secure our financial future, with genuine interest from private investors, time and uncertainty around the future broadcast outlook has been our biggest hurdle to achieving this at this point in time.
"Driving our decision is the goal of stabilising our financial position. First and foremost, to protect our staff and players, while also ensuring long term success for our men's and women's teams at Super Rugby level and producing high quality players for our national sides.
"We believe this agreement achieves the above goals whilst also guaranteeing the ACT Brumbies remain in the national capital, tightly connected to Canberra and the surrounding region."
There is widespread acceptance that something needed to change at the Brumbies and the club was in danger of going bust if they continued to operate in the same manner.
But there is some division about the approach and concerns about whether Rugby Australia will set up a centralised academy in Sydney rather than having talent flow through Canberra's community ranks.
![Rugby Australia chief executive Phil Waugh, left, and Brumbies boss Phil Thomson. Rugby Australia chief executive Phil Waugh, left, and Brumbies boss Phil Thomson.](/images/transform/v1/crop/frm/j2iwCiKfwhVWJky39Vsdpt/4e0c42ff-4300-497a-b4d3-ad88e2c3dd8e.png/r0_0_1200_675_w1200_h678_fmax.jpg)
Splitting the Brumbies and the Canberra community game is an essential part of setting up a new Brumbies entity, but Canberra club officials - who have effectively owned the Brumbies since 1996 - are worried about what's next and the impact on them.
The Brumbies and Rugby Australia are adamant they have no intention of changing the pathways.
The Brumbies will still be able to operate as a Canberra business, with staff retained in the University of Canberra headquarters. But Rugby Australia will have input into major decisions and day to day operations.
The deal, however, was seen as necessary given the Brumbies' tight financial constraints. The club has been paying back a $1.7 million loan to Rugby Australia, and declining crowd revenue has hit the franchise hard.
The club still hasn't lodged its financial report from last year, but the Rugby Australia deal will give them financial security and allow them to do so.
THE PIVOTAL MEETING
Key stakeholders have been given a breakdown of the Brumbies' financial position, and a plan to save the club from going bust after a pivotal meeting on Monday night.
The Brumbies summoned community club rugby representatives - the key figures in the ACT Rugby Union boardroom - to the University of Canberra headquarters for what looms as one of the biggest moments in Brumbies history.
They were told of an imminent rescue-package deal with Rugby Australia, which is designed to give the Brumbies the off-field stability they have been craving for almost a decade. The deal will be announced on Tuesday.
The cost of that will be effectively handing the keys to the business to Rugby Australia - the game's governing body - and agreeing to a centralised model.
It's understood the Canberra rugby representatives were accepting of the Brumbies' financial pressure, but walked away from the meeting unsure about the widespread impact and what it means for the game in the capital.
But the meeting was a significant step towards the Brumbies and Rugby Australia entering into a partnership agreement less than a year after proposed centralisation models ignited an internal war in Australia.
After fiercely rejecting centralisation last year due to the fear of relocation or being merged, the Brumbies and Rugby Australia have since found common ground and are close to finalising terms to operate under one banner.
THE KEY GUARANTEE
Brumbies directors sought guarantees in writing about the club's future in Canberra and in Super Rugby.
When they received that detail, it laid the foundation for the parties to move forward and try to finalise an arrangement to work together.
The Brumbies will continue to operate as a standalone entity - including maintaining staff in Canberra and largely having autonomy on the rugby program - while Rugby Australia will oversee the business.
It's a deal similar to the one the NSW Waratahs entered into at the end of last year after Australia's biggest club signed a centralised deal. Rugby Australia appointed its own directors to the Waratahs board and has helped the club with its search to appoint Dan McKellar as the new coach.
It was thought the Waratahs' centralisation deal would trigger every other club to follow suit. But the Brumbies, Melbourne Rebels and Queensland Reds led a rebellion that eventually saw Rugby Australia chairman Hamish McLennan deposed.
Almost eight months since McLennan's axing, the tension has eased and Rugby Australia's venture into Waratahs headquarters has helped breakdown some barriers between head office and Super Rugby clubs.
Even so, the Brumbies couldn't escape the mounting financial pressure after a $1.7 million reduction in the broadcast deal distribution. What was initially a $1.7m grant from Rugby Australia turned into an interest-bearing loan, which the Brumbies have continued to pay back as they coped with declining crowds and a tough economic market.
Rumours have been swirling for some time about the Brumbies' ability to operate without further help from either private equity or Rugby Australia, and there were genuine concerns about entering voluntary administration.
