#wallabies

Raelene hands back the keys to the Castle

The Giteau Law will be reviewed in 2019. Photo: Getty Images

Rugby Australia’s (RA) board losing faith in CEO Raelene Castle was inevitable. We have long held that RA’s leadership team had no rudder.

FNF Media has openly criticised the lack of performance as its biggest failing – from the ridiculous state of affairs where management had no relationship with the head coach of the core franchise to the focus on “woke” causes which alienated fans (aka core customers). Folau’s saga and broadcast rights could have been handled far more sensibly. They weren’t.

Let’s be clear. COVID19 was a catalyst, not the cause.

Any business must adapt to transitions in the marketplace but never for the sake of chasing popular causes which have little or nothing to do with core competencies. That is where RA went wrong.

Castle commented,

I love rugby on every level and I will always love the code and the people I have had the honour of working with since I took this role…I made it clear to the board that I would stand up and take the flack and do everything possible to serve everyone’s best interests…

“…In the last couple of hours, it has been made clear to me that the board believes my no longer being CEO would help give them the clear air they believe they need…

“…The game is bigger than any one individual – so this evening I told the Chair that I would resign from the role I will do whatever is needed to ensure an orderly handover. I wish the code and everyone who loves rugby nothing but the best and I would like to thank the people I work with and the broader rugby community for their enormous support.

We believe that a fish rots from the head. The lack of decisive crisis management talent has led to this situation. Ultimately the ‘customers’ deserted in droves. We tabulated the differences between the management of RA vs our rivals across the ditch.

RA needs a new leader who has grown up in the game. Who understands the customers. Who understands the investment required at the junior and club rugby level so the professional side can incubate talent. To get to a stage where the regular local competitions don’t lose players to overseas leagues that have ended up hollowing out the ability to run sustainable club competitions.

The new leadership team can start by removing/demoting any staff in positions of authority who laid down threats of walking if Castle was pushed. There is a distinct difference between issuing ultimatums and raising dissenting voices during crises. RA doesn’t need any more poison during a rebuild.

Produce the right product and the fans will return. It’s that simple.

ACF hires alarmist MCCCRH to sledge Cricket Australia for inaction on climate change

A Monash Climate Change Communication Research Hub (MCCCRH) study commissioned by the Australian Conservation Foundation (ACF), urged Cricket Australia (CA) to use its popularity to push for greater climate action and do more to look after player and spectator welfare. Hardly an impartial voice to undertake a study when MCCCRH states that it “conducts social research and leads impact focused projects to build media and policy infrastructure that adequately addresses climate change in Australia.”

The ACF campaign director, Paul Sinclair, said, “Cricket Australia should stop being silent and being a spectator on climate change. It should get in the game and be a climate champion for action to cut pollution from coal and to get onto clean energy.

Can the ACF tell FNF Media how many fans think about climate change as they head out to watch a game? It would seem by the sheer length of the beer snakes produced in Bay 13 at ‘The G’ that fans know how to keep well hydrated during play.

Perhaps the ACF should encourage CA to admonish the likes of Steve Smith who carries 10 cricket bats in his kit. Surely allowing New Balance to fell so many willow trees to enable Smith to indulge such a privilege is in direct violation of the UN Sports and Climate Action Initiative (UNSCAI) to reduce the carbon footprint in sports. Note CA has not signed up to this UN compact.

Perhaps ACF should request the air travel intensive Big Bash League (BBL) be banned to save the planet?

Perhaps Kookaburra needs to stop using leather in cricket balls? What do we make the stumps from? Plastic, aluminum? No good. Bamboo?

The ACF couldn’t resist a sledge at CA for having fossil fuel company, Alinta Energy, as a prime sponsor. ACF gave CA stick for having Marsh & Lloyds as commercial partners given they have plans to insure the proposed Adani coal mine. Why hasn’t the ACF slammed Rugby Australia for having Qantas and Land Rover as sponsors for the Wallabies?

In addition to its failings for not signing up to UNSCAI, CA was also criticized for declining to answer with respect to supporting Australia to be a net zero GHG polluter by 2050. It also failed to answer whether it supported turning Australia 100% renewable or whether CA had plans to transition to 100% renewable power itself. CA even copped flak for not recording the number of days abandoned due to extreme heat. Probably because the number is so minuscule, if any that no such records need keeping.

