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In one of his first interviews as Rugby Australia chairman, Hamish McLennan made a couple of statements that, in retrospect, are illuminating.
The first was that “Dave Rennie is going to be a fantastic coach for us”. “He’s very calm,” McLennan told Sky Sport New Zealand three years ago. “He’s a grown-up.”
The second was that RA had found itself in a position “10 years in the making”. “I don’t want to name names,” he said, “but I think the administration’s had some issues in the past … I thought that, with my skill set and what I’ve done in the past, I could help.”
To the first point, we know the post-script: McLennan sacked the grown-up and replaced him with Eddie Jones, who has overseen the Wallabies’ most diabolical Rugby World Cup campaign to date.
The second remains the one in question: has McLennan helped Australian rugby and is the skill set he speaks of suitable to help it in the future?
The answer depends very much upon whom you ask. Few figures elicit such a diversity of opinion as the high-flying media and advertising executive. Those in rugby who love him are happy to sing their support from rooftops. Those who do not are often reluctant to go on the record. Some are unwilling to speak even off the record.
Polarising, in and of itself, is not necessarily a negative trait in a leader if tough decisions must be made. It becomes an issue if the people being polarised are the ones who need to work cohesively to rescue a code on the precipice of apparent doom.
Rugby Australia CEO Phil Waugh, left, and chairman Hamish McLennan at Allianz Stadium in Sydney.Credit: James Brickwood
At the time of McLennan’s appointment in June 2020, rugby – like every other professional sport – was ravaged by COVID-19. Raelene Castle had just been manoeuvred out of her role as RA chief executive in ugly circumstances and director Peter Wiggs had also resigned.
With no broadcast deal, no product to sell and wages still to pay, insolvency was a prospect. But it wasn’t just that; rugby was on the verge of death by irrelevance. Next to no one wanted a piece of Super Rugby and “The Hammer” McLennan was seen as the great “reset”, according to his predecessor and former Australian captain Paul McLean.
McLennan, a former Network 10 and News Corporation executive saw himself that way, too, and was happy to spruik himself as the vessel for salvation. That was, in part, what made him successful.
As he and interim chief executive Rob Clarke took drastic steps to keep the code solvent, grow the broadcast pie with Nine and its streaming service Stan and win hosting rights for the 2027 men’s and 2029 women’s World Cups, McLennan ensured – through the loudness of his own voice – that rivals knew Australian rugby had something to say.
“I was asked to walk in as chair three years ago when nobody else really wanted to and the board has done a remarkable job keeping the game alive, which will be crowned by us hosting the men’s and women’s World Cups in ’27 and ’29,” McLennan said on Friday.
“These monumental achievements will save the game. I’ve been saying for three years the game needs constitutional change and centralisation. That is absolutely the right strategy and the member unions and Super Rugby clubs need to agree to this massive overhaul, or we’ll keep getting the same results.
“Perhaps that’s why we haven’t won a Bledisloe in over 20 years and our results keep going backwards. If there’s further churn at the top of rugby, I think that will be far more detrimental to the game and I think that will cause a greater loss of revenue and instability, which will only benefit our competitors. Our enemies and the NRL don’t want rugby to succeed and a resurgent RA is not good for their business. I know I irritate them.”
The NRL and New Zealand Rugby were the central targets, and both were – and are – goaded relentlessly. On the one hand, this type of single-mindedness was brilliant for a sport in sore need of publicity. On the other, he was reaching beyond his remit of chairman and putting some of his own people offside.
Descriptions of McLennan by various sources include “aggressive”, “ambitious”, “tone deaf”, “likeable” and “impossible to work with”. He manages up but not down, has a propensity to light fires and then expects others to put them out and likes “to control everything” in a manner more befitting a chief executive than a chairman.
When McLennan encountered a strong-minded chief executive in Andy Marinos (who declined to comment for this article), they clashed and Marinos departed and was replaced with 79-Test veteran and RA director, Phil Waugh.
One of the major points of difference was the $5 million acquisition of Joseph Suaalii, which accompanied a diverting war of words with Australian Rugby League Commission chairman, Peter V’landys, who he said was having a “squeal” because rugby is raiding his talent.
The other was the sacking of Rennie and wooing of Jones. According to multiple sources who spoke with this masthead, McLennan did the deal and it was subsequently approved by his board. McLennan denies this is how it happened.
“Eddie wasn’t a captain’s call and it went to the Rugby Committee and full board,” McLennan said. “I absolutely raised Eddie as an option when he got cut and negotiated his contract but the whole board had been concerned about the coaching and team’s performance for some time.
