Leagues Club members asked to bail out Eels to tune of $10m
Nick Tabakoff, Editor-at-Large, The Daily Telegraph
July 7, 2016 12:00am
Subscriber exclusive
THE scandal-plagued Parramatta Eels will cop a record $10 million-plus loss for the 2016 year, following the exposure of its systematic salary cap cheating program.
The huge loss will force the NRL club’s cashed-up parent, the Parramatta Leagues Club, to cover the massive sum just to bail the Eels out.
The Daily Telegraph understands before the salary cap scandal broke, internal projections at the Eels were that Parramatta would require an $8m handout from the Leagues Club for 2016.
But the club is now projecting this figure will blow out by $2 million-plus to between $10-$10.5m because of:
● The NRL’s imminent $1m fine on the club;
● Its loss of two major sponsors, Infinity and Cleanaway, following the cheating revelations ($550,000 a year);
● Spiralling and ongoing legal fees for both the Eels’ “Gang of Five” and some of its troubled players ($500,000 and counting), and;
● Loss of its prizemoney from winning this year’s Auckland Nines ($370,000);
These factors alone mean the club’s losses will now easily top $10m for the 2016 season, and possibly more.This will put yet more pressure on the beleaguered Eels, days out from the likely final bans of the Gang of Five — suspended Eels chairman Steve Sharp, CEO John Boulous, deputy chairman Tom Issa, director Peter Serrao and football boss Daniel Anderson — over the cap cheating.
The massive loss takes subsidies given by the Leagues Club to the Eels to more than $18 million for the 2015 and 2016 financial years: making the club by far the most financially dependent in the NRL.
The subsidies provided by the Leagues Club — the member-based, pokie palace in Parramatta’s heart — mean members’ money is bailing out the operations of the football club.
The Eels have for some time been relying on the rich Leagues Club, which in 2015 had record revenue of $82m, total members funds of $54m, and profits of $6.6m.
Ex-Eels sponsors Infinity ($400,000 a year) and Cleanaway ($150,000 a year) both invoked clauses allowing them to depart because their brands were brought into “disrepute” by the scandal.
Infinity has been replaced by Eels apparel partner Blades as back-of-jersey sponsor for the Eels — for a fraction of the original Infinity deal.
The contract of the club’s major sponsor, Dyldam, is also up for renewal at the end of 2016.
Meanwhile, a second proposal to overthrow the Eels board was registered with the club yesterday, with a third expected to be lodged shortly.
Eels member Chris Losco, who is leading one of the proposals to be put to an extraordinary meeting in late August, said yesterday: “The financial mismanagement of the Eels shows this board is incapable of turning around the performance of what should be a powerhouse of Australian sport.”
Eels interim boss Ian Schubert could not be reached for comment.
