Remember this time last year, when we could all leave the house and the biggest news story was about Israel Folau being kicked out of Rugby for being a homophobe? Simpler times. Anyway, turns out that coronavirus might actually mean Israel Folau doesn’t get his full payout.
The news about a settlement being reached between Israel Folau and Rugby Australia came through in December (I know, it feels about a million years ago now), and although the exact details were never made public, it was reported he’d be paid roughly $3 million. He was going for $14 million originally.
The payments are reportedly being paid off in instalments, which was a great idea when everybody had money and a stable job. Thanks to COVID-19, that’s not necessarily the case any more, and sport has been hit particularly hard.
As of last week, Rugby Australia has stood down about 75% of its workforce outside of the players, and have announced a $9.4 million loss. The CEO, Raelene Castle, is taking a 50% pay cut for the year.
Bottom line is that, like almost everyone else at the moment, Rugby Australia is really struggling financially. To the point that there’s a chance they could go totally broke within three months.
So back to Israel Folau, what happens to him and his payout if Rugby Australia runs out of money and declares themselves insolvent?
Well, he’d be declared an unsecured creditor and could end up with far less money from the payout than was originally agreed. There are some legal factors like assets that would come into play, but again, we don’t know the specifics of the settlement.
Rugby Australia are doing their best not to go totally broke, but with nobody quite sure what the future holds at this stage, it’s a very real possibility.
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