The Cronulla Sharks have proposed the NRL give hand-outs to all clubs
Stuart Honeysett | February 07, 2009
Article from: The Australian
CASH-strapped Cronulla has proposed the NRL increase its hand-out to all clubs to help them survive the global financial crisis.
The call came as club bosses conceded the worldwide economic downturn meant the game was in a dire financial position and facing an enormous challenge this season.
With unemployment levels tipped to rise, clubs are bracing themselves to take a hit in several areas including merchandise sales, corporate support and gate receipts.
Several clubs are already under the pump with Cronulla taking out a $500,000 bank loan to pay wages and bills over Christmas. The Bulldogs are still without a major sponsor for 2009, while the Gold Coast has been forced to trim expenditure by 13 per cent.
The NRL increased its grant to clubs by $100,000 this season but has not committed to another rise until it negotiates new broadcasting arrangements after 2012.
Cronulla chief executive Tony Zappia said yesterday it would be prudent if the NRL could find additional funding now to assist clubs.
"It's an opportune time if the NRL has surplus funds to increase the grant in 2009 for all NRL clubs," Zappia said. "A quarter of a million each would be lovely but that may not be possible. Even another $100,000 to everyone's bottom line."
The proposal was welcomed by most club bosses yesterday and prompted other suggestions which are certain to be raised at the next chief executives' meeting on March 4.
Manly's Grant Mayer said the ARL and News Limited, joint owners of the game, could defer annual payments of $8 million apiece with the money to be redistributed to clubs for the next two years.
"The $16 million is divided amongst the clubs to ward off the crisis," Mayer said.
"We understand that development has to be funded so therefore the clubs agree to set aside a portion to ensure the game continues to grow. The clubs have also got to be more responsible and more active in finding revenue but to ensure the product doesn't suffer this may be a compromise worth talking about."
However, Gold Coast managing director Michael Searle said any increase in the grant was tied to the salary cap and could have a negative effect.
"I'd be concerned it would lead to inflationary pressures on the player market and that would send a poor message to our fans," Searle said. "Maybe a better solution is for us to look for efficiencies from around and within the structures of the game."
NRL chief executive David Gallop said there were no plans to increase the grant.
"We've said for some time we'd like the grant to match the cap but there are lots of mouths to feed in rugby league and it's not possible at the moment," he said.
Bulldogs chief executive Todd Greenberg said it was increasingly likely they would not have a major sponsor this season because of the global credit crunch.
Valued anywhere between $750,000 to $1m, Greenberg said several companies were trying to take advantage of the crisis by offering less than $500,000 to be the club's main backer.
"We haven't secured a naming-rights sponsor yet and in the current climate it would appear difficult to do so in the short term," Greenberg said. "If we have to go through the season without one we'll do that but we think we'll be able to do something before the end of the season."
The crisis could also flow on to players' salaries with most club chief executives admitting it is almost impossible to find third-party agreements. Most clubs use TPAs as a sweetener to give them an edge over their rivals when negotiating player contracts.
"They'll be just about non-existent because people are cutting back on budgets," South Sydney chief executive Shane Richardson said.
Gallop and chief operating officer Graham Annesley are visiting all clubs to discuss a range of issues including ways to ride out the economic downturn.
Having stated last year he would prop up any club in trouble at the height of the poker machine tax crisis, Gallop reiterated his support in light of the latest threat.
"No club is expendable in our view," Gallop said.
"We've got contractual obligations to provide a certain number of games a week and just as importantly our saturation across Sydney and in certain key regional markets is very important to the long-term future of the game."
