What does it cost to run an NRL club?

[Perth Red]

Thought Id take a bit of a look at what revenue NRL clubs bring in from FC operations to get a sense of annual running costs. Not easy to find for most clubs and tied up in LC operations for those that do produce them but here's where some of the clubs are as (source 2021 annual reports, NRL grant split equally but in reality is varied depending on factors) an indicator of what a new club should be aiming for so as no to rely on a LC or rich backers. Of course expenses can vary greatly as well such as ground rental, how the FC club invests in pathways, how much they spend wining and dining sponsors, how much they invest in fan engagement, FC operations like coaches etc etc.

FC Revenue is a largely split into:
Merchandise Sales, Sponsorship (some clubs put sponsorship and corporate game day sales together in sponsorship line, some put corporate game day sales in game day revenue line), Game day revenue (tickets and memberships), NRL grants

Cowboys
Merch$1.3mill Sponsorship$9mill Game Day$5.9mill NRL Grants$16mill Total = $32.2mill

Eels
Merch$767k Sponsorship$8mill Game Day$4.9mill NRL Grants$16mill Total = $29.6mill

Panthers
Merch$2.3mill Sponsorship$9.1mill Game Day$1.3mill NRL Grants$16mill Total = $28.7mill

Sharks
Merch$868k Sponsorship$4mill Game Day$1.6mill NRL Grants$16mill Total = $22.5mill




Going on this snapshot of clubs a new club needs to be looking to bring in around $12-16mill in FC operations to be sustainable on a budget of around $30million. Looking at what additional funding clubs get from LC's etc ideally clubs would be realising FC revenue of around $20million to be totally sustainable and profitable without pokies

 

[Get Rid of The Donkeys]

I wouldn't be surprised if gaming machines are phased out by the state governments over the next 20 years. It wouldn't surprise me if they capped how much people can spend on gaming machines. It's only a matter of time untii they go after the bookies.

 

[Perth Red]

Last year the Bulldogs LC funded the NRL Bulldogs with a $3.6mill grant. Same year they gave $600k to Jnr RL in the region!
If clubs could stand on their own two feet there could be a lot more money flowing to grass roots RL!

All the signs (at least pre covid) was a slow but significant decline in pokie revenue. With online betting options and a more sophisticated generation coming through the idea of sitting in a LC eating a cheap meal and feeding your pay cheque into a machine is thankfully disappearing.

 

[flippikat]

I wouldn't be surprised if gaming machines are phased out by the state governments over the next 20 years. The Greens are pushing for prohibition or restrictions and they usually get what they want. It wouldn't surprise me if they capped how much people can spend on gaming machines. It's only a matter of time untii they go after the bookies.

Over here in NZ, we've had cases of "sinking caps" on gaming machines, which could be the political compromise that happens over in Australia.

Capping Gambling in NZ: The effectiveness of local government policy interventions

An analysis of the impact of territorial authority electronic gaming machine (class 4) policy on gambling harm in New Zealand.

www.health.govt.nz

 

[Get Rid of The Donkeys]

Last year the Bulldogs LC funded the NRL Bulldogs with a $3.6mill grant. Same year they gave $600k to Jnr RL in the region!
If clubs could stand on their own two feet there could be a lot more money flowing to grass roots RL!

All the signs (at least pre covid) was a slow but significant decline in pokie revenue. With online betting options and a more sophisticated generation coming through the idea of sitting in a LC eating a cheap meal and feeding your pay cheque into a machine is thankfully disappearing.

I cannot see the younger generation racing to the pokies when they can do all of that and more on their phone from the convenience of their lounge room.
If we continue to invest less in grassroots to prop up struggling NRL clubs then it'll eventually lead to a poorer product at the elite level.

 

[Perth Red]

I cannot see the younger generation racing to the pokies when they can do all of that and more on their phone from the convenience of their lounge room.
If we continue to invest less in grassroots to prop up struggling NRL clubs then it'll eventually lead to a poorer product at the elite level.

