The big challenges for Phil Waugh – and how to end the trans-Tasman rows

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Flanker-turned-banker Phil Waugh knows better than most that money talks.

The old saying goes that the love of money is the root of all evil, but in rugby terms an imbalance of money has been the root of all mischief in the troubled Rugby Australia-New Zealand Rugby relationship in recent years.

Rugby Australia brought in $49.5 million of broadcast revenue in 2022, while New Zealand Rugby earnt $NZ102 million ($92m) in the same period.

Waugh, therefore, should have an unapologetically commercial focus in his new gig. A better broadcast deal – even Rugby Australia powerbrokers will tell you that the previous one with Nine/Stan, the publishers of this masthead, was “below market” — and a private equity deal structured to make sure that revenue from the British and Irish Lions tour and Rugby World Cup doesn’t end up in a Cayman Islands vehicle controlled by Silver Lake or CVC: they’re the big ticket items on his desk.

If Waugh pulls those off, the speed at which the trans-Tasman relationship improves will border on the miraculous, and a sense of amnesia will sweep across those who have fired bitter words back and forth in both directions. They will be back to being the best of friends.

It’s true that Waugh has other loftier aims, with the former Waratahs ruck pest declaring that he wants to reinstate the link between the grassroots and the professional game.

New Rugby Australia supremo Phil Waugh.Credit: James Brickwood

But, it’s hard to measure those nebulous aspirations, and certainly the broadcast and private equity deals are far more pressing.

The private equity deal has been much discussed but little understood. However, the Herald understands that Rugby Australia’s plan is to effectively mimic the New Zealand Rugby model. Should the deal proceed, a new entity, let’s call it RugbyCo, will be established to house Rugby Australia’s commercial assets, with the private equity group owning a slice of this in return for the upfront capital it provides.

This would be a monumental change for Rugby Australia, but particularly so given the timing. The Golden Decade is expected to bring in significant sums of money for Rugby Australia, and Waugh should be fighting to build a fence around that revenue so that the private equity firm gets as little of that windfall as possible (or nothing, preferably).

Think of it as a cake you’ve made for a party — you don’t want to give a late arrival a big slice because the original invitees will miss out.

The British and Irish Lions will return to Australia in 2025.Credit: Fairfax

It’s going to be a challenge because as anyone with a mortgage knows, the price of money has gone up in recent years. Private equity will want more from Rugby Australia than they would have a few years ago. They are in it for the money and the earlier reference to the Cayman Islands was not facetious: Silver Lake really has transferred its share in New Zealand Rugby Commercial Co to that tax-free domain.

An uplift from the broadcast deal may actually be the easier part of Waugh’s brief. The current deal expires in 2025 and while the Nine/Stan coverage has been sharp Rugby Australia would clearly like to have some competitive tension for the sale of the rights in the next cycle.

The formula used by Rugby Australia and New Zealand Rugby to calculate the split of broadcast revenue for Super Rugby Pacific is complex, but the principle behind it is simple: the bigger your own domestic deal, the more you’ll eventually pocket.

It’ll be up to Waugh to drive that – probably with a much narrower commercial focus than the ‘whole of game’ approach that Rob Clarke used to deliver the Nine-Stan deal. There is simply no way of delivering equality in the partnership with the Kiwis until the revenue gap starts to come down.

We haven’t mentioned the Wallabies, Super Rugby underperformance, the women’s game or community rugby in any of the above.

How can they not be the most urgent issues, you might ask? Well, as a former Wallaby, Waugh will, of course, have a firm high-performance view.

But, in his new role, his ability to influence those programs positively will be defined by what he does in the boardroom. Players carry two or three key messages before a game, to achieve two or three key outcomes. It’s no different for Phil Waugh the executive.

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