Which begs the question, if the science is so settled, why is it imperative for the ACF to shame CA for non compliance to their religion? We have already seen bodies with absolutely no climate scientific pedigree sign up and make public statements about the dangers of inaction on climate change. Based on what exactly? Is this how consensus is formed? Through group think based shaming which is disproven by the data?

The Australian Medical Association (AMA). It has little professional clue about the climate yet it pushes the narrative even though the far bigger worry should be the percentage of doctors abandoning the organization in droves because of the stance. Our Reserve Bank as well as regulators APRA and ASIC are on board pontificating about global warming, despite corporate Australia, by their own studies, showing less commitment. Such is the trend against climate alarmism by listed corporations, it seems regulators feel the need to dial up legislation to force adoption so it can get more funding to play Big Brother.

The ACF’s true colors come out in the pull quote on p. 18,

It is conceivable that directors who fail to consider the impacts of climate change risk for their business, now, could be found liable for breaching their statutory duty of due diligence going forwards.”

There you have it folks. Lobby for a change in the Australian Corporations Act. Let’s make sure that CA directors can be hauled over coals (no pun intended) for not using a carbon neutral yacht to transport players to the next Ashes series in the UK.

Don’t laugh, the International Olympic Committee and UN argue that, “Sport is not just a victim of climate change; it is also a contributor, through greenhouse gas emissions.

C’mon CA! Ban all merchandise. Tell off KFC for giving fans paper buckets to put on their heads every game. Think of all that virgin pulp that will end up in landfill. No more interstate or international games unless players can be carbon neutral. No more day/night matches unless the light towers are 100% renewable. Players can only have two bats to share between them.

In closing we should cast great doubt over Monash University’s ability to be impartial. The institution’s alarmist climate credentials are well documented.

Recall Monash University made up c.20% of the academics who signed an open letter in support of the lunatics of the Extinction Rebellion. We showed that most of those academics came from fields such as stand up comedy, poetry, arts/education, sports management, archaeology, LatAm studies, sex, health and society, social services, veterinary biology, culture, gender and racism. Few from actual climate science fields. We even proved that Matthew Flinders, who died in 1814, was a signatory to the same open letter, proving once again that alarmists are very poor at policing things that damage credibility. It is all about the number that sign, regardless of background.

Hopefully CA has a jolly good laugh and tells the ACF that it will happily comply as long as the ACF guarantees to offset any lost predicted revenues due to the ACF’s dud prophecies. Perhaps CA should simply ask the ACF why the IPCC admits within its own research (not the summaries written by politicians that hypes the panic and fear mongering) that 98% of the models it uses grossly overestimate warming.

CM says a big thank you

CM honestly reads such headlines and breathes a sigh of relief. No greater service to humanity could they fulfill.

CM also hopes that the retired Wallaby can sleep at night now he doesn’t have to wear a uniform emblazoned with the logos of two giant users within the fossil fuel world – Qantas and Land Rover.

Which begs the question, why didn’t Pocock rush straight to Wallabies CEO Raelene Castle and demand that she jettison these brands from the sponsorship list? How could he have put a lucrative salary ahead of the environment for all of those years ?

The right thing to do would have been to force the Wallabies to play exclusively at home only to teams that sailed to compete against them and only during hours of daylight.

That is how proper virtue signaling is done.

Rugby Australia chokes on its own incompetence

IZZY.png

After exchanging a politically correct, vomit-inducing and nose-bleedingly insincere prepared statement drafted by professional media consultants -not lost on anyone – the fact remains that Rugby Australia (RA) is the loser in the Israel Folau saga. We can forget the original source of the dismissal and the rights and wrongs of it. If RA thought it had a proper case, the legal fees (which it claimed were worth saving and settling out of court) would have been way less than the $10m payout he was demanding. So much for supporting the very communities the RA plasters all over its website.

The outcome was the result of management incompetence in thinking that appearing woke trumped legal due process. In full knowledge that Folau had a $1.6mn war chest (courtesy of Christians, free speech advocates and rugby fans alike) to take up the case against his former employer, the board was forced to buckle and issue an apology to the former rugby star, which would never have been necessary if it had a smidgen of judgment in the beginning.

