How News lost the game
by BRAD WALTER - 11/05/13, 3:00 AM
MANLY and South Sydney players had just finished a game so brutal that four judiciary charges would stem from it - but the hostilities were put aside when senior members of both teams met afterwards.
As they gathered after the round-seven match at Brookvale Oval, the Sea Eagles and Rabbitohs players discussed a Daily Telegraph story that day reporting a possible link between Jon Mannah's death and peptide use at Cronulla in 2011.
''After the game, the whole talk in both camps was all about how we're not going to cop this any more,'' a source close to the players told Fairfax Media. ''The way this had been handled was completely unfair, and the leaders of the players from both clubs spoke about it after the game.''
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The following day, Rugby League Players' Association president Clint Newton issued a lengthy statement condemning the story as ''disrespectful and offensive''.
''I do not think I can adequately describe the depth of ill-feeling among NRL players about the Jon Mannah story which was published on Friday,'' Newton said.
The Penrith forward had been bombarded by phone calls and messages from other players wanting the RLPA to take a stance against the tabloid.
He wasn't the only one receiving calls from senior players about the issue. NRL chief executive Dave Smith opened the following Tuesday's CEOs meeting by telling the club bosses that Australian captain Cameron Smith had contacted him about suspending the accreditation of the three journalists who wrote the story. Fairfax Media has been told that five other leading players made similar phone calls.
The proposal was discussed by the 16 club chief executives, who decided against it but issued their own statement, which described the Telegraph's handling of the Mannah story as ''something that has disappointed every club and every player''.
In doing so, they announced that the game was now fully independent and free of the stranglehold that News Ltd had over it for more than 14 years.
It was a watershed moment in the relationship between the code and the media company that until 15 months ago had controlled it but now has no ongoing commercial relationships with the NRL.
According to the five current and former club chief executives, three directors, NRL insiders and former senior News Ltd employees that Fairfax Media spoke to for this story, the club bosses would never previously have been ''allowed'' to issue such a statement criticising another arm of the media company.
The fact that none of those interviewed - who also include journalists, senior players, agents and others heavily involved in the game - wanted to be named demonstrates the power News Ltd still wields.
However, as a group, the players and clubs now have the confidence to speak out without fear of upsetting the game's former masters, and they are able to do so with the backing of the NRL, which issued the statement on behalf of the CEOs.
Remarkably, two of the clubs whose chief executives put their name to the joint statement are owned by News Ltd, and Cameron Smith, whose role was reported this week in the Media section of The Australian, is the captain of one of those clubs, the Melbourne Storm.
''That would never have happened before,'' one chief executive said. ''There have been plenty of examples over the years where someone was upset about something the Tele had written - we all have at one time or another - but no one would do anything.
''The attitude was that they owned half the game so there's not much we can do about it, and basically anyone who stood up to them or didn't conform to their access needs was persecuted.''
But player and club sources told Fairfax Media the statements issued by the RLPA and the CEOs were about more than the Mannah story.
This, they said, was about the game flexing its muscles for the first time since the break-up of an often bitter relationship between Australia's largest media empire and one of the country's biggest sporting codes.
With many in league believing that a withering newspaper industry now needs the game more than the game needs it, this is a story that is set to be repeated with growing regularity.
''That statement was as much about the clubs and the players getting behind the Independent Commission and the decision-making process as anything else,'' said another chief executive, who was at the April 30 meeting.
''There is a real feeling of camaraderie and a real feeling of taking the game forward in a positive way. All 16 clubs put their hands up and all 16 clubs passed that decision.''
After more than three years of protracted negotiation, the formation of the ARL Commission on February 10 last year did not receive the fanfare the occasion warranted but its significance can not be underestimated.
For the first time since Channel Ten went into receivership and was unable to meet a scheduled payment in 1990 on its $48 million five-year deal to televise the premiership, State of Origin and Test matches, the game is no longer beholden to either of Australia's two media giants - the late Kerry Packer and Rupert Murdoch.
With Channel Nine having taken over the broadcast rights at a time when Channel Seven was also in financial trouble, there was a sense of loyalty to Packer for keeping the game afloat.
He was awarded the pay-TV rights, and after News Ltd executives had finished outlining their Super League plan to all 20 clubs in February, 1995, Packer was allowed into the meeting at NSW Leagues Club.
