Expansion fee

[flippikat]

https://www.google.com/amp/s/amp.sm...-dollar-fee-to-enter-nrl-20210206-p57060.html

Clubs are asking the NRL to charge a new club with an "expansion fee" - article saying it could be between $2.5 million & $5 million.

What's everyone's thoughts on this idea? As the story says, it's pretty typical for American sports leagues.

Should the NRL start charging expansion fees for new clubs?

If YES, then how much.. and what should that money be spent on?

 

[MugaB]

https://www.google.com/amp/s/amp.sm...-dollar-fee-to-enter-nrl-20210206-p57060.html

Clubs are asking the NRL to charge a new club with an "expansion fee" - article saying it could be between $2.5 million & $5 million.

What's everyone's thoughts on this idea? As the story says, it's pretty typical for American sports leagues.

Should the NRL start charging expansion fees for new clubs?

If YES, then how much.. and what should that money be spent on?

Grassroots is always the answer, but i reckon it should be divided up amongst the other 16 clubs as a shush payment, basically by accepting this $300,000, you will help by shutting the f**k up, and not derailing our efforts to expand.
Coz the one thing these clubs are good at is infighting, and as soon as money that should be theirs isn't, they'll kick up an all mighty stink, look at anything that happens with regards to politis or richardson.

a better way to divy up the possible 5 million is spread it out to the clubs that have been around since the existence of the game, a sort of heritage fund, so Rabbits, Roosters, Tigers all get the chunk of the pie, and Titans, Storm, Warriors, Cowboys are on the lower end, this shows the seniority of how as the comp expands it pays towards the founding comp that got it there, i don't think the titans should be getting the same amount as the rabbits for example

 

[steeden.]

Grassroots is always the answer, but i reckon it should be divided up amongst the other 16 clubs as a shush payment, basically by accepting this $300,000, you will help by shutting the f**k up, and not derailing our efforts to expand.
Coz the one thing these clubs are good at is infighting, and as soon as money that should be theirs isn't, they'll kick up an all mighty stink, look at anything that happens with regards to politis or richardson.

a better way to divy up the possible 5 million is spread it out to the clubs that have been around since the existence of the game, a sort of heritage fund, so Rabbits, Roosters, Tigers all get the chunk of the pie, and Titans, Storm, Warriors, Cowboys are on the lower end, this shows the seniority of how as the comp expands it pays towards the founding comp that got it there, i don't think the titans should be getting the same amount as the rabbits for example

Ah, the old Bernie Concorde Aggreement approach. Ferrari could finish last and would still receive more central funds than the winning team on the basis of them being Ferrari

 

[MugaB]

Ah, the old Bernie Concorde Aggreement approach. Ferrari could finish last and would still receive more central funds than the winning team on the basis of them being Ferrari

The comp started in 1908, its only fair that the clubs that had gone through all those years get extra, titans have existed for 13 years, Roosters for 112 years, and all the clubs inbetween, if expansion exists, its exists coz the original teams created a need and want for it, that other areas out of NSW wanted in on, so they should get a bigger piece of said pie.
You cant compare branding of Ferrari, to heritage of the comp, it has nothing to do with "Winning"
Now If it was a blanket rule of "ONLY NRL ERA" titans still get less but clubs like tigers get the same a storm, i still see that unfair.

Example lets say its 4.8 million to enter the comp as an expansion fee, this covers your club as an existing license forever.
Roosters and Tigers get $560,000.
Rabbitohs get $545,000.
Dragons get $500,000.
Bulldogs get $430,000.
SeaEagles & Eels get $365,000.
Panthers & Sharks get $265,000.
Raiders get $190,000.
Knights & Broncos get $160,000.
Warriors & Cowboys get $125,000.
Storm gets $110,000
Titans gets $65,000
Basically you divy it all up by years in the comp

 

[T-Boon]

I don't think you can hang the argument for a fee on the fact NFL and NBA has fees. Those competitions are running on all cylinders, the vast majority of clubs are successful and the whole country is already represented. Non of those are factors in play with the NRL. Most of the clubs are under achievers and on life support and poorly attended. etc. and they have already profited off being apposed to the proper expansion of the game (particularly the Broncos).
I am a fan of going the other way and having the game pay the expansion clubs a bonus in their grant to increase likelihood of success.

