'Cost him millions': Stunning Israel Folau twist in Rugby Australia's virus crisis

Israel Folau's multi-million payout from Rugby Australia could reportedly take a major hit if the sport's governing body is forced into insolvency.

The former fullback ace was sacked by RA last year over his homophobic social media posts, including one stating hell awaits homosexuals.

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The two parties agreed to an out-of-court settlement in December after Folau sued RA for religious discrimination.

While the terms weren't made public, it's understood to be around $3m, which is the remainder of his four year contract.

According to The Australian, the settlement is being paid off in instalments with those payments at risk should RA go under.

Should RA be forced to declare itself insolvent, Folau would become an unsecured creditor and depending on its assets, he'd likely be paid out only a few cents in the dollar.

“In a very direct way, Israel Folau has driven Rugby Australia to the brink of insolvency, but now it emerges that if the sport’s governing body goes under, it could cost him millions of dollars,” Wayne Smith wrote on Monday.

Folau has been playing rugby league with French-based club Catalans Dragons in the Super League, although competition is currently suspended due to the coronavirus pandemic.

He is reportedly expecting his first child later this year with former netball star wife, Maria.

Wallabies legend says administration likely

Wallabies great Nick Farr-Jones believes voluntary administration is the likely next step for the embattled RA.

While backing former teammate Phil Kearns to take over as RA boss and eventually help the game return to its former glory, Farr-Jones could only see short-term pain for the cash-strapped code.

“I wouldn't be surprised if an administrator was appointed in the next fortnight,” Farr-Jones told ABC radio program The Ticket on Sunday.

“I understand that reserves are minimal ... that would only be funds that have come from world rugby from the participation rights of the world cup last year.

“Otherwise I just don't think we've put any acorns away for a winter like we're expecting at the moment where there's no income projected.”

Backing up his comments from an interview on Saturday, Farr-Jones said while he wasn't privy to all of RA's financials he would be concerned about the going concern issues, with the business still facing a large wage bill for players.

“If you have going concern issues and you don't want to breach the corporations act, well then you go into voluntary administration.”

Farr-Jones, who earned 63 caps over 10 years, said incumbent CEO Raelene Castle had inherited problems when she was appointed to the position in 2017.

But he felt she also lacked experience and criticised her handling of the costly Israel Folau case and current broadcasting negotiations.

That was where he felt Kearns, currently a Fox Sports commentator, could do better.

“You have to have a deep knowledge of the game to take on the role; you have to understand intricately who the people are in world rugby, intricately about the community game and you can't be learning on the job.

“Phil Kearns has got three and a half decades of being intricately involved in the game.

“He knows people, he's trusted by people and he'd been in broadcasting for a long time and that's the most important thing RA has to lock away.

“He would be great with securing sponsors and with fans - we need the rusted on rugby people we've lost to come back to the game."

Working in mining finance, Farr-Jones said he would consider a seat on the board: “I'd like to come back on board passionately for the game.”