Despite some clubs having already committed to News Ltd, all 20 voted against the proposal after Packer threatened to ''sue the arse off'' anyone who breached his deal with the ARL.
Packer, whose pay-TV interests were aligned with Optus against the Murdoch- and Telstra-owned Foxtel, also warned: ''You don't want to let your game be run by a media baron.''
He backed the ARL in the ensuing Super League war until reaching a peace deal with Murdoch that led to a merger of the two rival competitions in 1997 to form the National Rugby League.
As a result, the control of the game shifted to the Murdoch empire through News Ltd's 50 per cent stake in the NRL.
OFFICIALLY, it might have been a joint venture with the ARL, but News Ltd's financial power ensured it called the shots - much to the frustration of many in the game, particularly those who had been on the other side of the Super League divide.
''Although it was a partnership, the game for 14 years was in fact run by News Ltd because the ARL were too weak and too intimidated by them,'' one long-serving official said.
''News Ltd had no real interest in the game besides wanting the broadcast rights, which is how the whole Super League thing started.''
One former official estimated that the previous two broadcast deals before the current one that began this season had been undersold by a combined total of more than $250 million.
As a result, clubs and players complain that they saw little real growth in their income from the time of the NRL's formation in 1998 until now, with the salary cap rising from $3.25 million to $4.4 million last season, including allowances.
The minimum wage during the same period remained at $55,000 and the annual grant to clubs was less than the salary cap.
''We achieved nothing and we gave the commission nothing,'' a club director said. ''We gave them an empty balance sheet, there was nothing on it - not one asset.
''In the 14 years of the partnership, we did not create any wealth, we did not build any equity and we did not expand the game.
''We should have had two more teams somewhere, and at least one in Queensland, which is the heartland of rugby league.
''But News Ltd didn't want another team in Brisbane because they owned the Broncos, and they were the only club that wasn't losing money.''
Under the ARL Commission, the club grant has been increased to $7 million while the salary cap for this season is $5.85 million and the minimum wage for an NRL player is now $80,000.
Having negotiated broadcast- and new-media rights deals worth more than $1.2 billion, the ARL Commission has announced plans for a $200 million future fund.
''The elephant in the room was always the conflict of interest that News Ltd had with the broadcast rights,'' the former official said. ''You couldn't be the owner of the rights and the buyer too, but that is what they did.
''We put up with that facade for many, many years to the detriment of the game, and there was a lot of money lost that we should have had. Sure it is coming back now but the game can never recoup the money that was lost.''
Another issue that demonstrated the potential conflict of interest News Ltd faced as part-owners of the game was the 2010 Melbourne Storm salary cap scandal
While it could never be suggested that the Storm got off leniently after being stripped of two premierships and forced to play the 2010 season for no competition points, the role the company had played in helping to decide those penalties fuelled conspiracy theories about whether anyone from News Ltd was aware of the rorting.
An independent investigation cleared News Ltd of any involvement or knowledge but the controversy is likely to resurface after a book on the salary cap scandal is released in August.
MANY believe News Ltd's ownership of the NRL also cost the game access to the same level of government funding the AFL received during that time.
''Over the years, people in government and government ministers would say, 'Why should we provide funding to you when you are News Ltd?' so there is an opportunity there now without News,'' one NRL insider said.
One condition of News Ltd's exit of the game was the media company being given first-and-last rights on future broadcast deals until 2027.
News Ltd now owns 100 per cent of Fox Sports, and as part of the deal to maintain the pay-TV network's coverage of five matches per round, the company agreed to forgo the the first-and-last-rights agreement.
''A lot of people understandably just focused on the money side of it but clearly that freedom to negotiate the next deal is a big benefit,'' the insider said.
News Ltd is also paying about $100 million a year for the pay-TV rights after the ARLC played hardball during the negotiations.
At one stage, it is understood the ARLC considered awarding the free-to-air rights to Seven or Ten and broadcasting the remaining matches on the internet as they were unhappy with the pay-TV component of the joint Nine-Fox bid.
''Who knows what will happen in five years time when we negotiate the next deal,'' another official said. ''I think we will have real power to make decisions about the way we broadcast games.''