RA CEO Raelene Castle can laugh off “wildly inaccurate” speculation on the $8mn rumoured settlement but the fact is the board knows the exact amount. Israel and Maria Folau wouldn’t have been grinning like Cheshire cats were he to have signed away for less than his rescinded contract. It will be fascinating to see the composition of the 2019/20 reported figures that will be published in due course. Expect some accounting trickery to fudge it into the numbers.

Castle said a few months back that the franchise could weather paying out Izzy Folau’s $10m claim. Although CM is not sure that paying out $10m + costs – which would wipe out almost 2/3rds of the $18mn in cash on the balance sheet – is something a CEO should think is worth boasting about. What she has long needed to focus on is arresting the declining operating performance. Yet she stated emphatically that the RA won’t have to make changes to the budget. Maybe her lawyers pieced together a multi-year drawdown of the sum to be paid to smooth out the ultimate impact. 

The RA franchise is the laughing stock of the rugby world. So transparent is the lack of accountability, woeful internal coordination and deteriorating financial results that it requires nothing more than a drastic overhaul if the entity is to thrive.

Former coach Michael Cheika let loose that it was no secret he had no relationship with the CEO and a very poor one with Chairman Cameron Clyne. This coming from the very individual running by far the biggest RA franchise. Despite possessing by far the worst performance record of any Wallabies coach, management persevered with a man who didn’t have a leg to stand on but cast aspersions on the executive team.

Therein lies the problem. RA can push all of the woke causes (e.g. LGBTQI+, gender equality) it likes, but if the ultimate end customer derives no value from it, it is a fruitless exercise which can’t escape the scrutiny of the free market come time to pay bills.

Castle may believe that this was a commercial decision for the sake of providing certainty. Had she done the right thing from the start she could have avoided getting embroiled in a scandal that has exposed the poor governance within.

Isn’t it odd that the LGBT activists are now attacking the very institution that set out to promote them – RA. CM has never thought much of his tweets but the reaction to them has been so over the top. The faux outrage mob finds oppression in everything.

Castle should resign and if she won’t the board should fire her despite her defiance against the bleeding obvious – she is in over her head. Fans won’t return with the status quo.

Get woke, go broke.

Harley Davidson sneaks in a 50% cut to future hoping no one would spot it

Harley-Davidson’s (HOG) Q3 results continued the poor run. Declining global unit sales and 30+ day delinquencies plus annualized loss experience are at 9-year highs. The company sneakily halved its outlook on plans to cultivate its rider base which further shows the management is clueless and running out of options. It smacks of desperation.

Shares bounced almost 10% on the numbers. The funny thing is that quarter after quarter, the earnings releases read like Groundhog Day. Of any positive news, international ended up slightly positive (+2.7% for Q3, -3.9% for 9M) but were was still below expectations). Japan was cited as a positive. Then again Japan sales are 40% below the peak and have been dwindling for 10 years. Australia was ok but EU weak.

Only two thing worth paying attention to in these results.

1) Targets

For the last few years, HOG has been banging on about how it will create 2 million “new” US riders into the Harley fold by 2027. Indeed CEO Matt Levatich was adamant on the conference call that “the team is laser-focused on building riders today and preparing us and our dealers to welcome a broader array of new riders moving forward.” Typical bluster.

Levatich must be using lasers from The Dollar Store given their accuracy to date.

In Q3, HOG has shifted that language to 4m total riders in the US by 2027. It currently stands at just over 3m. So that 2m new US rider target has effectively more than halved but no explanation for the change was given which proved CM’s hunch. It was snuck in. HOG management said “we’ve done the math“. CM would argue, “what, so you hadn’t done it properly beforehand?” This only reveals the ineptitude within management ranks. Instead of investigating where the problem is needless share buybacks are continuing at a heady clip. $112.5m for the quarter.

CM has written in the past sets of results,

HOG’s 2mn new riders in the US by 2027 seems an irrelevant target. 200,000 “new” riders per year by definition should not include existing customers. Management combine new and used sales using IHS Markit Motorcycles in Operation (MIO) data, not their own! That is fine if all are new Harley customers yet the brand has some of the highest loyalty rates of any maker period. Are we to believe that long term Harley owners didn’t upgrade?