The Brumbies continued to explore private equity options in recent months in an attempt to get financial security. When those did not eventuate, working with Rugby Australia was clearly the best option.
Forming an alliance with Rugby Australia effectively guarantees the Brumbies' immediate future and gives the club off-field stability, but it's unclear how and when any move would be implemented.
It's unclear what the changes mean for the community game in Canberra given the Brumbies and the ACT Rugby Union have been intertwined since the launch of Super Rugby in 1996.
Brumbies officials met with Rugby Australia bosses last month, prompting the Canberra clubs to seek an update from the ACT Rugby Union board.
The Brumbies have been continuing as business as usual in recent weeks, putting plans in place for next year's Super Rugby program and signing former Melbourne forward Tuaina Taii Tualima last week.
The squad is effectively finalised for next year, but hooker Liam Bowron is expected to sign an upgraded deal and winger Ben O'Donnell will likely commit to an extension.
LETTER FROM THE BRUMBIES TO MEMBERS
We are writing to inform you that the Board of the ACT & Southern NSW Rugby Union has agreed to transfer the responsibility for funding and managing the ACT Brumbies to Brumbies NewCo, a company which is wholly owned by Rugby Australia. This will result in us transferring the Professional Rugby Business and related business assets to Brumbies NewCo.
Notwithstanding our early resistance to this shift, the ACT Brumbies Board and Executive have recently been working with RA to find a solution which is in the best interests of our staff, players, members, partners and key stakeholders. This is at the heart of what we are all trying to achieve to secure a sustainable future at all levels of our game and we trust, as valued members of the ACT Brumbies you join us in this endeavor.
Despite every effort to independently secure our financial future, with genuine interest from private investors, time and uncertainty around the future broadcast outlook has been our biggest hurdle to achieving this at this point in time.
As part of our agreement with Rugby Australia, we will continue to pursue viable funding solutions, including prospective private equity partnerships, with a commitment from Rugby Australia that it will return the business to the ACT&SNSWRU either partially or wholly in the future should this come to fruition.
Throughout this entire situation the interests of our organisation and our most important asset, our staff and players, have been central to our considerations. Driving our decision is the goal of stabilising our financial position. First and foremost, to protect our staff and players, while also ensuring long term success for our men's and women's teams at Super Rugby level and producing high quality players for our national sides. We believe this agreement achieves the above goals whilst also guaranteeing the ACT Brumbies remain in the national capital, tightly connected to Canberra and the surrounding region.
Through taking on the professional arm of our business, Rugby Australia has committed to supporting the organisation through the current challenging financial climate facing all Super Rugby Pacific clubs in Australia. There is a clear desire for unity and a shared sense of purpose to work collectively to create a vision for the game that will deliver improved results across every aspect of our sport.
With this positive headway, we have committed to the alignment of the high-performance and commercial operations. This step will result in the Brumbies' professional Rugby operations across high-performance (players, coaches, support staff), business operations (sponsorship, marketing, membership, ticketing) and administration (finance) shifting to Brumbies NewCo from 1 August.
ACT Brumbies players will continue to be contracted under existing arrangements and all employees will continue in their current roles under the new entity.
The integration will still require local delivery and maintain the proud history of the ACT Brumbies. The new structure also recognises that our knowledge, expertise and experience in our own local market, with members, sponsors and key stakeholders will be crucial in working with RA to support this fundamental change.
From an operational standpoint, this is a case of business as usual in our day-to-day operations as we continue to work together to achieve heightened success. Outwardly we will continue to operate as one organisation, still proudly wearing the Brumbies colours, in support of the game of rugby in the ACT & Southern NSW region, whilst inwardly we will have different structural and governance systems.
In separating the structure, the ACT & Southern New South Wales Rugby Union will continue to take full responsibility and accountability for the community game, and for delivering programs to grow participation in, and engagement with Rugby at the grassroots, working in collaboration with the Brumbies and Rugby Australia. Enabling us to continue to prioritise the community game with a sharp focus on further enhancing our thriving rugby community across Canberra and regional NSW.
The Brumbies will be governed by a separate board comprising representatives nominated by the ACT&SNSWRU and RA, with this joint governance model supporting the co-ordination and cohesion of rugby in our region.
We are reassured by this renewed willingness to work collaboratively, with all members working together to achieve greater success for Australian Rugby both on and off the field.
There is still a lot of detail to work through and as valued members of the ACT Brumbies we will continue to update you as things progress.