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World Rugby vice chairman Agustin Pichot is expected to be named to USA Rugby’s board any day, pending ratification by USA Rugby’s Congress. Email votes to approve Pichot’s appointment are due this week.
If ratified, the controversial Argentine will serve as representation for World Rugby, which purchased its seat on the American board as collateral when it stepped in to cover losses from last month’s Rugby World Cup Sevens in San Francisco.
The event’s total losses haven’t been made public, but sources put them between $1.7-2.4 million. Rugby International Marketing, USA Rugby’s for-profit arm and the brainchild of former CEO Nigel Melville and ousted board chairman Will Chang, was the original guarantor of the World Cup, but a cascade of reckless strategic decisions left the USA Rugby subsidiary broke and unable to back the event.
The appointment further outlines the evolving relationship between USA Rugby and World Rugby, which have seemed to work in concert much of the last year. CEO Dan Payne left USA Rugby to take up the same title with Rugby Americas, a World Rugby property, but not before implanting former long-time World Rugby employee Ross Young in the national office as his successor. Now Payne’s new boss is being placed on USA Rugby’s board.
The nature of the relationship is called into question by recent headlines involving Pichot, who waded into choppy ethical waters by accepting the role of president and director of Argentina Fortescue South America, the mining operation of Australian iron ore tycoon Andrew “Twiggy” Forrest. The billionaire is desperately seeking approval from Rugby Australia and World Rugby for his “World Series” concept – an eight-team international competition.
As reported by the Sydney Morning Herald, Pichot was pressured to admit a conflict of interest to the rest of the World Rugby executive committee, including former USA Rugby chairman Bob Latham, earlier this year. Applying the pressure was Rugby Australia representative Brett Robinson, as Rugby Australia is reportedly enraged with Pichot for getting mixed up with Forrest during negotiations.
The fury is compounded by Pichot’s apparent lack of experience or acumen in the mining industry and the perception that Forrest may be jockeying to use relocation of his World Series to South America, where Pichot wields the most influence, as a bargaining chip in talks with Rugby Australia.
In addition to serving on World Rugby’s executive committee, Pichot sits on the board for SANZAAR, which runs The Rugby Championship and Super Rugby. The former Puma scrumhalf was instrumental in landing Argentine teams in both tournaments.
Pichot is the founder of the PEGSA Group (Pichot Entertainment Group South America). PEGSA is a media production company that generates content from several sports, all for ESPN, the carrier of America’s Rugby Championship, a World Rugby property. PEGSA also includes action from Super Rugby’s Jaguares in promotional reels of the content they’ve produced on their website.
Given his roles with World Rugby and SANZAAR, there is growing speculation Pichot is leveraging his rugby influence for personal gain. Rugby Australia’s concern is he’d be doing the same thing in giving Forrest’s World Series concept an advantage in the approval process, as well as a potential landing spot for the competition should talks with Rugby Australia fall through, in exchange for being named the president of Forrest’s mining operation.
Pichot was also part of the Argentina Rugby Union board which came under fire for conflicts of interest involving contracts with ESPN and sponsors a handful of years ago. Pichot specifically was fingered for having conflicting commercial relationships.
If not for the product of a conflict of interests, the World Cup might have turned a profit, preventing USA Rugby from needing World Rugby’s bailout altogether.
The deal between the San Francisco Giants, of which Chang is a partial owner, and RIM, a subsidiary of Chang-led USA Rugby, to put the World Cup in AT&T Park saw between 20- and 30-percent of ticket sales and 100-percent of the revenue from parking and concessions go to the Giants, setting up USA Rugby for a loss from the beginning.
Congress started to peel back the veil on RIM’s financial woes in February, uncovering a squandering of several millions of dollars and resulting in a purge of resignations from Chang, fellow USA Rugby board members Chad Keck, Rob King and Bob Kimmitt, as well as RIM CEO David Sternberg.
With Pichot an all-but-assured email vote away from joining USA Rugby’s board, it appears USA Rugby is on the eve of replacing its now-jettisoned, self-serving leadership with more of the same, if not worse.
World Rugby granted USA Rugby its World Cup. When USA Rugby couldn’t afford to run it, World Rugby extended a greasy palm disguised as assistance.
USA Rugby employees went hat in hand to World Rugby and pleaded for compromise on its fees and some of the more expendable V.I.P. deliverables, totaling around $700,000. World Rugby refused.
The tournament exceeded expectations, breaking attendance and viewership records and generating more than $12 million in revenue, while USA Rugby lost upwards of $2.5 million.
The actual price tag, though, is immeasurably higher. The World Cup cost USA Rugby a seat on its board, and with it, sovereignty over rugby in America. Not just a pound of flesh, but potentially its soul.