Of the 138,000 new domestic US sales in 2018, the brand assumed 278,000 new riders to the family. It also cites that 50% of that were 18-34yo (implies poorer product mix), women (smaller capacity hence poorer product mix) or ethnically diverse (irrelevant) riders. So by definition at least 140,000 sales were used bikes. Harley used bike sales in America are around 2.5x new, or 350,000 units. So assuming half were new customer sales for new bikes, 60% of used sales must have been to ‘never owned a Harley’ customers. Seems high.”

Yet Levatich continued in the conference call by saying,

guiding all our efforts is deeper analysis and insights on why people engage, participate and disengage from riding. Our advanced analytics capabilities and rider migration database has evolved into a powerful asset and a wealth of information and inspiration for us.

But Mr Levatich, HOG unit sales and revenues have been in retreat for 5 years in a row. Sure, motorcycle markets are tough but it hasn’t affected other premium makers BMW Motorrad, KTM, Ducati and Triumph at the luxury end. HOG sounds a bit like the Australian Wallabies. Lots of positive talk despite overwhelmingly negative signals, results and glaring problems with the management structure. It is time to wake up. HOG is missing the simplest of things – product that customers want.

This is a company that continues to rely on its 116-yo divine franchise. Basing its future on what seems to be a marketing company puffing up fanciful predictions in the face of a dire outlook. The worst thing about it is that management is in denial.

2) Finance

HOG is the ultimate discretionary spending item. Doesn’t seem that they are spending at HOG. If anything, the financial services business shows current customers are struggling to pay their loans. An interesting anecdote from Polaris (PII) Q3 results overnight was the claim that its Indian brand (which competes directly with Harley) admitted,

North American consumer retail sales for Polaris Indian motorcycles decreased mid-teens percent during the third quarter of 2019 primarily due to the weak mid to heavy-weight two-wheel motorcycle industry that was down high-single digits percent and retail pressure from heavy competitive promotional spending.”

If HOG is cranking up the finance and promotional spending shouldn’t investors be wary of a further deterioration in the types of customers they are lending to? When CM covered HOG as an analyst 20 years ago, the then management told CM that Harley owners would forgo the mortgage before payments on the bike, such was the rock-solid nature of the finance arm.

No, HOG’s loan book is unlikely to bury it but the signals are such that it is having to resort to pushing so much harder to make sales. That is evidence of a soft backdrop which management is not being open and transparent enough about.

HOG fortunes are bound to get a lot worse before they get better. The hopes and dreams of the delayed electric LiveWire e-bike is too expensive to attract eco-mentalist millennials and completely unattractive to overweight bearded men covered in tattoos to desire. Harleys were always an escape tool. Products where owners could hide away in the man cave tinkering. That isn’t to say that Harley doesn’t need to innovate but at the moment it isn’t staying true to itself. That is why customers are disengaging.

Expect the 2020 numbers to follow the trend of the last 5 years. An utter disaster.

NB this piece does not constitute as investment advice. CM has no positions in HOG.

I have no relationship with the CEO & not much with the chairman

Doesn’t this speak volumes? As Australian Wallabies coach Michael Cheika announced his resignation he let loose that it was no secret he had no relationship with the CEO Raelene Castle and a very poor one with Chairman Cameron Clyne.

How could it be that top management had no rapport with one of the most senior line managers of the flagship product? Is it any wonder the Folau debacle got to where it is? Incompetence reigns supreme.

For a leadership team that bangs on incessantly about inclusion, diversity and cohesion, Cheika’s remarks show how loose the grip was on the very people that needed to be the flashing beacon of the very institution Rugby Australia (RA) proclaims it instills. Where was the partnership?

Time for rebirth. The fans just want a winning team and to achieve that communication between the upper echelons of management and staff is key. As it stands it isn’t hard to fathom that there is next to zero at present. Hence why RA’s results (financial and game) are as abysmal as they are

For Cheika to launch a parting shot of that kind doesn’t smack of professionalism but at the same time it is probably the most truthful expose of the inner workings of the RA cabal.

Toxic employees are bad for any business. In most cases the resentment in the ranks coming from management’s tolerance of people who let poison fester within the workplace only worsens performance of the core. Eventually political cunning gives way to results that doesn’t match the bluster. The question is whether RA can be exorcised quickly enough to enable a proper healing? Given the insistence on being woke, that looks unlikely.

