Rugby's major sponsors were ready to walk away from the code if Israel Folau was not sacked for his homophobic posts, and this is the key element that is likely to sink the player's fight to retain his $4 million contract.

Rugby Australia will be able to prove in a hearing that Folau brought the game into disrepute and breached the code of conduct set out for all their employees with his post, because the loss of sponsorship would have financially killed the code.

It's understood there is no specific social media clause in Folau's four-year contract, however the "bringing the game into disrepute" charge surpasses that, as does the fact Folau knew the consequences of posting inflammatory material after last year's controversy because he was formally warned.

Folau met with his bosses for 10 minutes on Friday, where he said he will proceed with a code of conduct hearing to remain employed, and they replied they'd take every measure to terminate his contract. The date for that hearing is yet to be set.

Advertisement

Folau may choose to use a "free speech" defence, but ultimately that is set to fail in the face of the evidence that the entire game would have gone broke had they not taken action.

As fate would have it, RA had scheduled meetings with four key sponsors including Qantas for this week, well before Folau's post on Wednesday.

But as they sat down there was no avoiding the elephant in the room.

The Daily Telegraph revealed that two of the four sponsors told RA that if they didn't sack Folau, there was no chance of renewing their deals.

RA has already projected a deficit of millions in the next financial year, given the Wallabies are only hosting three Tests this season due to the World Cup.

Israel Folau of the Wallabies. Photo / Photosport.co.nz
Israel Folau of the Wallabies. Photo / Photosport.co.nz

With a sponsor revolt, rugby in Australia would be in danger of folding.

Folau's post had the potential of sending broke the employer who pays him $1 million a year, therefore constituting a "bringing the game into disrepute" case against the player.

Equally as important is the code of conduct breach vilifying people based on their sexuality.

Advertisement

Not only did Folau offend masses of the public, but also employees within RA, including members of the Australian women's team.

Atop their mission to be inclusive, RA has a duty to protect their employees from speech that is deemed offensive and disrespectful.

Folau set off his social media grenade while in New Zealand, where he was spending time during the Waratahs' bye week.

Israel Folau. Photo / Photosport.co.nz
Israel Folau. Photo / Photosport.co.nz

After Folau put his post up on Instagram, RA officials sought to phone him without luck.

As public furore arose, RA released a statement condemning his words, hoping to meet with him on Thursday to give notice of termination.

RA boss Raelene Castle and other officials tried numerous times on Thursday to call Folau but he would not answer.

They contacted Folau's manager Isaac Moses, alerting him to the fact they were planning to sack his client. Moses also left messages with Folau urging him to call RA back.

As time slipped away, RA released their statement saying they intended to terminate Folau's contract "in the absence of compelling mitigating factors", while confirming he had been formally warned last year for making similar posts.

Upon realising the seriousness of the situation, Folau boarded an early plane back to Sydney on Thursday night and messaged Castle to say he'd front up on Friday.

On Friday morning, he and wife Maria met with Rugby Union Players' Association boss Prataal Raj at a cafe, where he made clear he wanted to continue playing for the Waratahs and Wallabies and see out his four-year contract.

RUPA, while disagreeing with Folau's views on homosexuality, has a duty to provide its members with assistance in such matters.

Raj accompanied Folau to a tense meeting with Castle, Wallabies coach Michael Cheika and high-ranking RA officials, where he was told every step would be taken to axe him.

Under his terms of employment, Folau is entitled to a code of conduct hearing before he can be officially terminated, and said he wants that hearing.