The true cost of the Folau saga

Mystery spikes in Rugby Australia’s player and corporate costs in 2019 were largely caused by a multimillion-dollar payout to Israel Folau, legal fees and a crisis public relations firm used during the damaging controversy last year.

RA’s financial figures for 2019, which are yet to be signed off by auditors but were leaked to News Corp, show a year where an A$8 million loss in revenue due to the World Cup was compounded by a A$7 million rise in expenditure.

Two of the notable changes in the figures from 2018 were a A$4 million rise in ‘‘player costs and RUPA (Rugby Union Players Association)’’ from A$16.8m to A$20.5m, and a A$3.8m rises in ‘‘corporate costs’’ from A$15.3m to A$19.1m.

As with many things in rugby 2019, the sums largely trace back to the Folau saga, which saw the former Wallaby fullback settle for an undisclosed sum with RA and NSW Rugby after being sacked, and then pursuing his employers for unfair dismissal.

The Sydney Morning Herald has learned the full Folau settlement – which was approximately $4m but with 50 per cent paid by NSW Rugby – is included in ‘‘player costs’’, despite being paid in instalments. It is also listed elsewhere as a part of the A$20 million RA owe to creditors.

The cost of the Folau affair is also a big chunk of the spike in ‘‘corporate costs’’, due to legal fees and the cost of RA hiring of external PR firm Bastion Reputation Management, founded by former AFL and National Australia Bank head of communications Brian Walsh, during the crisis.

Also included in the corporate costs was the recruitment of Scott Johnson as director of rugby on an estimated salary of A$650,000 a year – on top of Wallabies coach Michael Cheika in his last year in charge – and the 2018 additions of senior executives Cameron Murray and Simon Rabbitt.

Along with Folau’s payout, the A$3.7 million hike in ‘‘player payments and RUPA’’ costs also includes the first year of Michael Hooper’s million-dollar-a-year contract, as well as the cost of getting halfback Nic White back from the UK.

RA announced a A$9.4 million loss after the AGM in late March, which is comparable to that in other World Cup years such as 2015 (A$9.8 million loss) and 2011 (A$10.6 million deficit).