‘Under massive stress’: Rebels coach reveals staff have one pay cheque to go after club wins survival vote

Directors for the Melbourne Rebels have secured a major victory against Rugby Australia after creditors voted to support a rescue deal to save the debt-laden Super Rugby club.

The proposal, put forward by a private equity-backed consortium led by business heavyweight Leigh Clifford and the Melbourne Rebels’ directors, still relies on the support of Rugby Australia and the tax office – which both voted against the deal.

The Melbourne Rebels will continue their bid for survival after creditors backed a rescue deal.

Consortium spokesperson Georgia Widdup welcomed the vote and thanked administrator PwC for ensuring employees received their full entitlements.

“The Melbourne Rebels are an integral part of the sporting fabric of the state and play a critical role in making Melbourne the sporting capital of the world. Today’s decision ensures the women’s and men’s club can progress plans for our financially sustainable future,” Widdup said.

Widdup said the vote had boosted morale at the club, where staff and players had been left on tenterhooks.

“I’ve had some text messages – not from players, they’re concentrating on tonight’s game – but the others are saying they are thrilled. They feel like we’re still in the hunt and are super excited.”

Asked whether there was a worry that the impending legal proceedings would restrict Rebels players from signing at other Super Rugby clubs, Widdup said: “I haven’t heard anything about that.”

Rugby Australia, which outlined its support for liquidation as early as February, voted against the deal ahead of the meeting.

The peak body acknowledged the outcome in a statement on Friday night, adding: “RA is pleased that the Rebels’ employees will receive 100 per cent of their entitlements.

“RA will continue with its evaluation of the viability of any future business models for the Melbourne Rebels, and engagement with the relevant stakeholders in this process.”

Two sources, who attended the 2pm meeting on Friday but declined to be named for professional reasons, said the administrator had the deciding vote after the creditor vote was tied on the consortium deal.

The sources added the Australian Taxation Office had voted against the proposal.

Notes taken of the meeting by the sources reveal ATO representative Craig Moreland explained the tax office rejected the proposal as there was no legislative basis to waive the Rebels’ directors from the $11.6 million tax debt the directors are personally liable for.

Moreland added there would be a benefit for a liquidator to investigate the claim made in the administrator’s report that the Rebels had been trading insolvent from at least 2018.

The first-stage distributions to employees and unrelated unsecured creditors are equivalent to $4.28 million. The directors of the Rebels have also agreed to fund the administrators $741,000 for their work in running the club.

The consortium is also planning to raise a further $15 million to $25 million to propel the club into 2025 and beyond.

Under the deal, employees will receive a return of 100¢ in the dollar, and unsecured creditors will receive between 15¢ and 30¢ in the dollar. The range of the payout will depend on whether the directors are successful in their planned legal claim against Rugby Australia over alleged underfunding of the club.

The Rebels’ consortium must jump two hurdles before it can retain control of the company: Rugby Australia handing back the licence for the Super Rugby competition, and the Australian Taxation Office releasing the directors from their personal liability over the club’s $11.6 million in tax debts.

The group has 30 days to negotiate with the sport’s peak body and the tax office. If unsuccessful, the consortium will then have 60 days – or a date approved by the administrators – to commence legal proceedings to wrangle back the licence.

If they’re still unable to claim back the licence, or be released from their director penalty notice, the deal will collapse, and the consortium will no longer have any claim to the company.

However, there is a clause that allows the consortium to waive either of these conditions.

Widdup said the directors were still in discussions with the tax office and expected there would be more talks in the near future.

“There is still a lot of work to do, but with the vote out of the way and a lot of community and government goodwill behind the club, we can finally get excited about what the future holds, and we urge Rugby Australia to support rugby in Victoria.”

Relations between the directors of the club and Rugby Australia remain frayed despite the parties resuming meetings this week ahead of the meeting. Last week, Rugby Australia accused Melbourne Rebels’ directors of misusing tax funds forwarded by the national body amid revelations the Super Rugby club had been trading while insolvent from at least 2018.

In regards to Rugby Australia’s view, Widdup said on Friday: “I think they can say what they want to say. I guess what we’re keeping our focus on is keeping the team alive in Victoria. And we’ve certainly achieved that today. At least we’re a step forward anyway.”

Hours after the meeting, the Rebels lost 38-11 to the Auckland Blues in a Super Rugby clash at AAMI Park, and following the defeat, coach Kevin Foote said the Rebels felt abandoned by Rugby Australia.

Feeling the pressure: Melbourne Rebels coach Kevin Foote.

Foote, who was coaching at the Western Force when they were culled by RA, called for the governing body to show their hand.

“I don’t know what their [RA] intentions are,” Foote said.

“I know they voted liquidation today and last week we were told that they were happy that there was a DOCA [deed of company arrangement] and now liquidation, so it would be great to hear something from them.”

RA has propped up the club this season, taking over the wages bill for players and staff but Foote said head office had offered no support beyond that.

Melbourne’s Matt Gibbon reacts after the loss to the Blues on Friday night.

Representative from the Rugby Union Players Association were in Melbourne last week to talk the club through the rescue proposal but RA hasn’t been seen since in months.

With four rounds to go before the end of the regular season, Foote said the entire club was feeling the pressure. He previously said he was hiding the possible demise of the Rebels from his young son because he knew how much the boy would worry.

Foote said staff had one pay cheque left to come from RA.

“Staff and players, it’s the human element,” he said. “There’s definitely people under massive stress, everyone is under stress as a matter of fact.

“It speaks again to their performance tonight – guys have done this since day one, before even the season kicked off they’ve been under this pressure. Are people feeling supported? I’d say no.”

While the Rebels, who were fifth on the ladder heading into the round, are targeting their first finals campaign they are also dealing with other clubs and codes circling their players, with star playmaker Carter Gordon believed to be in the sights of a number of NRL clubs.

With Iain Payten, and AAP

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