The values RA uphold may seem wonderfully progressive in theory but surely as a body seeking to uphold the pinnacle of sports and sportsmanship it should strive to understand where the future lies for the franchise. It isn’t yearning for diversity or participation prizes. Best look across the ditch for inspiration as to why the All Blacks are so strong. Just read their objective #1: to stay on top of the world. CM guesses NZ coach Steve Hansen has a wonderful bond with his board. You can’t fool kids who lose 100-0 that they played well either. Best start with grass roots that embody the spirit of competition. Embrace it. Then watch the fans flock back to the game.

Virtue Signaling Wallabies should look at their sponsors before lecturing the rest of us on climate change

Pocock.png

Wallabies flanker David Pocock, along with teammates Bernard Foley and Dane Haylett-Petty, have announced their partnership with a scheme that aims to compensate for the carbon emissions associated with travel. Woke.

Why aren’t they rushing straight to Wallabies CEO Raelene Castle and demanding that she jettison Qantas & Land Rover from the sponsorship list? Surely offsetting carbon emissions is best served by trying to get widespread media coverage to push legislation to ban petrol & diesel SUVs and restrict air travel.

Surely what better way to announce one’s true commitment to the climate emergency than refusing to endorse or play for a team where the very companies that violate the climate change movement’s goals are emblazoned on their sportswear? Sadly multi-million dollar contracts are clearly more important to these players to protect than saving the planet. Telling.

The Guardian noted, “musician Heidi Lenffer, from Australian band Cloud Control, launched FEAT. (Future Energy Artists), an initiative that would allow Australian musicians to invest in a solar farm in south-east Queensland…Lenffer was concerned about the carbon emissions generated by her group’s touring schedule and what she saw as her own contribution to the climate emergency.”

Notably, Lenffer had asked “climate scientists in the field, and connected with Dr Chris Dey from Areté Sustainability. Dey crunched the numbers for Cloud Control’s two-week tour, playing 15 clubs and theatres from Byron Bay to Perth…He found that it would produce about 28 tonnes of emissions.

28 tonnes of emissions in an Aussie context would equate to 0.00000509% of Australia’s emissions which are 0.00001345% of the earth’s atmosphere. So the global carbon footprint of her Byron to Perth tour would total 0.000000000068473%. Offsetting that will hardly be worth the efforts gone to working out the impact. None. She should double the scope of the tour and it would have no meaningful damage on the climate.

Carbon offsetting is such a wonderful idea. It essentially takes the form of commercialising hypocrisy. Effectively offsetting one’s emissions is like asking someone else to quit smoking on your behalf. How do you benefit? Don’t forget that Sir Elton John justified Meghan & Harry’s use of his private jet by offsetting on Carbon Offset which allowed him to technically pay for those emissions for the grand price of £8 return for the couple. Pocock’s trip to Japan would cost £38.70 return. That will be enough to pay for a sign to hang on the front of the FEAT solar plant.

Lenffer shouldn’t feel bad though. Climate alarmist, Bono of U2 once bragged that one of his global tours beat out The Rolling Stones in terms of trucks and 747s used to ferry all the equipment around because that’s how you measure a band’s popularity!

Maybe the players should strike in Japan and superglue themselves to a steel plant in Kobe. They best be careful, Japanese police can lock them up without charge for 21 days. They might risk missing the finals…surelythey wouldn’t want to put their careers behind their sanctimony.

If they still have pangs of guilt they can look up Extinction Rebellion’s guidelines for hypocrisy. Apparently it is justified in their view because they want the changes but have little choice but to consume in a fossil fuel world.

NZ Rugby vs Rugby Australia – the franchise stats

Well, well, we’ll. Who’d a thunk? NZ Rugby (NZR) is focused on the game, not appearing to be woke. Is it any wonder Australia are unlikely to win the Bledisloe Cup for many more years to come. The investment NZR pour into the All Blacks swamps Rugby Australia’s (RA) pittance into the Wallabies because sponsors and fans see the Kiwi franchise for what it is – a united team of winners with returns!

It shouldn’t surprise us when RA & NZR reveal primary objectives.

