In the latest twist of the long running RWC '03 saga the Australian Rugby Unions have released a statement that condemns what it sees as 'ill-informed' attacks on the integrity of the ARU Board, its Managing Director and CEO.

The ARU's official website reported that they believe these 'attacks' have been based on misinformation, conjecture or a limited and distorted understanding of the bid and hosting process.

The ARU have released the following statement that they hope will clarify the issues.

The "Adventure Downunder" Bid for Rugby World Cup 2003.

When Australia submitted the "Adventure Downunder" bid for Rugby World Cup 2003 in 1997, it was on the basis that the ARU would be the Tournament host. Prior to the bid, the NZRFU accepted an invitation from the ARU to stage matches in New Zealand. As a result, the ARU and NZRFU agreed that each country would host two pools of 10 teams each, two quarter finals and a semi final. In addition, Australia would host the final and New Zealand would host the play-off for third and fourth places.

RWC 2003 was envisaged as one tournament, not two separate tournaments where the obligations and standards differ between the countries in which the tournament would be staged.

Prior to the bid the ARU and NZRFU agreed financial arrangements between them. Those arrangements took into account the terms of the invitation to bid which specified that the ARU as host, and any sub-host which was appointed by the host, would retain the net revenues from ticket sales but that all commercial rights to the Tournament would be fully available to RWC 2003 Limited (RWCL). The ARU and NZRFU agreed they would each keep the revenues derived from ticket sales in it's own territory, minus costs incurred in its own territory, with the ARU to recoup from the NZRFU a charge for the cost of certain central functions, such as technology.

The "Adventure Downunder" bid was also prepared on the understanding that the NZRFU would ensure that the National Provincial Competition in 2003 would be moved so it did not conflict with the Tournament.

Australia's offer to host both Semi Finals.

The financial arrangement agreed between the ARU and NZRFU prior to the bid remained in place until the second half of 2001. The NZRFU proposed a fundamental alteration to the split of net revenue in such a way that the ARU would substantially subsidise the part of the Tournament to be staged in New Zealand and through that subsidy, turn a projected loss for NZRFU into a surplus.

The ARU sought to negotiate a reasonable outcome with NZRFU under which the Tournament would be reconfigured so major matches generated greater revenue. Consistent with this aim and in recognition of New Zealand's inability to return a profit from the Tournament, the ARU offered to pay the NZRFU an $A18 million subsidy in return for both semi finals being staged in Australia.

This offer was rejected by the NZRFU.

Ultimately, the ARU agreed to a RWCL proposal that it provide a subsidy of $A10 million to NZRFU from the revenue generated by ARU from the part of the Tournament staged in Australia. That subsidy would have turned the loss projected by NZRFU into a modest profit and resolved their financial predicament. Coincident with this RWCL directed that the play off for third and fourth place be transferred to Australia.

Australia's Invitation to Host RWC 2003 on its own.

It has been alleged that the ARU has sought for some time to strip the NZRFU of the Tournament.

This allegation is without any foundation.

For its part the ARU committed to fulfil its obligations when it signed the Host Union Agreement (HUA) on November 21, 2001. This was after almost 18 months of tough and robust negotiation over many issues, none the least being the enhancement and protection of the Tournament's commercial rights for the benefit RWCL , its sponsors and licensees, and ultimately the game of Rugby globally.

During the course of the negotiations between the ARU and RWCL, the NZRFU received and commented on drafts of the HUA. The NZRFU received the final HUA shortly after it was executed by the ARU in November 2001.

The ARU was required by the HUA to sign the NZRFU as sub-host on the same terms and conditions as contained in the HUA. Under this arrangement ARU remained liable to RWCL for the conduct of the whole Tournament and the NZRFU would be akin to a sub-contractor.

The HUA also provided for RWCL to proceed with a course of action in the event the NZRFU and ARU did not enter into a Sub-Host Union Agreement (SHUA). That course of action included an option for RWCL to consider whether the Tournament should be held solely in Australia or solely in New Zealand.

The ARU and the NZRFU negotiated a SHUA under which the NZRFU accepted without qualification the obligations imposed under the HUA in relation to the provision of boxes and suites at venues, catering and other commercial rights.

On December 21, 2001, the SHUA was submitted to RWCL for approval prior to the parties executing it. That approval process was prescribed under the HUA. At that point, apart from clarification of one line item in the budget for the Tournament and certain taxation issues, the outstanding issue between the NZRFU and RWCL was the insistence by the NZRFU, contrary to its commitment prior to the "Adventure Downunder" bid being submitted, that it be free to stage the National Provincial Competition during the Tournament. This issue was not resolved until March 7, 2002.

In late January 2002, RWCL advised the ARU that draft of the SHUA was not acceptable and approval was declined.

On March 1, 2002, the ARU provided a revised SHUA to NZRFU for execution. Whilst different from the SHUA agreed to by the NZRFU in December 2001, the revised SHUA was on the same terms and conditions as the original HUA and RWCL had provided its consent to the ARU and NZRFU executing that document.

