Background to the inquiry
On 11 August 2017, the Board of Australian Rugby Union (ARU) announced
that it would discontinue the Super Rugby licence for the Western Force.
The decision prompted outrage among rugby union fans who believed that the
process the ARU used to arrive at that decision was flawed.
Eliminating one Australian team from the international competition also
saw broader concerns raised around the governance and financial sustainability
of rugby union in Australia and the ARU as custodians of the game.
Committee's interest in the inquiry
On 6 September 2017 the Senate referred the future of rugby union
in Australia to the Senate Community Affairs References Committee for inquiry
and report by 13 November 2017 with the following terms of reference:
The future of rugby union in Australia, with particular
- the Australian Rugby Union Board deliberation leading up
to the decision to reduce Australian rugby teams from five to four in the
- whether there continues to be a truly national rugby union
footprint in Australia;
- the role of national and state-based bodies in encouraging
greater national participation in rugby union;
- the corporate governance arrangements and composition of
national and state-based rugby union bodies, including community representation
on those bodies;
- the impact of the decision to reduce the number of
Australian teams on national participation in rugby union; and
- any other related matters. 
The committee received extensions to report until 15 November 2017.
When this inquiry was announced, and when Mr Cameron Clyne,
Chairman of the ARU appeared before the committee, the ARU stated publicly that
it 'questioned the merit' of the inquiry.
The committee considers there are two main reasons for undertaking the
inquiry. First, the inquiry offered an opportunity for members of rugby union
clubs across Australia to place on record their concerns regarding the process
the ARU worked through to arrive at the decision it did and their concerns
about the ARU's stewardship of the game more broadly, particularly with a view
to ensuring the game becomes sustainable into the future.
Second, the sport attracts more than $1.8 million in federal funding
Accordingly, ensuring appropriate governance arrangements support the
expenditure of this funding is in the national interest.
During this inquiry witnesses questioned:
the ARU's decision to agree to remove a professional rugby team
and its impact on the sport;
the process by which the ARU decided that the Western Force would
be removed, including licence arrangements and the underlying analysis which
supported the ARU's decisions;
whether decisions made by the ARU exacerbated the financial
challenges for the sport in Australia; and
the impact of the decision on player welfare and confidence in
professional Rugby Union in Australia.
The elite rugby union competition in the southern hemisphere is known as
Super Rugby. Super Rugby is convened by a joint venture of the rugby union
boards of Australia, New Zealand, South Africa and Argentina known as SANZAAR.
The competition includes teams from each of those countries and one from Japan.
SANZAAR is responsible for determining the format of the competition and
leads the discussion regarding television broadcast rights
The Chairman and the Chief Executive Officer of the ARU represent Australia on
the SANZAAR Board.
The ARU is the governing body for rugby union in Australia. The members
of the ARU are the State and Territory Unions, Super Rugby licensees and the
Rugby Union Players' Association (RUPA).
The business of the ARU is managed by a board of directors appointed by the
The number of professional Australian rugby teams has varied over time.
Before the Western Force joined the Super Rugby competition in 2006, there were
only three professional Australian teams: Queensland Reds, New South Wales
Waratahs and the ACT Brumbies.
A fifth Australian franchise, the Melbourne Rebels, joined the Super
Rugby competition in 2011.
In 2016, the Super Rugby competition expanded from 15 teams to 18 teams,
including teams from Argentina and Japan and a fifth South African team.
A new broadcast agreement was negotiated for the period 2016–2020 to
cover the expanded competition.
The new broadcast agreement provided a substantial windfall to the SANZAAR
joint venture partners, including Australia. The ARU informed the committee
that it received $285 million over the broadcast term.
In 2017, after one season with the 18-team format, SANZAAR decided to
revisit the decision to alter the competition format.
Altering the format of the Super Rugby competition during the term of the
broadcast agreement required the agreement of all of the joint venture
partners. This requirement meant that Australia possessed a veto power that it
could have exercised in the SANZAAR process.
The ARU, as the Australian representatives, decided not to exercise that right.
On 10 March 2017, the SANZAAR partners unanimously agreed to reduce the
number of teams in the competition from 18 teams back to 15 teams.
As part of this agreement, the SANZAAR partners agreed that two South African
and one Australian teams would be removed from the competition.
The decision on which Australian team would be removed was solely the
decision of the ARU.
Ultimately, the ARU decided that the Australian team to be removed would
be the Western Force.
The next chapter of this report considers why the ARU decided not to
veto the removal of an Australian Super Rugby team and how it decided which
team would be removed.
Chapter 3 examines the corporate governance of the ARU and its
stewardship of rugby union in Australia.
A final chapter contains the committee's conclusions and recommendations.
Conduct of the inquiry
The committee advertised the inquiry on its website and wrote to
relevant individuals and organisations inviting submissions by 12 October 2017.
A list of submissions made to the inquiry can be found at Appendix 1.
The committee held three public hearings in connection with the inquiry:
20 September 2017—Perth;
11 October 2017—Perth; and
16 October 2017—Canberra.
A list of the witnesses who appeared at the hearings can be found at
The committee thanks all those who contributed to the committee's
Note on references
All references to Committee Hansard are to proof transcripts. Page
numbers may vary between proof and official transcripts.
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