News 29 October 2015

Australian rugby’s insurance policy bet

The Australian Rugby Union (ARU) has reportedly laid an AUD$300,000 (€195,000) bet on Australia winning the Rugby World Cup this weekend, as part of an insurance policy to cover player bonuses. The Sydney Morning Herald has reported that the ARU and the Australian Rugby Union Players Association (RUPA), the representative body for professional rugby union players in Australia, negotiated a bonus agreement back in July.

The agreement stipulated that each member of the 33-player squad would receive a $100,000 bonus should they lift the William Webb Ellis trophy on Saturday. According to The Australian, this would mean that the ARU would have to pay the players a sum of AUD$3.3 million (€2,150,000) in total, should they be successful. In order to offset the risk of such a substantial payout, the governing body reportedly laid a bet through an insurance company that the Wallabies would win the tournament.

While the practice appears unusual in a sporting world where betting is tightly regulated under anti-corruption regulations, the unorthodox insurance policy is reportedly common practice among national rugby federations the world over. Under Regulation 6.3.1 of World Rugby’s Anti-Corruption and Betting Regulations, ‘no connected person shall, directly or indirectly, wager and/or attempt to wager on the outcome’ of any match. As a result the ARU were compelled to engage an insurance firm to in turn place the bet directly with a bookmaking firm, which is reportedly what was done in this instance. Such a move is reportedly allowed under the regulations as it is ‘deemed an insurance move to minimise losses.’

An ARU spokesman is reported to have said that, ‘We have an arrangement in place with [Rugby Union Players Association] around player bonuses for the Rugby World Cup, the details of which are in commercial confidence. This arrangement is not inconsistent with what we’ve had in place for previous World Cups.’

While the exact details of the structure of the bonus payments and insurance policy have differed in tournaments past and between national governing bodies, the Irish Rugby Football Union and the English Rugby Football Union reportedly have had similar structures in place for both the current World Cup and previous tournaments. The ARU and RUPA allegedly began negotiating bonus settlements at the 1999 Rugby World Cup.

According to the Australian sports news site, The Roar, the ARU has been plagued with financial difficulties over the last few years. The ARU’s Chief Executive Bill Pulver is reported to have said that, were it not for a lucrative British and Irish Lions tour to Australia in 2013, the federation’s financial situation ‘would have been very precarious’. According to the site, at a domestic level only one of the country’s five Super Rugby franchises made a profit in 2013.

According to the ARU’s Annual Financial Report, the governing body recorded a net deficit of AUD$6.3 million (€4 million) in 2014 compared to a net surplus of AUD$19.5 million (€12.5 million) in 2013, which was ‘attributable to the contribution from’ the Lions tour. The financial difficulties are thought to be due to a combination of poor performances; a dwindling fan-base due to competition from other sports, which also impacts on broadcast deals; and high player salaries.

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