Objective 1 in the NZR 2018 Annual Report is “REMAINING ON TOP OF THE WORLD” (p.18)

Objective 1 in RA’s 2018 Annual Report is written as, “For rugby to continue to be a sport of choice in a rapidly changing society…community coaches are responsible…for creating fun, safe and inclusive environments” (p.10).

With that RA mantra, NZR is faced with a longer term dilemma. Because the fans might have to consider they might “get tired of all this winning!”

In all seriousness, NZR should seek to form a new version of the Bledisloe with a worthy adversary in Europe because the Wallabies will drift even further away from being competitive with RA focused on such utter malarkey.

Or to even it up, perhaps the All Blacks under-18s should play the Wallabies?

So why the gap? The numbers between the two are as follows.

RA took in approximately A$30m in licensing and sponsorship last year. NZR raked in A$65m. More than double for a country with one-fifth the population. Think about it. The advertising base is smaller yet the sponsors must see the returns as superior to do so.

Total revenues for RA sum to around A$110m. NZR takes in A$182m in 2018.

Match day revenue for RA reached A$20m last year. NZR collected A$28m.

Total assets for RA sum to A$69m. NZR total assets are A$183m. Total equity for RA is A$27m vs NZR at $99m.

Just looking at financial metrics alone, RA is not going to rebuild this franchise without focusing on what NZ already knows. The business has one sole focus – the pride of a nation.

Should we be surprised that Eden Park has been sold out every game since 1962 when the All Blacks play the Wallabies? That’s a franchise. Maybe RA should ask why Australian based attendance of the same series has drifted 20-35% in the last decade.

Until the Wallabies have a priority that focuses on a winning formula that is driven from the top, expect to see turnstiles become rusty.

Pathetic really. This is exactly why the RA board and leadership need a complete overhaul. Amateurs playing against professionals. Get woke. Go broke.

If private health funds want to gain new customers…

If private health funds in Australia want to gain a lot of new business and waive some waiting periods for long term customers of HCF, they’ll stampede to their door. Strike while their competitor gets woke.

HCF joins the list of brainless corporates having to come out and show it doesn’t support the actions of Israel Folau’s wife, Maria in standing by her husband. The irony is she hasn’t said anything. Shame on her for trying to defend the couple’s livelihood.

HCF, sponsors of the Australian Netball series, said, “We appreciate the complexities of the Folau matter and acknowledge that views do differ in the community, however, we do not support Maria Folau’s stance on this matter.

If Maria Folau said she believed in mass murder, would Australians need direction from HCF to know the right path? Since when did corporates feel compelled to enforce moral and ethical codes on customers?

Corporate Australia is becoming a laughing stock. Does HCF honestly believe its customers are going to quit in droves if they don’t say something woke? It’s no better than ANZ preaching moral codes, although the bank comes from a greater history of scandal, as the Hayne Banking Royal Commission revealed.

Tell you what, if Medibank Private, nib or another private health insurer offer to waive the waiting periods, CM will happily transfer the $400/month to them from HCF.

HCF, not interested in your moral preening.

If only the Bledisloe Cup was 36 minutes…

3DECB87F-C46F-4C6E-BA65-E3C87DC21949.jpeg

The Wallabies played a stupendous first 36 minutes in the 1st half. Great defence and solid possession. Then a try by the All Blacks set off a 6 try spree. The second half was a typical joke performance by a team that continually flakes when the cage is rattled. 7 lost line outs on our own feed and our scrum was screwed multiple times.

CM has thought for a while that coach Michael Cheika needs to go. He can’t bring 80 minutes of discipline with his players.  He has a 54% win record at the helm. With the All Blacks its 22%. Even Scotland is 50%. This is the second worst record of any Aussie coach.

Bob Dwyer – 64% win record

Alan Jones – 68%

Greg Smith – 63%

Rod Macqueen – 79%

Eddie Jones – 58%

John Connolly- 59%

Robbie Deans – 58%

Ewen Mackenzie- 50%

Time to realize he is a dud. The lack of discipline goes straight to the leadership team. There are no positives to take away when a team can only hold it together for just under half a game. It is not an issue of players or ability but discipline.

It doesn’t take away a deserved win by New Zealand but the engravers might as well get to work on the 16th straight series victory because the Wallabies are mere road kill for now.