Disgraced rugby player Israel Folau is set to fight for his $4 million deal after Rugby Australia issued a termination notice on April 10 following his homophobic social media post.

Folau requested the Code of Conduct hearing, set to take place on Saturday May 4, to appeal Rugby Australia’s (RA’s) decision to sack him over his controversial post on Instagram.

RA chief executive officer Raelene Castle stressed the termination of Folau’s contract is about the issue of responsibility, rather than punishment for his religious beliefs.

Castle told reporters in Sydney Monday afternoon: “This is not a religious discussion.

“This is a discussion around the employee, employer relationship and the values and the contractual arrangements within that agreement, that’s on the basis on which we have served him a breach notice.”

Castle did confirm Folau did not have a social media clause in his contract but said there was a “verbal and written” informal agreement.

Whether Folau wins the case or not, although a win will certainly result in more harm than good for everyone involved, his homophobic comments have done more than just hurt his career. His comments could ultimately harm RA’s sponsor relationships, and the sponsors themselves.

Because if Folau wins, it begs the question: what will Rugby Australia’s sponsors do?

It’s not the first time Folau has been in hot water with sponsors over posting homophobic content to social media.

When Folau made similar homophobic comments a year ago, it was reported that Qantas was re-evaluating its sponsorship of the Wallabies.

Last years’ homophobic comment on Instagram was subsequently deleted, however, Folau stood by his comments, citing his Christian faith as the reason for his view, denying he was bigoted or homophobic.

At the time, Castle said RA did not agree with his views, they accepted his position and would not sanction him.

Almost exactly a year later, Folau again posted homophobic comments on Instagram. This time, however, Rugby Australia chose to not stand by the Wallabies player, instead announcing its intention to terminate his contract, which Folau has decided to appeal.

Corporate sponsor Qantas publicly condemned his latest comments saying they did not “reflect the spirit of inclusion and diversity” it supports.

While the Australian airline clearly decided to continue their sponsorship after Folau’s first fumble, it remains to be seen what the corporate sponsor will do if Folau wins his case.

B&T reached out to Qantas, but as of yet received no comment.

Network 10, who is also a sponsor of RA, said they fully support Rugby Australia’s position.

CEO of Network 10 Paul Anderson said: “As a Network we absolutely support inclusion, diversity and respect and we fully support the position Rugby Australia has taken.”

B&T also reached out to various other RA sponsors, including Powerade and Destination NSW, who did not respond.

Speaking with Lisa Annese, CEO of Diversity Council Australia (DCA), we asked whether sporting sponsors needed to take a harder stance when it came to continuing their sponsorship of sporting stars who exhibit discriminatory behaviour, and she said it ultimately comes down to the brand.

“That’s a decision for every brand to make but I will say this: if you want to position yourself as a progressive organisation that is inclusive, and if you want to appeal to people who have a sense of tolerance and social justice, then I do think it’s important [that brands take a harder stance].”

Ryan Storr, co-found of Proud2Play, a Not For Profit focusing on increasing LGBTI+ engagement in sport, exercise and active recreation, said as a sponsor of RA, Qantas did the right thing by condemning Folau’s act, saying it “sent a strong message”.

He added: “I think by Qantas setting a precedence and a strong message shows other sport sponsors that ultimately engaging with LGBTQI+ inclusion is good for business, and if you engage within the other side, it’s bad for business and will affect customers and the bottom line.”

When asked if sponsors need to take a harder stance on misbehaving athletes, Storr believed they did, saying people inarguably associate players with an organisation.

“I think they do need to take a stronger stance. While Israel Folau can’t be reflective of the organisation, sponsors need to be careful because people do associate them with [athletes] so they have to think while they might not be sponsoring a player, a player’s actions do reflect the organisation by default.”

If Folau wins his case against Rugby Australia, its sponsors will arguably need to take a hard look at their continued sponsorship and support of RA, and ultimately its players and their actions.

As Storr said, it’s simply bad for business to engage with discriminatory and homophobic behaviour, even if it’s not coming directly from RA itself.