Sydney clubs will continue to receive national support, through a new system, the ARU says © www.seiserphotography.com

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The Australian Rugby Union is developing a new national funding model as it moves to change the way it invests in, and administers, the game. The union is moving to implement a model whereby every rugby player in Australia will pay an individual registration fee and insurance levy in an aggregated system similar to those already in place in Queensland rugby and in other mainstream participation sports including soccer, basketball, hockey and netball.

The ARU attracted widespread criticism recently in the wake of reports that it was "cutting funding" to Sydney's Premier Rugby competition, the 12 Shute Shield clubs stating in a leaked letter to union chairman Michael Hawker that "the perception is that the ARU has abandoned community rugby, electing not to fund grassroots rugby while continually introducing new programs requiring a substantial commitment of time, resources and funding from the participants".

The reports struck a chord, primarily, because the ARU is documented to be in severe financial difficulties. Union chief executive Bill Pulver said at the launch of the inaugural National Rugby Championship that Australian rugby was "going to hit a wall at some point" given the "financial trends we have", while Greg Growden reported exclusively for ESPN in October that "a presentation at the ARU annual general meeting … explained that an 'unsustainable business model based on periodic windfalls' and diminishing revenue was 'leading to insolvency in 2015'."

The angst of clubs was magnified by the fact that they each had to pay the $A25,000 to the ARU in order to participate in the NRC franchises, with former ARU chief executive Gary Flowers, the North Harbour Rays chairman, noting at a Rugby Business Network function in Sydney during November that franchises had operated at a substantial loss in the inaugural season.

David Mortimer, president of Shute Shield powerhouse Sydney University, agreed with a suggestion that Sydney's clubs perceived the ARU was an organisation in trouble trying to save money, and the clubs were an easy target. "That's a pretty accurate assessment, not that I'm privy to their decision," Mortimer told ESPN. "It's a logical conclusion to arrive at." Parramatta president Brian Blacklock, whose club has the smallest budget in Sydney Premier Rugby, told News Corp that "we just feel we are being abandoned" while Warringah president Phil Parsons said the ARU didn't know how the clubs operated. And Tony Crawford, president of Northern Suburbs, told ESPN that the Sydney clubs were concerned by "the 'key issue' of the absence of a statement from the ARU about their long-term vision or even a medium-term vision for club rugby at our level and grass roots and community level in particular".

But the ARU denies the clubs are easy targets being abandoned or short-changed, telling ESPN exclusively that it has "not ceased funding premiership club rugby, but has transitioned from funding clubs directly to funding member unions".

The member unions, an ARU spokesperson told ESPN, would "be responsible for managing the funding and development of clubs in their respective state or territory".

The unions then will make bespoke strategic investments to develop the game according to their own needs, with funds available to all levels from the top tier through Premier Rugby to junior clubs, schools, and community coaching programs.

"Decisions about the level of funding invested in premiership club rugby in a particular state or territory will be made by the respective member union," the ARU spokesperson told ESPN.

Clubs each paid $A25,000 to be involved with a National Rugby Championship franchise © Getty Images

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Sydney's club presidents recently received a letter from the New South Wales Rugby Union outlining the incoming fees and levies, which will vary from state to state, saying "the National Participation Fee … will apply to all rugby players, replacing the team levy introduced by the ARU last year".

"The fee [in New South Wales] in 2015 will be $A33.00 for seniors; $27.50 for juniors; and $11.00 for minis (including GST). This equates to $2.00 per game for senior and junior players based on a 15-game season. [The] National Insurance Levy will also go to an individual fee, rather than a team-based premium. The Insurance levy in 2015 will be $75 for seniors; $8.00 for juniors; and zero for minis. The [levy] is based on a team comprising of 23-30 players. Clubs with more than 30 players per team will receive a rebate from the insurer."

The ARU spokesperson told ESPN: "This individual registration fee will go directly to state and territory unions to support the administration, development and growth of the game at the local level."

The state and territory unions will also receive 'National Strategic Growth Funding' "to invest in community rugby aligned with national objectives".

"This new funding model is a simpler and fairer way to distribute costs across the game and ensure state and territory unions can continue to foster and grow rugby at a local level."

Mortimer, meanwhile, said the reduction in ARU funding to the clubs from $A100,000 in 2009 to $28,000 in 2014 ahead of the changed system in 2015 had "forced [Sydney University] to raise more money … we can't rely on the ARU because they've got their own problems".

Mortimer described University as a "proactive club", saying: "We've said 'there's a problem, let's address it'. We still have some big funding commitments and they're not going to go away, and we'll get less help from Headquarters. Just get on with finishing a solution; that's what we've done. We'd like to have some more money from the ARU. We'd like to be able to retain what they already gave us. But it has resulted in us saying 'if you can't control it, you can't control it and you get run over in the race, just get on with finding a solution'.

Crawford said that Norths believed they needed "a revenue budget of $A600,000 to put on a first-class rugby program" and "our current budget, or at least our expectation, is somewhat less than that but that's our aspirational goal".

Mortimer accepts that University is, perhaps, better placed and connected than some of their rivals to seek sponsorship from the "top end of town" in order to become self-sufficient, especially given that the ARU and the Super Rugby franchises limit the clubs' access to the profile players who draw crowds and create headlines and wider interest in the game, such as Israel Folau, who is yet to feature for the Blue and Gold since commencing his meteoric rise to rugby stardom.

"They've taken the internationals away, and it's hard to get the Super 15 players to play … and like all sports you do need the experience with the inexperienced players to be playing side by side to develop enthusiasm and education," Mortimer said. "And that [also] stops the crowds from coming, the absence of the highest-calibre players, because the fans want to see the highest-calibre players."

Crawford said that "every dollar counts" but "the clubs "appreciate the ARU has their backs to the wall from a financial point of view", a comment with which Mortimer agreed.

"It's a tricky one," Mortimer said. "But the ARU has just got to generate some more revenue."