Former All Black skipper David Kirk led the arbitration process © Getty Images

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Tournaments/Tours: Super 14

Teams: Australia | Melbourne Rebels | Rebels | South Africa

After a drawn out process SANZAR has announced that the 15th Super Rugby side will be located in Melbourne.

The decision proceeded to arbitration after the three member unions, New Zealand, Australia and South Africa, were unable to find a unanimous decision between the Melbourne bid and a bid from the Port Elizabeth-based Southern Kings.

A panel, led by former All Black skipper David Kirk, decided that while the bid from South Africa provided a strong business model and rugby tradition the financial benefits offered by the Melbourne bid could not be ignored. The Kings also offered a better playing base and readiness than Melbourne according to the panel, although Australian Rugby Union (ARU) chief John O'Neill disputed that finding.

The Melbourne side will join the newly-formed Australian conference, meaning money-spinning derbies against the Waratahs, Reds, Brumbies and Western Force. Also, sales of broadcasting rights to Australasian broadcasters would be reduced by US$15-20m over the course of a five year agreement had the Kings been granted the franchise.

The franchise will have an international feel, with the door open to foreign players. The ARU are also keen to avoid talent poaching within Australia.

"It's a big relief, the process has been quite a long one and clearly going to arbitration was not without risk," said O'Neill. "So it's essentially great relief. We think it's the correct decision for SANZAR and Super Rugby in particular, but for Australian rugby it's a massive step forward.

"It gives us a fifth team in Melbourne, it provides us with a truly national footprint. From the start of Super 10 years ago when we just had two teams, three teams in 1996, four in 2006 and now five. So we're in Brisbane, Sydney, Canberra, Melbourne and Perth so the opportunity for the growth of the game - particularly around professional players, up to 150 professional players will be contracted.

"And as for Melbourne it's a massive market, one of the truly great sporting capitals of this world and we'll have a foothold there from a broadcasting, sponsorship, fan-base and growth of the game. I think it's a win for Australian rugby but I think it's good for SANZAR, it gives the competition a new dimension.

"For the quality and the functionality of the tournament - it only made sense to go for Melbourne. You would have had six teams in South Africa, four in Australia and five in New Zealand. It was a lack of balance and the overhead goes up automatically when you cross the Indian Ocean and it lacks local derbies."

Speaking ahead of their Grand Slam meeting with Ireland, Wallabies coach Robbie Deans and captain Rocky Elsom hailed the decision, highlighting the position flow on effects for Australian rugby.

"It can't help but help Australian rugby. It's a fantastic outcome. The profile of the game will just escalate," Deans said."You've got rugby across the calendar year. You've got not only rugby, but local derbies, domestic rugby. Those two points alone are enormous. Easily said, but huge value.

"It's more top-end rugby and the reality is that players tend to be as good as the competitions they come out of and we've now got a top-end competition that will run from the start of the year to the finish. You can't better that to put us on a level pegging."

Elsom said: "It's a big win for all parties. It's really important to have another team and I can't see too many down points of having a team in Melbourne."

Victorian Rugby Union chairman said it was a landmark moment in the history of the sport in his state.

"At the end of the day, we (Victorian rugby) are 100 year's old and we've waited 100 years for this day," Gray told Fairfax Media in Australia. "This is the greatest opportunity for Victorian and Australian rugby to further develop so many people have wanted this and have now been rewarded."

South Africa Rugby Union president Oregan Hoskins said his organisation was duly disappointed, but understood that the commercial benefits of a fifth Australian team were too lucrative to pass up.

"We are extremely disappointed that the Southern Kings were unsuccessful but this process has proved that the region is ready for a franchise and that it could be up and running from an operational point of view in a very short space of time," Hoskins was quoted as saying on Planet Rugby.

"The Expert panel expressed the opinion that the Kings' Bid was superior in organisational and rugby terms but we could not overcome the fact that there was a potential loss to SANZAR of TV revenue of the order of R137m over five years from Australian broadcasters.

"This is a binding decision and we respect and accept the verdict of the experts and thank them for their work - but this is not the end of the road of the Kings."