Daily Telegraph Article Today - Gallop For Expansion

[Lockyer4President!]

In more good news the WARL is making a bid to get the All stars game in Perth for 2012.

I wonder if 12 months is going to be enough to build the club, recruit players and backroom staff etc. I appreciate their hands are tied until they get the TV deal signed and delivered but it will be cutting it close if we are to have two new teams in 2013 and the decision won;t get made till mid/late next 2011.

Great news though and as a frustrated RL fan in the West it is sweet music to the ears to hear Gallops change of heart!

The good thing is that the Reds & Bears admin, facilities, etc are already there; they just need the go-ahead to recruit first-grade standard players and admin/support staff like you said. I don't think they'll need too much lead-in time really.

 

[Brutus]

Having perth and melbourne in the same comp would be senbloodysational.

 

[Quidgybo]

reat news though and as a frustrated RL fan in the West it is sweet music to the ears to hear Gallops change of heart!

I don't think Gallop has really changed his mind on this. He just hasn't been in a position to promise anything prior to now. It was exactly the same with the Titans introduction. There was absolutely no commitment from anyone in the NRL that any expansion was going to happen in 2007 until about two years out - ie. once they started to get an idea that the new television deal would be able to fund it. And very quickly thereafter, the Gold Coast bid was accepted. That was May 27th 2005 for kickoff in March 2007 - 1 year 10 months.

I'd suggest with about about 2 years 9 months until the next TV deal starts, Gallop is starting to get an idea that the next TV deal will allow expansion. Hence the change in tone. He's still not in a position to commit to anything. But if the previous timeline is any guide, we can expect to hear a more firm commitment to expansion around March next year and official acceptance of bids in a touch under 12 months. And that's exactly what Gallop has said in the article quoted. Such a timeline would give the new teams about the same lead time as the Titans.

Leigh.

 

[jargan83]

Dear god let this happen!!

Agree with Brutus, having Perth and Melbounre in the NRL would a huge step forward.

It is a good time to be a fan of RL in the West with all this happening

 

[chrisD]

The standard of RL this year has been below par for my tastes, spreading the talent pool thinner over more clubs is my primary concern with expansion.

 

[juro]

Not my decision, that's up to the clubs themselves, but the NRL could make relocation to the CC happen within a decade if it was serious. In the past they've said there is $8m on offer for a team to relocate. But given a $4.2m salary cap, annual operating expenses and the costs of relocation, $8m doesn't really look that much in itself.

So take that $8m already on offer and put it in the bank. Now add another $1.5m every year to the account and wait to see who jumps first. Maybe no one will jump after five years when the jackpot is at $15.5m but I guarantee you someone will jump before the pot reaches $23m at ten years. It's a game of chicken with winner takes all. Wait too long in the hope of a bigger pot and a rival club could jump first, leaving you with nothing.

No club is forced or targeted to relocate, the decision remains totally in the hands of the clubs themselves. The NRL just makes it increasingly attractive for someone to volunteer to help the game achieve its aims without having to create new expansion licences for areas that don't add much to the value of the television deal.

Leigh.

Yeah, I've been thinking the same thing for a while. If the NRL want it to happen, they just need to find the right price that a club would accept. Of course, the NRL would have to be able to come up with the cash too...

Maybe they could give other non-financial benefits such as extra salary cap exclusions.

 

[juro]

The other extreme is just to totally bite the bullet. Say, okay Sydney there are going to be 4 brand new clubs. New names, new logos, everything. Existing clubs all get demoted to a Sydney comp. Fans can still follow them if they wish but that is it.

That frees up the comp to move wherever they want. Extra Brisbane team, Perth, Wellington, central QLD, PNG. BANG!

Of course, it wouldn't be popular in Sydney but if the quality of the game is good enough, people will come on board.

What is more important, your club or the game?

 

[1 Eyed TEZZA]

The other extreme is just to totally bite the bullet. Say, okay Sydney there are going to be 4 brand new clubs. New names, new logos, everything. Existing clubs all get demoted to a Sydney comp. Fans can still follow them if they wish but that is it.

That frees up the comp to move wherever they want. Extra Brisbane team, Perth, Wellington, central QLD, PNG. BANG!

