This NRL club is turning property developer to wean off pokies
Edmund Tadros
Media and Marketing Reporter
The once-struggling Parramatta Eels club will diversify its income stream away from poker machines by leasing commercial and retail space in a new $65 million rugby league facility.
The move is being made before potential gambling reforms by the NSW government that could drastically cut the income of the Parramatta Leagues Club, which owns the football club.
The Eels’ centre of excellence is being built in the Sydney suburb of Kellyville and will be the largest dedicated rugby league facility in the country, with five playing fields. It is due to be completed in 2024.
“We’ve gone from a significant loss-making enterprise back five or six years ago to a club that has generated profits in excess of $1 million in each of the past three years,” Eels chief executive Jim Sarantinos said.
“This is quite a strong result given the history of the club and given the landscape of rugby league.”
All three levels of government have chipped in to build the new sports centre: $33 million from the NSW government; $15 million from the Commonwealth; more than $10 million from Hills Shire Council; and about $4.5 million from the Eels NRL club.
The club’s new-found success has been on and off the field. The Eels have featured in five of the past six NRL finals series, and made it to this year’s grand final before they were beaten by the Penrith Panthers.
Away from the field, the club’s commercial income is now about $20 million a year, an increase of about 51 per cent from 2019.
Commercial, broadcast income
The club’s commercial income comes mainly from sponsorship, memberships, game-day revenue, merchandise and hospitality.
The Eels NRL club also receives funding via the NRL’s broadcast agreement with Foxtel and Nine, which publishes The Australian Financial Review.
“Thankfully over the past three years, we’ve been able to get ourselves to a position where the football club is profitable in its own right,” Mr Sarantinos said. “So, we’re not dependent on funding from the leagues club for our sustainability.”
The property income from the Kellyville facility will add a third major source of revenue.
The Eels, like many other clubs, had traditionally relied on poker machine income for funding.
But in NSW, Premier Dominic Perrottet is pushing to turn poker machines cashless after the NSW Crime Commission warned they were being used to launder millions of dollars in illegal cash.
The move has generated opposition from clubs and hotels, which rely on poker machine income, and comes less than four months out from the state election.
NSW government data shows that clubs in greater western Sydney house more poker machines and generate more revenue per premise than in other parts of the state.
Parramatta Leagues Club is a major pokie venue, housing about 440 of the approximate 1200 machines in the local government area.
The Eels’ turnaround has been remarkable. In 2016, the Parramatta board was sacked and replaced with an administrator after officials were accused of using inflated invoices to secretly pay players.
By that stage, the Eels already had been fined by the NRL for cheating the salary cap, had competition points deducted and certain officials at the club were deregistered.
The administrators put in place a new structure that allowed the directors of the football club to operate without interference.
NRL chief executive Andrew Abdo, who is negotiating a salary cap with clubs about how much they can spend on players next year, wants each club in the competition to have its own community-based sports centre.
“I think that the Eels leadership, the board, their chairman [Sean McElduff] and CEO [Mr Sarantinos], have done a terrific job. As an NRL club, they have performed well on the field ... and also off the field,” Mr Abdo said.
“Parramatta is in the heartland of Sydney, and all our clubs are community-based clubs and the Eels have done a terrific job of connecting with their community.
“[The Eels’] strategy and mission of diversifying their revenue should be commended.
“Our mission is that every one of our 17 clubs has a fortress, a home stadium, and a centre of excellence for male and female players, boys and girls.
“The Eels centre is an example of a community asset, with community access to green areas and space to play touch, tag and tackle grassroot competitions.”
Clubs that already have centres of excellence include the North Queensland Cowboys, Brisbane Broncos, Wests Tigers, the Panthers and the Manly-Warringah Sea Eagles.
The St George Illawarra Dragons, Canterbury-Bankstown Bulldogs, South Sydney Rabbitohs and Cronulla-Sutherland Sharks are among the NRL teams at various stages of planning to build their own centres.
Boardroom chicanery
The view that NRL teams should be doing more to diversify away from pokies income is shared by Christopher Brown, chairman and founder of the Western Sydney Leadership Dialogue, a regional not-for-profit think tank.
“They’ve shaken up the governance of the club because of the past chicanery in the boardroom,” Mr Brown, a self-confessed Eels tragic, said.
“There’s been a constant reform agenda under the new management and now it’s about their social licence.
“Western Sydney has been the base of rugby league, but for too long it’s been under the shadow of pokies. Other clubs and the league should also be moving towards a better, more sustainable economic future.”
Non-pokie income
Parramatta Leagues Club is also looking to diversify its revenue away from pokies. The club also has its own construction pipeline, including a $5 million project to create a new dining area. The long-term goal is for the leagues club to be seen more as a premium hospitality venue than a pokies den.
The club has also absorbed smaller clubs that might struggle under any potential reforms to poker machine laws. Nembers of Parramatta Leagues Club will soon vote on a proposal to amalgamate with Dural Country Club.
The once-struggling Parramatta Eels NRL club will diversify its income stream away from poker machines by leasing space in its new rugby league facility.
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