Rugby Australia is facing financial ruin if Israel Folau wins his multi-million dollar contract fight, according to reports.
Folau's code of conduct hearing over his homophobic comments will go into a second day tomorrow after a full day's evidence on Saturday.
The full-back s fighting for his rugby life after Wallabies bosses signalled their intention to tear up his $4 million contract.
Australian rugby already faces an $8 million dollar loss this year, largely due to limited home test matches because of the World Cup.
And, with Folau seeking a full payout if he loses his contract, the Australian Daily Telegraph report a $12 million hit would leave Rugby Australia "on the precipice of insolvency".
There are also concerns over potential rising legal costs, with both sides understood to be prepared to take the issue all the way through appeal courts.
It's also reported that key Wallabies sponsors intend to walk away at the end of the year, no matter what the outcome of the Folau case.
The code of conduct hearing is now set to run throughout Sunday, although a decision may not come until next week.
Folau sparked a storm last month by claiming homosexuals were going to hell unless they repented on social media, and he has shown no signs of backing down.
Folau was backed by the likes of England player Billy Vunipola, who also received widespread criticism and was booed at Saracens matches and even confronted by a rival fan following the Champions Cup clash against Munster.
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Several Australian player are said to be unhappy about having Folau in their team going forward, with Wales due to face the Wallabies in the World Cup group stages.