Of course, it wouldn't be popular in Sydney but if the quality of the game is good enough, people will come on board.

What is more important, your club or the game?

:lol:

 

[juro]

I did say it was extreme...

 

[BIKER DRAGON]

A team in Perth and Gosford have to be the next 2 in the door and not forgetting a relocation for the Starving Sharks is a must too. Emu Park in QLD sounds a good place to pack 'em off too.

 

[eagles4eva]

The other extreme is just to totally bite the bullet. Say, okay Sydney there are going to be 4 brand new clubs. New names, new logos, everything. Existing clubs all get demoted to a Sydney comp. Fans can still follow them if they wish but that is it.

That frees up the comp to move wherever they want. Extra Brisbane team, Perth, Wellington, central QLD, PNG. BANG!

Of course, it wouldn't be popular in Sydney but if the quality of the game is good enough, people will come on board.

What is more important, your club or the game?

That thinking was called superleauge, which almost crippled the game..

How about before you destroy the code, we wait and see the outcome of the independent commission and the new TV deal...

Lots of If’s, but should the revenue be around 1 billion, the NRL coffers will be able to grow the brand without killing off the whole Sydney NRL market..

 

[juro]

I reckon Superleague wasn't the problem. The problem was that there was a war between Superleague and the ARL, and then worst of all, a compromise.

If Superleague had won without a fight, rugby league in Australia would probably be in a better position today compared to the NRL.

 

[eagles4eva]

I reckon Superleague wasn't the problem. The problem was that there was a war between Superleague and the ARL, and then worst of all, a compromise.

If Superleague had won without a fight, rugby league in Australia would probably be in a better position today compared to the NRL.

The problem was (and besides the waring parties) which teams go and which teams stay?

We are fine to nominated which clubs folds/merges... But in reality who?

 

[jim_57]

The standard of RL this year has been below par for my tastes, spreading the talent pool thinner over more clubs is my primary concern with expansion.

I tend to think this problem is solvable.

Hopefully Melbourne start developing juniors to NRL standard soon, then Perth can do the same once they get a Toyota Cup side.

One thing that will go along way and I can't believe it hasn't been done already is to get juniors from PNG into NRL clubs. There are 6million RL nuts with 50% of them under 25, why there are not many, if any in the NRL ir Toyota Cup is almost laughable, it comes down to sheer laziness from NRL clubs.

 

[Perth Red]

There are plenty of talented players not in the NRL. We just need a salary cap and development structure/opportunities to get them in.

 

[Quidgybo]

Not my decision, that's up to the clubs themselves, but the NRL could make relocation to the CC happen within a decade if it was serious. In the past they've said there is $8m on offer for a team to relocate. But given a $4.2m salary cap, annual operating expenses and the costs of relocation, $8m doesn't really look that much in itself.

So take that $8m already on offer and put it in the bank. Now add another $1.5m every year to the account and wait to see who jumps first. Maybe no one will jump after five years when the jackpot is at $15.5m but I guarantee you someone will jump before the pot reaches $23m at ten years. It's a game of chicken with winner takes all. Wait too long in the hope of a bigger pot and a rival club could jump first, leaving you with nothing.

No club is forced or targeted to relocate, the decision remains totally in the hands of the clubs themselves. The NRL just makes it increasingly attractive for someone to volunteer to help the game achieve its aims without having to create new expansion licences for areas that don't add much to the value of the television deal.

Yeah, I've been thinking the same thing for a while. If the NRL want it to happen, they just need to find the right price that a club would accept. Of course, the NRL would have to be able to come up with the cash too...

The NRL just got $4.5m per year extra. All that went into grant and salary cap increases for the 16 existing clubs. But regardless, with the next television deal starting in 2013, I don't think $1.5m per year for a finite number of years is going to be particularly hard to find.

Think of it this way, if the grant goes up to $6m per club with the next TV deal then each new club added to the league costs an extra $6m in addition to the cost of funding the existing 16 teams ($96m). That is an ongoing cost. But if those same areas can be tapped thru relocation instead of expansion then instead of committing $6m extra per year in perpetuity, you commit the current $8m on offer plus $1.5 extra per year until a club takes that jackpot. If it takes ten years before a club jumps then you've spent $23m total with zero ongoing cost to get a team moved to the CC or Perth or wherever. In that same decade you would've spent $60m to fund a new club (ie. $37m more) and still be liable for $6m every year thereafter.

