The ACT Brumbies are staring at a $500,000 black hole in their budget next year after the ARU slashed its funding to Super Rugby franchises and their community rugby programs.
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The Brumbies will report a significant loss for the fourth consecutive year and the club is still searching for a naming-rights sponsor deal worth more than $1 million.
Brumbies chairman Sean Hammond said the club would be "in a real dire position" had it not been for the multi-million dollar sale of its Griffith headquarters.
But chief executive Doug Edwards hopes to negotiate a new deal with the ACT government next year equal to or above the "benchmark" $2.6 million per season the GWS Giants get.
The ARU has cut $240,000 in community rugby funding for next year.
That will combine with a reduction in extended player squad funding and a host of other cuts from hierarchy which will deliver a $490,000 hit to the Brumbies.
The organisation will investigate ways to either make cuts or increase revenue in its high performance and community rugby program, including looking at the cost of playing club rugby in Canberra.
"Ongoing losses aren't sustainable and we have to make some tough decisions," Hammond said.
"It's been a disruptive year ... without the property deal [at Griffith] we would be in a real dire position.
"The core value of our organisation is community. We spend $1.4 million a year on community rugby and generate $600,000 in revenue.
"We'll have to make some serious decisions in reducing costs or preferably finding new sources of revenue."
SANZAR is negotiating a new television rights deal for Super Rugby for 2016 and beyond. It is hoped rugby can secure a big enough deal to provide a strong financial injection.
The Brumbies received a $5.1 million slice of the television deal in 2005, but that has dropped to $3.9 million this season and will be even less next year.
The ACT government has committed to a 10-year, $26 million deal to have the GWS Giants play four games in Canberra each season, including one pre-season match and three premiership games.
The deal with the Giants also includes a $1 million sponsorship to have "Canberra" on the team's jerseys
It means the Giants effectively get $400,000 per game in Canberra, but the government keeps gate revenue from hosting games at Manuka Oval.
The Brumbies get $2.1 million from the government, which includes $70,000 for community rugby and a $600,000 payroll tax waver, for their eight games at Canberra Stadium every season.
The ACT government also contributed $5 million to the Brumbies' new base at the University of Canberra.
"GWS have got the benchmark and good on them, we'll go back to the government and see what we can do," Edwards said.
"The Brumbies and Raiders live here [in Canberra], they're important to the sporting culture of this city and we have to make sure they stay viable.
"The last thing you want to see is another Canberra Cannons [demise in the NBL], we're aware of the issues and we'll get there."
The Brumbies have also struggled to attract big crowds in recent years.
A disappointing 14,000 fans watched the Brumbies final against the Waikato Chiefs, turning what could have been a $300,000 bonus into $80,000.
The Brumbies' overall match day revenue this season was down about $200,000
"It's all well and good to say we're going to get a new stadium in Canberra," Edwards said. "But we can't wait six or eight years for it to come about.
"It's putting pressure on our resources. We're probably in a better position than we have been ever, we've got cash in the bank.
"But you can't keep having losses or you lose that asset. Things aren't dire, but we can't let it go backwards. That's my job, building on assets and putting more into community rugby."
The Brumbies used 37 players this season before being knocked out in the semi-final by the NSW Waratahs.
But the reduction in the extended player squad program, which has produced players including Scott Fardy, Scott Sio and Jesse Mogg, and Pat McCabe's sudden retirement will force the Brumbies to have just 31 contracted players next season.
