Clubs fear NRL can’t afford to expand

[El Diablo]

http://www.theaustralian.com.au/spo...302521891?nk=3dcec47f035f651450ff1385fc6889df

Clubs fear NRL can’t afford to expand

The Australian
April 14, 2015 12:00AM

The NRL’s expansion plans beyond 2017 are rapidly fading after club chairmen expressed concern at a recent meeting over whether the game could afford more teams.

The Australian understands the issue was addressed three weeks ago at a meeting that was also attended by NRL chief executive Dave Smith. Smith is keeping an open mind on the issue of expansion but acknowledged the club’s concerns were legitimate.

The NRL is already propping up four clubs who are battling financially.

The league recently appointed former South Sydney chief executive Shane Richardson to a game strategy and development role. He is working on a number of projects including the issue of expansion when the next broadcast rights deal is negotiated.

The current $1 billion contract expires at the end of the 2017 season and the next deal will be more lucrative on the back of its ratings success — the NRL grand final and the first two State of Origin games were the top-three programs of 2014.

It is believed free-to-air broadcaster Channel Nine is keen for a second Brisbane team but the NRL has to weigh up whether any additional revenue can support up to two new franchises or would be better spent strengthening the existing 16 clubs.

The NRL has been forced to step in and is playing an ongoing role in helping Newcastle, Gold Coast, Wests Tigers and St George Illawarra pay their bills. The fact the Titans were the last expansion club to be admitted in 2007 only adds to the concern.

“We need all the current clubs to be sustainable and the only way you’d look at expansion is if you made the pie bigger — not divide the same pie up between more teams,’’ one club boss told The Australian yesterday.

“Unless it’s really profitable for the game you wouldn’t do it.’’

There are a number of consortiums lining up to be included in the NRL when it expands again including the West Coast Pirates, Brisbane Bombers, Central Coast Bears, another Brisbane franchise, a central Queensland and Ipswich corridor bid.

The Australian understands the franchises have been told they will have an opportunity to make a sales pitch to the NRL later this year before Richardson finalises his report and presents it to the ARL Commission for consideration.

Bombers chairman Craig Davison said he remained confident the NRL would expand for the 2018 season and a second team would be included from Brisbane. He added he did not believe another team in that market would impact on the already struggling Titans. “My personal belief is that there needs to be a team in Brisbane in 2018 to maximise the value of the next TV rights deal.

“How that makes the whole 16, 17, 18 team thing look like, I don’t know, and obviously the investigations the NRL are doing will be told that at some point. I see putting another team in Brisbane strengthening the league market.’’

Pirates chief executive John Sackson, who is also employed by the NRL as a development officer in Western Australia, said he had already been waiting five years for an answer on expansion and it would be a blow if it was put back again.

“Nothing will accelerate growth of the game here more so than the presence of having an NRL franchise and everything that goes along with it,’’ Sackson said. “Everything has been put on the backburner here awaiting further direction and we believe we’ll have a better idea come the latter part of this year.

“It would be disappointing if expansion was taken off the table in conjunction with the next TV deal. It would be very disappointing for the fans and the stakeholders of the game in Western Australia but it’s in the hands of the powers that be.’’

Bears CEO Greg Florimo said it was exciting that expansion was back on the agenda and it would be hard to overcome if more teams weren’t added. “If they say ‘no’, while that would be disappointing, that would probably put an end to it for us,’’ Florimo said.

“At the moment we’ve got 8000 members and all these things in place ready to go. How do we keep those people hot for another three or four or five years?

“It would probably be a matter of starting again and rebirthing the whole thing.

“The next deal kicks off in 2018 and if they say no to that and maybe it might be 2024, well gosh, that’s a long way away.’’

 

[El Diablo]

if the next deal brings in more money because of expansion then it can't afford not to do it

 

[East Coast Tiger]

Here we go.

 

[Perth Red]

Same old same old from the clubs. Keep bailing out unviable clubs drawing 10k fans whilst the game misses the opportunity to grow into new markets with more long term lucrative outcomes. Wouldn't surprise me, our great game has been run terribly for hundred years, hence why it is still so regionally isolated.

Lol I'm sure warl CEO is pleased he was called a development officer!

 

[East Coast Tiger]

You could get a $100B Tv deal and give every club $1b a year and they'd still piss it away. The cash would all end up in the pockets of the elite players and player managers and clubs would be crying poor.

This TV deal growth is a massive red herring. For every extra dollar going into the game I reckon there would be at least 95c of it going to players, managers, other club staff, referees and administrators as wage increases or on more staff and consultants at the NRL to push pens around. The nett result is that there's actually very little real growth in revenue for the sport that can be spent on growing it. And of that most is pissed away on things like having 27 referees at every game or on an integrity unit with no integrity. More cash = more waste.

 

[Loose Cannon]

If all current clubs need to be sustainable before expansion is considered, it will never happen. I am all for diligent processes being implemented before taking the leap, but there will always be basket-case clubs at any given time.

A bid team may well come up with a fantastic business structure, and yet may be denied inclusion whilst several non performing entities are bailed out time and again. Each club will go through hard times, but although only early in its implementation, this performance criteria they have spoken of doesn't seem to have any penalty for not complying with the targets being set.

A team in Perth, Brisbane 2, NZ2, etc. has growth/exposure potential for the NRL, likely exceeding most of the existing clubs. Though I want all clubs to survive, they should also be competitive, at least off the field.

 

[DC_fan]

Problem is easily solved. The NRL can expand and keep the same number of teams by cutting some Sydney teams.

 

[Lockyer4President!]

