Kanaloa Hawai’i falls short in MLR bid

Kanaloa Rugby will not be bringing Major League Rugby to Hawai’i in 2021. The league issued a formal statement on Friday afternoon confirming that the three-month negotiating period had expired without an agreement. MLR will proceed with 13 teams next season.

While the league did not specify why no agreement was made, Martin Pengelly of The Guardian reports that a key financial deadline was not met, with Kanaloa instead “submitting a note of protest about the admissions process.” Prospective teams are required to not only fulfill a set franchise fee but also provide proof of sufficient capital to manage future expenses. Multiple sources have confirmed to ARN that the Kanaloa bid ultimately fell short of those financial requirements.

Kanaloa published a lengthy response on social media that was then edited, and has since been removed entirely. The response claimed that the ongoing pandemic situation and concerns with the league’s stability led to Kanaloa withdrawing from the bid. It can be read in its entirety below:

“Aloha MLR Associates,

“Given the uncertainty and continued complexities of COVID both here in NZ, in Hawaii, and across the US, we undertook a due diligence review and moreover a thorough investigation into the financial stability and long term viability and sustainability of the MLR competition. The result of which presented a range of high-level concerns for our organisation.

“The MLR has not been able to provide the type of assurances (COVID Plan, proposed match schedule, other) that would enable the trust and confidence required to continue with our membership goals.

“Initially, the lack of insight and planning around a COVID Strategy and the postponement of training to 4 January was the focus of our concerns. However, the situation was compounded by a list of other more sensitive issues around Governance, policy, and the financial performance of the organisation as a whole.

“We believe that once the MLR is in a position where they can provide greater clarity and assurances for the health, safety, and well being of our staff, players, and of course a more feasible solution for our investors, partners, and sponsors; we will reconsider our options then.

“As an aside, we formally actioned a request to dispute as part of our ENA process to undergo a full investigation into the financial viability of the MLR and also to review what was offered to Kanaloa Hawaii during our ENA negotiations.

“The result of this is that the MLR has offered Kanaloa Hawaii an opportunity to terminate our ENA with provisions to reinstigate a membership opportunity from 2022. We are considering our options in this regard also.

“We now look forward to providing an alternative option for our players, staff, and volunteers for 2021.”

It should be noted that the above claims come just days after a separate post on social media suggested that they were expecting a different outcome this week. In fact the claims are the first and only indication from Kanaloa that there were potential points of divergence between the two parties.

Aloha Ohana! Some exciting announcements due in the coming week! Stay tuned for details!

Image : https://t.co/WJ97wCuweq pic.twitter.com/WfLFjC2GgK

— Kanaloa Hawaii Rugby (@KanaloaRugby) August 30, 2020

Problems for Kanaloa, on the other hand, began when Hawai’i Senator Glenn Wakai publicly questioned a number of Kanaloa’s claims regarding partnerships with key local entities including Hawaiian Airlines. The group claimed that this was simply a matter of miscommunication, and appeared to smooth things out with the Senator. Indeed local point-man Jack Breen appeared on the ‘Three Blokes, a Ball, and BOD‘ podcast to further ease concerns though curiously that episode is no longer available online.

Finances and costs involved have been the main concern from the start and were not eased when the group identified a number of All Blacks as investors – namely John Afoa, Ben Atiga, Jerome Kaino, Joe Rokocoko, Benson Stanley, and Anthony Tuitavake. While these are all accomplished and successful professional players, it was obvious that significant capital would still be needed to secure the bid.

Questions were also raised about the proposed playing venue. Team Manager Cam Kilgour initially stated that they would aim for a pop-up venue in the first year, with Breen later adding that Waipio Soccer Fields could be a suitable location. The long-term plan was to move to a revamped Aloha Stadium.

The Aloha Stadium redevelopment project recently hit an administrative snag, however, and is yet to be approved by the Hawaiian government. It then emerged that Kanaloa had requested use of the venue for the 2021 season, with the Stadium Authority asking Kanaloa for a letter of credit to cover rental costs.

All of this is now a moot point with the two sides parting ways, ending a story that began with a tweet from Scotty ‘Sumo’ Stevenson in mid-May. The league formally confirmed the bid in early July though it was later clarified by Kanaloa CEO Tracy Atiga that the formal negotiating period had begun in late May.

By mid-July the group had made the rounds in the media with several outlets touting the bid as a done deal. The team began calling for prospective players to express their interest. Atiga even stated that Super Rugby was also in their sights though there remained hurdles yet to overcome for MLR inclusion.

Updates in August were few and far between. A potential legal battle suddenly loomed over their logo which had allegedly been misappropriated. As the end of their negotiating period at the month’s end fast approached, the Stadium credit call was a hint that all was not well behind the scenes.

From the start the idea was met with equal parts excitement and skepticism. In the end there is only disappointment. MLR has made it clear they are open to a team in the Aloha State, but despite initial suggestions the group could re-apply in 2022 it now appears highly unlikely that Kanaloa will be given a second opportunity to achieve their Hawaiian dreams.