Team foundations undermined by tax-deductible payments to star players

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Leaving the political and personal biases out of it, rugby followers – and players – are entitled to ask: WTF? Why is a high-performance fund-raising foundation, given tax-deductible status because it is meant to act in a broadly defined national interest, used to channel anonymous individual salary top-ups? What does it do to a team dressing room culture to know that some players receive these extra payments, not from general revenue like everyone else, but as specifically earmarked “philanthropic gifts”? Why does the Australian taxpayer have to subsidise these payments by approximately 50 per cent (a subset of a larger question about the tax-deductibility of donations to sporting ventures)? And what unseen strings are attached? Say what you like about Folau’s or Pocock’s or anyone else’s views, but should these be influenced through the financial arm of a high-performance “future fund”?

Topped up: David Pocock and Israel Folau.

Topped up: David Pocock and Israel Folau.Credit:AAP

Individual sponsorships exist in most codes, but they are transparent to the public for the good reason that they are exchanged for advertising. The NRL’s third-party agreement scheme attracts a lot of uncomfortable questions, mainly to do with its inherent bias towards one-city teams. But at least TPAs must be declared and registered, and at arm’s length from the clubs, or else those clubs will find themselves in big trouble. And the purpose of TPAs is by its nature transparent. Sunshine Daihatsu will only want to kick in a personal sponsorship to a footy player if he drives around in a Sunshine Daihatsu and plays in their corporate golf day and gives a speech at their annual dinner. And maybe shows up at the car yard once in a while. And stays out of jail. It’s advertising; its purpose is to be public.

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These rugby payments are the opposite of advertising. It was only through Robinson’s journalistic endeavour that they came to light. The payments were meant to be private and personal, akin to the old-fashioned patronage that used to have businessmen backing pro golfers to win bets for them. Secret patronage has a chequered enough history in individual sports, leaving aside the divisive effect it can have on team sports.

Why do I feel uneasy? It’s not a question of inequality. Everyone accepts that some players in team sports are worth more than others. It’s a question of transparency and control. Australian rugby representatives participate in a team sport where success relies on the strength of every link. That doesn’t mean everyone is worth the same or should earn the same. But it should be underpinned by an expectation that all players are paid under the same conditions, an income decided ultimately by the administrators of the game. Once a businessman says to Rugby Australia, I want to donate to you, but I want that donation to go to Player X – and it is understood that Player X will lose that donation if he upsets me – and also that the taxpayer fund half of my donation – does that not sound like a recipe for a kind of unfairness and capriciousness that goes beyond the legitimate inequalities of player income? Does that not sound like players whose surpassing value lies in the national jersey they wear – a symbol of the public trust that attracts taxpayer subsidy because it is a national not-for-profit property – are in some degree the private projects of private interests? When one player looks at his teammate on the field or in the dressing room, a fellow representative of their country, isn’t their sense of fundamental equality threatened by one of them being a pet project of a private benefactor? Likewise, is it entirely fair to the pet project that he has to toe his patron’s line, a line that does not have to be followed by, and is not even known to, his teammates?

It’s a fine line the code has to walk, especially one with well-publicised difficulties in attracting income from standard sources such as ticket sales and advertisers. Beggars can’t be choosers, and RA has obviously had to go to extraordinary lengths to retain its top talent. It has already been criticised for paying too much out of its own funds for these individuals. But it’s when a national body becomes cash-strapped that you have to look at its fundraising activities even more closely, and this scheme, which reeks of an unpleasant divisiveness at the level of the team, ought also to attract the attention of the tax office.

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Maybe the majority of rugby followers see nothing amiss. Maybe they are desperate (or cynical) enough to accept any money, from any source, with any strings attached, no matter what the effect on team morale or individual morality, as long as the money is still coming in and stopping the best players from leaving for better-paid work in Europe or Japan. Maybe everyone else is doing it, so it’s all right. Maybe the Australian taxpayer is happy to reimburse these ‘philanthropists’ for half of their donations. But it seems an abuse of a “foundation” with worthy and legitimate aims for the game at large if it becomes a channel for private arrangements. If donations come with private conditions and aims – which RA stridently denies in this case – then they are not donations, they are patronage for which the national jersey is merely used as a cloak of respectability.

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