By this point, RWCL had made a number of concessions to the NZRFU, including some overlap of the NPC and RWC 2003, as well as the $A10 million subsidy from Australia. In light of the NZRFU's ongoing obfuscation, RWCL required the NZRFU to sign by March 8th, the revised SHUA.

NZRFU declined to sign the revised SHUA on an unconditional basis. In doing so, the NZRFU cited various objections to the delivery of boxes and suites at venues, catering and other commercial rights which were of such a serious nature as to necessitate amendment of the SHUA and departure from compliance with the terms and conditions of the HUA. None of these objections were included in the SHUA, agreed to by the NZRFU, which was submitted to RWCL for approval on December 21, 2001.

Recently, the NZRFU in its public statements cited advice provided by the New Zealand Solicitor-General that the NZRFU would have committed offences under New Zealand law if it signed the revised SHUA early in March 2002. This was apparently not an issue in December 2001 when the NZRFU was prepared to sign the SHUA though it is not clear what substantive issues changed during the intervening period.

The NZRFU was fully aware that if they failed to sign the SHUA by March 8th, then RWCL would pursue the course of action set out in the HUA, including consideration of a proposal for ARU to stage the whole Tournament in Australia.

It was NZRFU's choice to decline the invitation to sign the SHUA. The NZRFU chose to raise fundamental objections to commercial terms set out in the HUA well past the eleventh hour despite the fact it had been prepared to enter into a contract unconditionally accepting those commercial terms on December 21, 2001.

As a direct consequence of the above events, the ARU accepted an invitation from RWCL and made a presentation last week of a proposal for ARU to stage the whole Tournament in Australia on terms and conditions which comply fully with the HUA and which will deliver a vastly improved financial outcome for RWCL.

"Clean" Venues

During early March 2002, the ARU was the subject of an ill-informed attack regarding its ability to satisfy the obligations under the HUA to provide clean venues. That attack was led principally by the New Zealand Sports Minister, the Hon. Trevor Mallard.

Minister Mallard accused the ARU of signing the HUA knowing it would not deliver on its contractual commitment to provide clean venues in Australia for the Tournament.

Quite contrary to Minister Mallard's claims, on March 15th, the ARU completed negotiations with all proposed venues in this country to the effect that the ARU was now in full compliance with RWCL's requirement for 100% clean venues, including boxes and suites.

When the ARU and NZRFU agreed the "Adventure Downunder" bid in 1997, both parties had a clear understanding that they would need to provide clean venues, as was the case in previous Rugby World Cups.

The definition of "clean" and the RWCL requirements for boxes and suites under the HUA were abundantly clear to both Unions for many months.

Those definitions were present in the draft HUA which was in circulation some six months ago and again in the final version, which Australia signed on November 21st 2001.

The terms and conditions were again discussed in meetings between the two Unions held in December 2001, and again in February 2002.

The NZRFU was fully aware of all the terms and conditions when it was presented with a deadline to unconditionally sign the SHUA by 5.00pm (NZ time) on March 9, 2002.

Corporate Hospitality

The ARU has won the preferred bidder status for off site corporate hospitality for matches played in Australia during RWC 2003.

Under the HUA, the ARU was entitled to submit tenders for commercial rights, including corporate hospitality. On receipt of the invitation to tender, the ARU advised the NZRFU that it intended to bid for the Australian corporate hospitality rights and asked the NZFRU if they were interested in submitting a bid for the New Zealand rights.

The NZRFU declined on the basis that it was not greatly experienced and that a local company was looking at forming a consortium with the New Zealand provincial unions.

It was maliciously alleged that the ARU had won corporate hospitality rights inside New Zealand stadia, without the NZRFU being invited to tender. This suggestion was patently ridiculous and untrue.

It was further claimed that the ARU used its position as host to gain an unfair advantage over other tenderers. This too is untrue as the tender process was transparent and open and the Australian bid was considered on its merits.

Corporate hospitality is a core competency of the ARU which possesses an excellent knowledge and experience in the Australian market.

Summary

The ARU launched its bid for the "Adventure Downunder" in the spirit of partnership with the NZRFU.

It has never been the ARU's aim to host the Tournament on its own. The ARU respects the decision by the NZRFU to decline to stage Tournament matches in New Zealand on the terms and conditions demanded by RWCL.

But New Zealand's refusal to sign the SHUA set in train a series of events which has led to the current circumstances. The ARU has a contractual commitment to RWCL to stage the Tournament, whether it be staged in Australia and New Zealand, or solely in Australia. The important outcome now all the negotiation and commercial manoeuvring is played out is for a determination to be made.

The issue of compliance with RWCL's terms and conditions is not a matter for the ARU, which has complied, however on the basis that the NZRFU has indicated that it cannot comply, the ARU has been presented with an opportunity to become the sole host of the Tournament which we continue to pursue.

The ARU's overall objective throughout this time has been to preserve and enhance the integrity of the Tournament and Rugby.

Bob Tuckey
Chairman - Australian Rugby Union