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Embattled Rugby Australia has been delivered another blow after major sponsor Qantas ended its 30-year partnership with the code.

The Australian airline has also pulled its cash sponsorship deals with cricket, football, Olympic and Paralympic sport in a bid to save up to $20m a year, although in-kind arrangements would continue.

Qantas said the impact of the Covid-19 pandemic was the reason behind the rugby decision, rather than last year’s Israel Folau controversy.

Folau’s homophobic social media posts raised questions over the continued involvement of Qantas, whose chief executive Alan Joyce said at the time that sponsorship deals were “supposed to be a positive”.

But on Wednesday Qantas chief customer officer Stephanie Tully said the virus had been “the undoing” of the partnership, which will expire at the end of this year.

“In an environment where thousands of our people have lost jobs and thousands more are stood down while they wait for flying to restart, we can’t maintain these sponsorships in the way we have in the past,” Tully said.

“While we’re dealing with this crisis and its aftermath, the cash cost of our sponsorships has to be zero.

“Without exception, our partners have been incredibly understanding of the situation, particularly as most are facing their own Covid challenges.

“Qantas has had a very long association with Rugby Australia and the Wallabies, and we’ve stuck with each other during difficult times. Unfortunately, this pandemic has been the undoing.”

Qantas has been the official airline of RA since 1990 and in 2004 took on the official naming rights of the Wallabies. It also supports the men’s and women’s rugby sevens teams as their naming rights partner.

RA’s interim CEO Rob Clarke said losing Qantas as a partner was “disappointing” but “understandable”, given the current economic climate.

“There aren’t many 30-year partnerships in Australian sport, and I want to thank Qantas for everything they have done for our great game,” he said.

“Alan [Joyce] and his team have been transparent and collaborative in their discussions with us and they have now given us the opportunity to prepare for 2021 and beyond.”

The withdrawal leaves RA searching for a new sponsor during one of the most turbulent periods of the code’s history.

The game was struggling in a crowded local market even before the pandemic hit, and uncertainty remains over the game’s broadcast deal, which is due to expire at the end of the year.

The decision comes amid intense financial pressure on Qantas due to sweeping state and international travel restrictions that have devastated the entire aviation industry.

Qantas last month announced a $2bn loss, driven mostly by the cost of making workers redundant due to the coronavirus pandemic and sweeping write-downs of the value of its fleet of planes, which remains in large part grounded.

Its total borrowings have soared by more than $1bn after it borrowed more money to help get it through the aviation sector’s lean times.

Rival airline Virgin Australia, which has just ended a spell in administration after being driven to the brink of collapse due to the pandemic, continues to sponsor the AFL.

The deal is reportedly worth between $5m and $10m a year to the code, and was thrown into doubt when Virgin Australia’s board put the airline into administration in April after it was refused a government bailout.

However, earlier this month Virgin Australia was formally taken over by a new owner, US private equity group Bain Capital.

Qantas will continue to deliver in-kind arrangements, such as the provision of official flights, for Cricket Australia, Football Federation Australia, the Australian Olympic Committee and Paralympics Australia for at least the next 12 months.