Last year the NRL reduced grass roots funding by $25million compared to the last pre covid year (2019). Whilst NSwRL was impacted by covid a bit in '21 the rest of the country wasnt and rather than take the opportunity to boost funding to other states whilst NSW didnt need it they gave it to NRL clubs and players ($50mill) and announced how good they were for making a surplus.

 

[Get Rid of The Donkeys]

Over here in NZ, we've had cases of "sinking caps" on gaming machines, which could be the political compromise that happens over in Australia.

Capping Gambling in NZ: The effectiveness of local government policy interventions

An analysis of the impact of territorial authority electronic gaming machine (class 4) policy on gambling harm in New Zealand.

www.health.govt.nz

I think we'll see something like that over here within 10 or 20 years. It's long overdue. A system like that will allow people to gamble without losing all of their money.

 

[Get Rid of The Donkeys]

Last year the NRL reduced grass roots funding by $25million compared to the last pre covid year (2019). Whilst NSwRL was impacted by covid a bit in '21 the rest of the country wasnt and rather than take the opportunity to boost funding to other states whilst NSW didnt need it they gave it to NRL clubs and players ($50mill) and announced how good they were for making a surplus.

The sad thing is NSWRL fans will push for this system to stay as it gives their clubs security. In the long-term it will lead to grassroots clubs shrinking or folding and fewer people playing the game. Within 20 years we'll have a dearth of talented players and it will make the product less attractive to viewers. Casual fans will watch fewer games and broadcasters will pay less for a declining product.

 

[flippikat]

I think we'll see something like that over here within 10 or 20 years. It's long overdue. A system like that will allow people to gamble without losing all of their money.

It's not a cure-all, but as a mid to long term solution, it might just be palatable.

No new pokies, and if a club/bar goes out of business, it's licence lapses & no replacement licence(s) are issued.

That way, as the population grows, the machines per capita decreases.

 

[Get Rid of The Donkeys]

It's not a cure-all, but as a mid to long term solution, it might just be palatable.

No new pokies, and if a club/bar goes out of business, no replacement licence(s).

That way, as the population grows, the machines per capita decreases.

I think the younger generation will bypass the electronic gaming machines altogether and just gamble from their phones.

 

[flippikat]

I think the younger generation will bypass the electronic gaming machines altogether and just gamble from their phones.

Yep, and that's just the trend in a lot of things - shopping, listening to music, watching movies/shows/sports, gambling, you name it.

The convenience of having *everything* in a device is blowing away a LOT of traditional businesses & traditional business models - and the smart operators will adapt to that, including getting in on that action.

Back to rugby league, that was one of the intriguing parts of the Firehawks bid - I recall Shane Richardson (one of our game's few real visionaries these days) talking about the club using digital media/apps to engage with fans more.

 

[Get Rid of The Donkeys]

Yep, and that's just the trend in a lot of things - shopping, listening to music, watching movies/shows/sports, gambling, you name it.

The convenience of having *everything* in a device is blowing away a LOT of traditional businesses & traditional business models - and the smart operators will adapt to that, including getting in on that action.

Back to rugby league, that was one of the intriguing parts of the Firehawks bid - I recall Shane Richardson (one of our game's few real visionaries these days) talking about the club using digital media/apps to engage with fans more.

The game missed an opportunity by going with the traditional Dolphins over the innovative Firehawks bid.

The future is streaming and the game will need to embed the technology into its policies to lure young people to the games. Clubs will need to set up competitions that encourage fans to come to the game and use their mobile phones for a chance to win prizes.

A Selfie of the Round competition would encourage young adults, especially young women who are active on Instagram, to come along and take selfies of themselves and post it on their social media for the chance to have their picture and social media account highlighted on their club's website. Everyone who takes a selfie and sends it in goes in a draw to win a car at the end of the season.