“Perhaps Eddie is a great coach operating in a dysfunctional system. If Steve Hansen and others think he’s the real deal, maybe we need to give him time and resources. He’s got three different teams to three World Cup finals, which is a stunning achievement for any global coach.”
For many surrounding McLennan, the general consensus is that, on matters pertaining to Eddie, he has a blind spot. In January, at Jones’s welcome home press conference, the chairman joked the returning coach could have “whatever he wants”. Jones went on to dismiss Rennie’s backroom staff, select one of the least experienced World Cup squads known to man and secretly interviewed for the Japan job days before the ill-fated tournament kicked off.
“The nature of captain’s picks is that you live and die by those decisions,” says Hunter Fujak, a lecturer in sports management at Deakin University and the author of Code Wars. “In this case, it certainly hasn’t looked like it’s worked out thus far [with Eddie Jones]. Obviously, we’re only a year into a five-year contract with Jones.”
Since the historic 40-6 loss to Wales, fingers have been pointed at Jones. By extension, they have also been pointed at McLennan. All Blacks great Andrew Mehrtens was among them, lamenting a “lack of humility” from senior RA figures.
“[It is about] acknowledging mistakes and moving forward and if that means there has to be some blood spilled at the highest level, well there has to be blood spilled,” Mehrtens said.
McLennan himself this week told this masthead he holds himself “fully accountable” for his decisions. “If I am part of the solution, or not, I will live with that.”
He walked back those words on Friday. “Senior World Rugby officials have privately said to me, we need to restructure our organisation,” McLennan said. “The messages of support for myself and the need to drive this systemic change through have been overwhelming.
“My comments to Iain Payten were reflective of my acknowledgment that I am answerable to my stakeholders, but I’m not looking to jump ship when the going gets tough. If it all ended tomorrow, I leave knowing I gave my RA salary back to women’s and Indigenous rugby. I have an awesome wife, kids and friends, and we’ll all go and sit on a boat somewhere and have a laugh.”
Rugby Australia chairman Hamish McLennan, Eddie Jones and former Rugby Australia chief executive Andy Marinos in January after Jones was appointed.Credit: Getty
Phil Kearns, the former Wallabies captain who is on the board of the World Cup organising committee, was quick to defend McLennan’s capacity to navigate the code through a storm.
“If everyone’s just pointing the bone at Hamish, there are a few other bones that should be pointed back through history of the last 15 years because certainly Hamish didn’t create the on-field performance,” Kearns said. “I think if one thing comes out of this [it’s that] rugby administration and coaching and development is centralised in this country.
“We’ve seen what it’s done for New Zealand. We’ve seen what it’s done for Ireland and Scotland. It’s a model that works. And unfortunately the provinces might need to pull their heads in and do what’s best for Australian rugby, not what’s just best for their own province.”
This, really, is the sticking point: will the member unions unite under McLennan in the push towards a centralised governance structure?
For more than a decade Australian rugby has agitated for constitutional reform, away from the federated model in which member unions have a powerful say and compete for player talent, coaches and resources.
The deteriorating financial position of some has left them with little choice in the matter and, weeks before the World Cup, RA announced it had an in-principle agreement on an aligned national high-performance model.
But there is even less trust than there is money, and pressure is mounting on the governing body to prove, amid the rabble, that its senior figures are still fit for purpose.
“Clearly, we’re suffering from poor results at the moment, and that impacts the revenue line,” RA chief executive Phil Waugh said. “A more centralised professional environment leads to better results.”
While McLennan has been criticised for hiring of Jones, and the Wallabies’ poor performance, he has led a turnaround in the organisation’s financial performance. Last year, RA reported an operating profit of $8.2 million, compared with a $4.5 million loss the previous year.
For the past year, RA had been in discussions with private equity groups and investors who were interested in taking a stake in the organisation, but Waugh said that was now not an option to raise money in the short term.
“We’re going down the debt path and pausing the private equity process for the time being,” Waugh said. “It’s not because there was a lack of interest from private equity partners. But given the revenue events we have coming with the Lions tour in ’25, and the ’27 and ’29 World Cups, if we take additional debt now, then that sets us up to get the system in place to hopefully turn the poor performances into good performances.”
This November, RA is expected to finalise a new funding arrangement, with the troubled sporting organisation expected to secure lending in excess of $40 million. A new debt facility would replace RA’s existing $40 million loan with Ares Management that it took out in May 2021, during the pandemic, and on which it is paying a hefty interest rate of 11 per cent.
