MELBOURNE (Reuters) -The Melbourne Rebels will cease to exist as a Super Rugby team at the end of their 14th season next month after Rugby Australia announced on Thursday that it had rejected a rescue deal for the crisis-hit side.
The Rebels were founded in one of Australia's two biggest sports markets when Super Rugby expanded to 15 teams in 2011 but have been in administration since January with debts of A$23 million ($15.20 million).
Rugby Australia (RA) agreed to bankroll the team for the current season of Super Rugby Pacific but on Thursday chief executive Phil Waugh informed the players and staff that the franchise would be shuttered after that.
A consortium had put forward a plan to fund the club until 2030 if RA handed back the franchise licence but the governing body rejected their proposal because it did not "demonstrate sufficient financial viability".
"This is a very difficult day for rugby and for rugby fans in Melbourne, the players and the staff but we felt we had to get to a decision," RA chairman Daniel Herbert told reporters in Melbourne on Thursday.
"What has been put forward carries significant risk."
The Rebels' creditors had voted in favour of the consortium's plan on the recommendation of the club's appointed administrator.
However, RA said the Rebels had not been independently financially sustainable since 2011 and nothing in the consortium plan suggested that would change.
Businessman Leigh Clifford, who led the consortium, slammed the decision and said the group would sue RA.
"The Melbourne Rebels never want to go to court, but Rugby Australia’s actions to turn their backs and not negotiate on a commonsense A$18 million rescue plan has left the club no choice,” he said in a statement.
Herbert said tens of millions of dollars had been spent on the Rebels over and above Australia's other four Super Rugby clubs.
"To be A$23 million in debt six years later, yes, we’re disappointed," he added.
The competition will now be reduced to 11 franchises for 2025, meaning a likely reduction in games and potentially tough negotiations with broadcast partners and New Zealand Rugby.
The future of dozens of Rebels players and staff is up in the air, including Australia prop Taniela Tupou and a slew of other Wallabies.
"Obviously, everything’s very raw for us at the moment,” Rebels general manager of rugby Nick Stiles told local media.
"We’ve provided multiple players coming through the pathway now into the Australian Wallabies and Wallaroos as well and to think now that’s going to be jeopardised is something that cuts us all greatly."
Ironically, after 13 years of mostly struggling on the pitch, the Rebels have qualified for the playoffs of a full competition for the first time this season.
They play their final match of the regular season against Fijian Drua in Fiji on Saturday.
The Rebels were scheduled to play the British and Irish Lions during their tour of Australia next year and RA said it was "evaluating possibilities" for that tour game.
The Rebels' demise comes seven years after RA axed Western Force from Super Rugby, leaving the competition with four Australian teams. The Force returned in 2020 with the backing of mining baron Andrew Forrest.
RA's ability to field five professional rugby teams in a crowded sports market has long been debated.
RA took out an A$80 million loan from a private lender last year and spent more than A$6 million to ensure the Rebels could play this season.
Australia's other Super Rugby clubs have their own financial issues, with the Sydney-based New South Wales Waratahs recently reporting a A$4.8 million loss in 2023.
($1 = 1.5135 Australian dollars)
(Additional reporting by Nick Mulvenney in Sydney, editing by Michael Perry, Peter Rutherford)