Now, despite the above, I don't think new areas should be brought into the league exclusively by relocation any more than they should be only by expansion. The general principle I follow is that relocation makes sense where a new area would not greatly increase the value of our television contract - ie the cost of funding the additional team over the life of a television contract is not much more than break even (using the above example of a $6m grant, the new team increases the value of a 6 year television contract by only $40m or less). On the other hand, I think expansion is justified where a new team would increase the contract well beyond the level of break even such that the team not only pays for itself but gives the other clubs and other areas of the game a significant boost.

I think the Central Coast falls into the first category - good for the game certainly but not much more than break even in terms of increasing the value to television. I think a fourth Queensland team and second NZ team fall into the second category - massive boosts to the attractiveness for television networks. Perth is more difficult. It might be reasonably attractive to television networks but that may be offset by the need for increased subsides to make the club successful in a frontier market (like Melbourne). But for the same reason, even with a relocation jackpot, it is also less attractive for existing clubs as a relocation destination.

Leigh

 

[flamin]

The question I have is - are we expanding to increase the TV deal or hoping an increased TV deal will fund expansion?

For the other codes in Australia it appears to be the former, but the NRL appears to be taking the latter side.

The grant should be increased to $6 million per club regardless of expansion. If there's an extra game on per week, that should be added to the value of the rights.

 

[imasharkie]

League is already strong in CC and QLD, i'd much preffer Perth come in the NRL first and Wellington not too far behind, expanding should be about venturing into new markets.

Personally I don't think their should be any New Zealand teams in our Australian comp.
The NRL should cap the ammount of overseas players in each teams 25. Two should be the maximum.

 

[Quidgybo]

The question I have is - are we expanding to increase the TV deal or hoping an increased TV deal will fund expansion?

For the other codes in Australia it appears to be the former, but the NRL appears to be taking the latter side.

The AFL's stated position is they are expanding for the increase in their TV deal from offering an extra game. There's of course more to it than that but that's how they are justifying it to their own clubs.

The grant should be increased to $6 million per club regardless of expansion.

If the television deal doesn't increase enough to fund an increase to $6m then you can't increase it to that. It really is that simple. If after the television deal is signed the game can afford to increase total grants to $88m per year then that's either $5.5m per club for 16 clubs or $4.9m per club for 18 clubs. The number of clubs is intrinsically linked to how much the grant can be increased.

Let's take a more in depth example. Say the television networks are willing to pay $100m for the existing 16 club competition and $110m for an 18 club competition. Then ignoring other expenses for the moment, that'd be $6.25m grant for each club in the existing 16 team comp or $6.11m for an 18 team comp - ie. even though the extra clubs bring in more money, they actually mean everyone gets less. But let's say the television networks offer $130m for 18 clubs if the new clubs are in specific areas that add significantly to ratings. Now each club would get $7.2m - ie. not only do the new clubs pay for themselves, they improve the entire comp by $1m per club. How attractive the two new teams are to television is a critical consideration in any expansion.

If there's an extra game on per week, that should be added to the value of the rights.

Yes it should and almost certainly will. As I pointed out above, that's what the AFL are telling their own clubs - expand to add extra game so as to increase the television rights. But adding any two clubs will add an extra game. The real question is which two clubs would add the most value to the television contract over and above just the benefit of an extra game.

Leigh.

 

[Quidgybo]

Personally I don't think their should be any New Zealand teams in our Australian comp.
The NRL should cap the ammount of overseas players in each teams 25. Two should be the maximum.

New Zealand television provides 1/5th of the competition's television income ($20m per year compared to $80m generated from Australia) even though NZ only provides 1/16th of the teams. It is the third biggest Rugby League market in the southern hemisphere behind NSW and Qld, and is light years ahead of the next biggest (Vic or WA). As a professional sports league with operating costs of more than $100m per year and struggling to financially match rival codes, the NRL would be stupid to ignore that market.

Leigh.