Surely the pros of a second Brisbane team and Perth would far outweigh the cons?

This isn't anything like the AFL expanding with GWS/GCS. Both Bris2/Perth would likely be above average in most rankings. The stadiums are there, the fans & sponsors are waiting, the tv stations want them, etc.

 

[RL The greatest game]

if the next deal brings in more money because of expansion then it can't afford not to do it

Correct

You could get a $100B Tv deal and give every club $1b a year and they'd still piss it away. The cash would all end up in the pockets of the elite players and player managers and clubs would be crying poor.

This TV deal growth is a massive red herring. For every extra dollar going into the game I reckon there would be at least 95c of it going to players, managers, other club staff, referees and administrators as wage increases or on more staff and consultants at the NRL to push pens around. The nett result is that there's actually very little real growth in revenue for the sport that can be spent on growing it. And of that most is pissed away on things like having 27 referees at every game or on an integrity unit with no integrity. More cash = more waste.

Correct

Surely the pros of a second Brisbane team and Perth would far outweigh the cons?

This isn't anything like the AFL expanding with GWS/GCS. Both Bris2/Perth would likely be above average in most rankings. The stadiums are there, the fans & sponsors are waiting, the tv stations want them, etc.

Correct.

 

[Diesel]

A Perth and Brisbane team would outweigh two lower drawing Sydney teams

 

[RL The greatest game]

A Perth and Brisbane team would outweigh two lower drawing Sydney teams

By a country mile.

 

[franklin2323]

Same old same old from the clubs. Keep bailing out unviable clubs drawing 10k fans whilst the game misses the opportunity to grow into new markets with more long term lucrative outcomes. Wouldn't surprise me, our great game has been run terribly for hundred years, hence why it is still so regionally isolated.

Lol I'm sure warl CEO is pleased he was called a development officer!

I am all for expansion but GC and Newcastle are RL heartlands and only survive through NRL handouts. What guarantee is there Perth wouldn't end up like GC? Richardson is pro expansion so will happen. atleast it's being discussed

 

[RL The greatest game]

I am all for expansion but GC and Newcastle are RL heartlands and only survive through NRL handouts. What guarantee is there Perth wouldn't end up like GC? Richardson is pro expansion so will happen. atleast it's being discussed

If Newcastle are relying on hand outs Rugby League has huge problems.

 

[undertaker]

You could get a $100B Tv deal and give every club $1b a year and they'd still piss it away. The cash would all end up in the pockets of the elite players and player managers and clubs would be crying poor.

This TV deal growth is a massive red herring. For every extra dollar going into the game I reckon there would be at least 95c of it going to players, managers, other club staff, referees and administrators as wage increases or on more staff and consultants at the NRL to push pens around. The nett result is that there's actually very little real growth in revenue for the sport that can be spent on growing it. And of that most is pissed away on things like having 27 referees at every game or on an integrity unit with no integrity. More cash = more waste.

This was always going to be the fear with the massive increase in the salary cap during this tv rights deal, that the huge surplus of money would go into the pockets of the top elite players rather than retain others. Or like the 80/20 rule, the top elite 20% of players get 80% of the money.

Players like Keiran Foran getting nearly $1.2 million/year at Parramatta is a joke.

 

[undertaker]

If all current clubs need to be sustainable before expansion is considered, it will never happen. I am all for diligent processes being implemented before taking the leap, but there will always be basket-case clubs at any given time.

Well, it did happen with the Titans. When it was announced in 2005 the Titans would be the 16th team in 2007, there were plenty of NRL teams that were struggling financially and weren't 'sustainable' as you say it. Souths were an absolute basket case on and off the field at the time until Crowe/Holmes a Court came on board the following year.

So, why all of a sudden the change in criteria to make sure all clubs are sustainable before expansion is considered? It's this sort of inconsistency and hypocrisy from the NRL that is turning casual fans away from the game.

 

[Perth Red]

no issues with some clubs getting extra financial support when needed. Its unfashionable to say it but fact is some clubs are worth more financially, strategically and longer term to the NRL than others. Its when majority of clubs are holding their hands out with no effort to support themselves, or unable to attract sponsors because their own miss management has damaged their brand, that is the issue, especially when that is holding the game back. the clubs have had millions of $'s extra in the last 3 years. They are a bottomless pit that will just sponge up anything the NRL gives them and still ask for more. Time for some tough love and for the game to have a strong plan for where it wants to be by 2023.

 

[Perth Red]

re the NRLs new found mega millions and seemingly little benefit to the whole game from this wealth, seems the Australian way! Despite squillions of $'s in mining royalties for the last 7 years the Govt's are now pleading poverty because the resources price has dropped. Hello, it was always going to drop, how about some long term investment and planning?

 

[Nerd]

The expansion decision should be made as to whats best for Rugby League not whats best for individual clubs.

 

[CowboyFuriousFury]

Typical selfish and insular NRL clubs looking out for themselves and not see the bigger picture of expansion. The heart-land clubs had decades to get there house in order but fail to do so is pure administration incompetence, it's 2015 time to sink or swim. Bring on WA/Brisbane 2 hopefully it motivates the other clubs to stop relying on handouts and bring there clubs to sustainability.

 

[TheFrog]

Players like Keiran Foran getting nearly $1.2 million/year at Parramatta is a joke.

The Parramatta and Gold Coast managements must have been impressed last weekend watching their expensive new halves fail to get on top of a makeshift (to say the least) halves combination from the NSW Cup, one of whom is in fact a hooker, who had never in their lives played together before in the halves at any level.