The NRL is keeping apace with the changing media landscape through the establishment of NRL Media, a partnership with Telstra that will soon employ 12 journalists.
The new digital media unit will be headed by editor Nigel Wall, and while the NRL insists it isn't planning to challenge News Ltd and Fairfax, many in the game believe they will have an alternative to dealing with traditional media outlets.
''The fact that an editor has been appointed and it has been announced that journalists are going to be employed shows that the game, as part of that digital media partnership with Telstra, is starting to invest in a media business,'' one NRL official said.
Another official was more pointed. ''Things are so much more strategic than before,'' he said. ''Dave Smith doesn't think about what is in the papers, he thinks about what we are doing in digital media and how we are growing the business.
''He just focuses on the actual business itself, he doesn't care if he isn't heard or seen. It's another world, and there are some people who just haven't come to grips with that.
''The way the game does business now there are no leaks, and I think that is one of the frustrations of some people at News Ltd because all of a sudden they can't set the agenda.''
News Ltd's initial reaction to the criticism of the Mannah story was to question whether the 16 club chiefs were taking the ASADA investigation seriously enough in an editorial published in the Telegraph.
It was also notable that the paper did not run any league photos on the back page for the remainder of last week, and its coverage of the NRL was pushed further inside the sports section.
A feature called ''Yesterday's Hero'', which was organised by the NRL, also did not run, and a number of clubs said they were told scheduled stories would not appear - including one that Fairfax took over on South Sydney achieving 25,000 members.
However, a News Ltd spokesman said the company understood the reaction to the Mannah story from the players and clubs.
''We understood their concerns, and indeed those of the Mannah family, but we fully support The Daily Telegraph's right to print stories that are in the public interest,'' the spokesman said.
Asked about News Ltd's response to the chief executives of the two clubs owned by the company putting their names to the statement, the spokesman said: ''As with any chief executive, they should act in the manner they believe is best for their business, and so we understood why they supported the issuing of the statement.''
He also said News Ltd was pleased ''that the NRL is in great health, with all the foundations to grow the game even further'', and was satisfied with its relationship with the NRL, its players and clubs.
''We love the game and support it day in day out throughout our organisation,'' the spokesman said. ''There will be times when our papers are obliged to report on matters it rather they didn't, and offer criticism where they think is justified, but that is what our consumers expect of our papers.''
Even before the Mannah story, the Telegraph was at odds with the new NRL hierarchy, and recently ran a back-page story in which 2GB broadcaster Ray Hadley accused Smith of being a ''dunce''.
ALAN Jones has also been quoted in the Telegraph criticising the appointment of a former banker to run the game, and the paper's columnists have regularly taken shots at Smith - a former Lloyds International chief executive - and ARLC chairman John Grant.
''The stories they ran on Grant last year and a couple of the stories they have run on some of the staff this year, there is definitely a big divide with News Ltd,'' one club boss said.
''What a lot of people don't get is that the game is actually independent now, and there are going to be decisions made that the clubs don't like and decisions that News Ltd doesn't like or Fairfax doesn't like, but they are decisions made for the betterment of the game. We are independent of all these influences that were there in the past.''
Bizarrely, an NRL official suggested to Fairfax Media that one reason Smith had been targeted for criticism was because the Telegraph had been unable to get an interview with Sonny Bill Williams.
Roosters and Bulldogs officials supported that theory through anecdotes about their dealings with the paper over Williams, including the Telegraph listing his manager Khoder Nasser as the Roosters CEO in a team list published on the day of this season's opening NRL match.
Fairfax Media was also told that the Telegraph had avoided photos that showed the Roosters and Souths sponsors and that the paper had an editorial policy not to run photos of Wests Tigers star Benji Marshall.
Marshall and fellow Fairfax Media columnist Phil Gould, who is also a Channel Nine commentator and Penrith general manager, have been the subject of regular potshots and criticism, including this week.
''A lot of the frustration behind the way the media treated the game was one of the main reasons the commission was formed,'' a chief executive said. ''Everyone knew that the time had come. It took four years but it is the best thing that has happened to the game.
''Finally, we are starting to get some independence away from News, and that is fantastic for our game. The clubs see this as the beginning of a new era.''
