UPDATE: Rugby Australia chairman Cameron Clyne says the organisation's $5.2 million profit for 2018 will help soften the financial blow that comes with a Rugby World Cup year.
Rugby Australia announced the surplus on Monday after its Annual General Meeting, an $8.9 million turnaround from 2017's $3.7 million operating deficit.
A major part of the turnaround was attributed the axing of the Western Force, with Super Rugby team costs down roughly $6.4 million in 2018.
Player contracting costs also reduced significantly in 2018.
Matchday revenue was down by $2.7 million in 2018, largely due to a smaller turnout at the 2018 Sydney 7s held on the Australia Day long weekend.
Strong attendances for the Ireland June Series helped to soften this hit and that of the lower crowds for Rugby Championship matches against Argentina and South Africa.
"What the profit we've engineered for 2018 allows us to do is actually not have to cut (costs) by absorbing the loss we're going to make in 2019," Clyne said.
"The ultimate solution is to get revenue that's more sustainable, not always reliant on team performance."
The reduced costs involved with Super Rugby also, the report stated, allowed for an extra $1 million to be directed into the community space in 2018.
While the axing of the Force was not the only contributing factor to Rugby Australia's financial turnaround, Clyne said rugby in the country was reaping the benefits of that reduction in costs.
"The reason that we went through the process of going back to four teams - one was to improve the financial health of the organisation and put us in the position where we can actually increase funding, we have increased funding across the board in a number of areas," he said.
Clyne also said the on-field improvement of the Australian sides this season was starting to translate into meaningful numbers.
But also to make the teams more competitive and both in 2018 and 2019 the teams have been more competitive.
"So, you're starting to see early uplifts in broadcast numbers and those sort of thing, which suggest if that continues then you start to get better performance and better revenue flowing from that."
SUPER RUGBY and SANZAAR
One of the issues that was expected to be potentially contentious at Monday's AGM was the SANZAAR decision to axe the Sunwolves from Super Rugby.
Australia's Super Rugby franchises have all worked to use the Sunwolves as a springboard for commercial opportunities in Japan and were believed to be supportive of keeping the side in the competition.
However, the withdrawal of support from the JRFU for the team would likely have left the Super Rugby bill for the Sunwolves in the hands of the SANZAAR partners, something they were unwilling to take on.
Clyne played down talk of tension over that decision, confident the new 14-team format would ultimately be the best thing for Australia.
"I think what's pretty clear, is that the only way really to drive increased revenue is having fan engagement, which leads to sponsor engagement and broadcaster interest," he said.
"That's about teams being competitive, so every contest meaning something, as opposed to games where there's either a pre-determined result or limited interest.
"I think what we're seeing now is, if you look at this year's format, we are seeing a better improvement in the way fans are reacting to Australian teams being more competitive, that's leading to - what was pleasing today, is some of the new sponsorship arrangements that are coming through.
"Sometimes, less can be more and I think a lot of sports have gone down, and I think we're open in acknowledging the expansion path didn't work for Super Rugby but also part of that is not actually repeating the mistake and saying, "Well how do we get back to a format that's more engaging?"
Following positive meetings with rugby’s major stakeholders in Dublin today, here is the proposed Nations Championship format. pic.twitter.com/7lOzBgHWC7
— World Rugby (@WorldRugby) March 14, 2019
Clyne was confident the potential introduction of World Rugby's proposed Nations Championship would help to grow Australia's broadcast pie beyond 2020 as well.
The fate of that competition is still very much unclear, with a number of Northern Hemisphere nations holding out on approving the competition.
If it is agreed upon, it has been predicted the competition could provide roughly. $9.4 billion in broadcast revenue for the sport.
While he wouldn't guarantee there would still be a broadcast deal increase without the newly-proposed competition, Clyne said SANZAAR was working on alternative Rugby Championship formats regardless.
"It's hard to say (if there would be an increase without it)but that will come down to the format we design," he said.
"If you design formats, where more of the games really have something on the line then that actually drives a broadcaster interest.
"In other formats beyond the World Nations (League) that's what we're thinking about."
With a focus on ensuring every Test has a meaning beyond its own intrinsic value, options like promotion-relegation would likely be among those on the table.
"At the end of the day, we're happy to look at any of the concepts - it's that thing about saying that all Test matches must mean something," he said.
"They obviously all mean something in the sense of the players wearing the national jersey but it means something in the sense that it's going to contribute to something and that's why things like promotion/relegation and those sort of things, which are difficult concepts, but that adds interest into the game.
"We're open to any sort of format and the good thing about SANZAAR is it's a pretty mature joint venture now so we've got a pretty good working relationship around that table to work out what might be interesting formats for the Rugby Championship going forward."
PARTICIPATION
Rugby participation grew across a number of sectors in 2018, with club and schools growth, defying seemingly negative public sentiment towards the Wallabies.
Club XVs grew across the country with Queensland and Tasmania recording the greatest increase in participation in 2018.
Women's participation was up 57 per cent in clubs Sevens and 50 percent in Club XVs after a year that saw the introduction of Super W and the expansion of the Aon Uni 7s competition.
School programs were delivered to more than 69,000 schools, of which 61 per cent were government schools and 46 per cent were female.
Clyne said that the Wallabies had a lean year in 2018 and participation was still able to grow was a positive for the sport.
A strong performance at the Rugby World Cup could help continue that growth and Clyne said Rugby Australia had to make the most of that chance.
"One of the pleasing things was the uplift - we're seeing extraordinary uplift in things like women's participation both in sevens and XVs," he said.
"Our schools program is really moving forward with a lot of participation, particularly now getting into the government schools.
"We've got an exciting series of programs to engage in regional parts of the country as well.
"There's no question in a World Cup year, particularly if the team does well, it does have the opportunity to leverage off that.
"One of the things we have as a sport is we're a global sport, we're one of the few Australian sports that's on the global stage.
"We would be very much hoping leading into the World Cup that we're actually able to gain a lot of interest, right up to the farewell Test match at BankWest Stadium, build up that up to their (the Wallabies') departure and then hopefully coming back holding the cup and using that as a leverage into 2020 to really build off participation."
BOARD CHANGES
Former Wallabies flanker Phil Waugh was elected to replace outgoing director John Eales while Pip Marlow was re-elected to the board.
Darryl McDonough and John Sharp replacing John Massey and Josephine Sukkar on the nominations committee.
Tim Gavin was elected to replace Tony Shaw as the Rugby Australia president, with David Codey appointed senior vice-president and Marty Roebuck junior vice-president.
Ann Sherry also confirmed her intention to step down from the board after the 2019 AGM.