Waugh said the group would borrow more than $40 million but declined to state an exact figure. He said it would be used to pay off the Ares debt, replacing it with a new loan at a lower interest rate.
RA had been in previous discussions with private equity and investment groups, Silver Lake, CVC Capital Partners and Andrew and Nicola Forrest’s Tattarang, which also funds the Perth-based Super Rugby franchise, Western Force.
The additional funding will allow RA to restructure and grow the game from the grassroots to the national competition. Tattarang has not responded to multiple requests to confirm whether it is involved in the current debt funding deal that RA is negotiating.
Last year, New Zealand Rugby sold a 6 per cent stake in its revenue-generating assets for $NZ200 million ($186 million), valuing the organisation overall at $NZ3.5 billion. It sparked hope that a similar deal could be struck at RA.
Waugh said a debt deal should be finalised by mid-November. “We’re running pretty hard at it. We’re just working through what’s the appropriate number. It’ll be north of $40 million, so we’ve got some flexibility if the appropriate investments or opportunities come up.”
RA’s loan with Ares would have been repayable at the end of March 2027, almost six months before Australia hosts the men’s World Cup, adding to the pressures on the board and management.
Wallabies teammates console each other after the Wales defeat.Credit: AP
In RA’s 2022 financial accounts, the organisation’s then nine directors were paid a total of $883,450 including super and there was a $100,000 incentive payment though it doesn’t specify the recipient.
The accounts disclose that $140,000 of directors’ salaries were donated to the Australian Rugby Foundation and a further $20,000 to other rugby related charities.
The board now has eight directors, most of whom have joined since McLennan’s appointment. The longest-serving is former Salesforce boss Pip Marlow, who has held her position for seven years.
Separately, RA has to pay interest at the end of this year on £5.5 million ($10.5 million) of advanced funding that it received from World Rugby. The interest bill is estimated to be $630,000.
Businessman Rod Eddington is the chair of the men’s and women’s Rugby World Cups in 2027 and 2029 respectively. He declined to comment on the Wallabies’ disastrous showing in France and its effect on the game’s popularity and organisation’s profitability – or the next World Cups. “My focus is making sure ’27 and ’29 work well for everyone,” he said.
RA received two federal government grants from the Department of Health, for its men’s Rugby World Cup bid, which were estimated to tally $5.2 million.
In 2022, RA received almost $50 million in revenue from its broadcast rights deals. The next biggest earner for the organisation was match revenue, of $37.8 million. From sponsorship agreements, it received $29 million.
“We’ve got a broadcast arrangement that finishes at the end of ’25,” said Waugh. “We are certainly hopeful that we get some momentum in performance to increase that broadcast deal from ’26.”
Nine Entertainment Company, publisher of this masthead, has the television rights to Wallabies Tests and Super Rugby until the end of 2025, as part of a $30-million-per-year deal struck in 2020.
In addition to questions about whether McLennan should remain as RA’s chair, there are also concerns that he’s spread too thinly with his work commitments.
On top of chairing RA, he chairs the publicly listed REA Group, an online property company controlled by News Corporation. Last year, he also stepped up to become chair of another public company, Magellan Financial Group, after its poor performance led to the exit of its co-founder Hamish Douglass.
Magellan’s profit fell almost 60 per cent and its funds were down by just over one-third in its 2023 financial year. Last month, McLennan said he would become deputy chair, making way for Andrew Formica, a veteran of the funds management industry, to succeed him as chair.
McLennan’s other roles also include being chair of ARN Media, a media and entertainment business and a director of gambling products and services company Light & Wonder.
Earlier in his career, McLennan was chairman and chief executive of global advertising group Young & Rubicam. He’s also worked as an executive vice president in the Office of the Chairman at News Corporation, reporting directly to Rupert Murdoch. He was also Network 10’s chief executive for two years, where he managed to stabilise the television group’s ratings.
Whether McLennan stays as chair of RA will depend on the outcome of the post-World Cup review foreshadowed by Waugh.
The Wallabies play Portugal in the early hours of Monday morning and, while they are not yet ruled out, progression to the quarter-finals is a mathematical possibility only.
“Clearly, performance isn’t where it needs to be,” said Waugh. “It’s disappointing and challenging. It’s why we need to have systemic change across the system, so we set the professional teams up for success. But equally we need to focus appropriately on community and participation because that’s where our next Wallabies and Wallaroos are coming from.”
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