NRL registers surprise $140 million windfall
THE
National Rugby League has shaken off a year of salary cap and player misbehaviour scandals to register a surprise $140 million windfall in “non-broadcast revenue”, as it found lucrative new ways to make money beyond its $2 billion TV rights deal.
The boom result was driven by a 50 per cent jump in sponsorship revenues to $43m in 2016, as the code announced new or upgraded contracts for major corporate partners Sportsbet, KFC, Hankook Tyres, Treasury Wines, P & O Cruises and Coates Hire.
It can also be revealed that the sponsorship jump softened the blow of an unexpected rise in costs caused by the scandals of the 2016 season, according to a copy of the NRL’s financial results for the year to October 2016 obtained by
The Daily Telegraph.
The code was forced to spend a record $3.2 million on policing integrity and salary cap issues, mainly because of its months-long
investigation into the Parramatta Eels’ salary cap scandal broken open by the Telegraph in March last year.
The sponsorship boom was the driving force behind a rise in the NRL’s total revenue by nearly $20m to nearly $354m.
The impetus for the rise in the NRL’s 2016 sponsorship revenue appears to have been the renewal of the NRL’s betting rights.
NRL chief executive Todd Greenberg told the Daily Telegraph growing sponsorship revenues have become a key focus of the code: “With the TV rights deal secured, we are now focusing on driving non-broadcast revenue. And that means working to increase corporate involvement in the game.”
Early last year, Sportsbet upgraded its contract as the NRL’s official wagering partner, worth as much as $60 million over four years.
However, the $43m the NRL makes from sponsorship lags what the AFL makes from corporate partners. While the AFL has not yet released its 2016 results, in 2015 it is understood to have made between $70m and $90m from sponsorships.
The results also show that the NRL was forced to dip into its $134 million of cash reserves during 2016 — recording a $2.6 million deficit for the year.
However, that comes after the NRL distributed $184m to the clubs for the year to October 2016. It is understood individual clubs received a range of between $11m and $12m each during the year, a figure that included a $1.5m distribution that was given following the signing of the TV rights deal with Nine.
The NRL’s cash reserves had been boosted by a $50m cash advance from the Nine Network towards its free-to-air TV rights deal through to the end of 2022.
The $184m paid to the clubs did not include the money ploughed into the NRL-owned Gold Coast Titans and Newcastle Knights to keep them operational. It is understood that each club was given a $3m subsidy during 2016.
Greenberg said: “It is crucial that we provide them with the funding to be strong and stable.”
Club distributions will be boosted further in the future, after League chairman John Grant caved in late last year and offered them a lucrative deal from 2018 onwards in order to save his position. The NRL will report a deficit once again for at least this year.
There was a blowout in operating expenditure, which rose by more than $5 million to $133 million. This was due largely to investment in technology, mainly the NRL’s controversial bunker, which cost between $2-3 million