 

[MugaB]

That's not how it works, a competion shouldn't be paying bids to come play their game, or helping them skew to make them more successful than the original clubs, its not fair to the team who was spooners of in the bottom 8 the previous year, if you go to your local sports club, you pay a fee and registration, that makes you a member,
You cant expect the NRL to fork out to bids, whilst the rest of the comp gets nothing but a smaller piece of that pie coz your throwing it at other bids.
An NRL licence should be Valuable, so much so it cost $5 million to get one after approval of the bid

 

[flippikat]

Ok, to throw another option in there.. should some of the money be set aside towards a potential relocation grant, or even for funding NRL-organised games outside existing NRL home venues?

For instance of relocation, having a fund there on condition that a club relocates to X (could be Perth, Adelaide, NZ, even Central Coast) - with a higher payment if the club goes to AFL-land. The expansion fee might not all be used for this - and might not fully cover that grant.. but other revenue sources like a 9th game (assuming 18 teams) could be used for a relocation fund too.

For the games fund, if a team wants to take 1 game per year to (say) Adelaide or Christchurch, it gets funding for that game from the expansion fee - but only for cities that could conceivably be part of the NEXT expansion, rather than country towns.. to build the game's profile there & gauge support ahead of the next phase of expansion

 

[MugaB]

Ok, to throw another option in there.. should some of the money be set aside towards a potential relocation grant, or even for funding NRL-organised games outside existing NRL home venues?

For instance of relocation, having a fund there on condition that a club relocates to X (could be Perth, Adelaide, NZ, even Central Coast) - with a higher payment if the club goes to AFL-land. The expansion fee might not all be used for this - and might not fully cover that grant.. but other revenue sources like a 9th game (assuming 18 teams) could be used for a relocation fund too.

For the games fund, if a team wants to take 1 game per year to (say) Adelaide or Christchurch, it gets funding for that game from the expansion fee - but only for cities that could conceivably be part of the NEXT expansion, rather than country towns.. to build the game's profile there & gauge support ahead of the next phase of expansion

To my understanding this is a once off fee, it won't be needed ever again, unless the ARLC are ready to expand again, as for the Adelaide, Perth, CC exhibition matches thats upto the clubs, all you can do is dangle a carrot from the tourism of that area to the clubs, you can't promise a relcation grant, from the expansion fee, that game can happen on any given year, and expansion happens once maybe every so decade

 

[Jamberoo]

Of course there should be a fee. For a new club to join and expect to get the same share of revenue that foundation clubs get is unfair. There is a precedent in Australian sport.
West Coast Eagles and Brisbane Bears paid $4 million each in 1986 to join the VFL. So each existing club got $667K. At a time when many were going broke, it kept the competition going and all clubs alive. Adelaide, Fremantle and Port Adelaide also paid licence fees in the 1990s. Gold Coast and GWS did not, as they are run by the AFL.
35 years later, $5 million seems cheap.

 

[The Great Dane]

Licensing fees are standard practice in most professional sports.

They make sense as the other teams and/or owners are undeniably effected by a new team coming into a competition in a lot of ways and compensating them for that isn't unreasonable. If anything it'd be weird if they didn't ask for a licensing fee, and if you refuse to pay one that will just make them more unwilling to support expansion.

As long as the fee isn't ridiculous, and considering the numbers being thrown around it's extremely reasonable when compared to other leagues, I don't see what the issue is.

As to talk of what the money will be spent on, well it will almost certainly be split between the existing clubs and the league like all licensing fees are, and each of those groups will use it however they wish. Any talk of using the money on anything else is just fairyland stuff frankly.

 

[mongoose]

Isn't the license fee in the A League around 10 million? hence why they will happily let any team come into that competition... western united?

 

[steeden.]

"ONLY NRL ERA" titans still get less but clubs like tigers get the same a storm, i still see that unfair.

Why is that unfair? Wests Tigers were formed in 2000, Melbourne in 1998. Or are you saying Wests should get two payments based on the Magpies and Balmain?

 

[Perth Red]

Why would you pay $5mill for a business that’s going to lose money every year? Good luck with that sale!

 

[Perth Red]

That's not how it works, a competion shouldn't be paying bids to come play their game, or helping them skew to make them more successful than the original clubs, its not fair to the team who was spooners of in the bottom 8 the previous year, if you go to your local sports club, you pay a fee and registration, that makes you a member,
You cant expect the NRL to fork out to bids, whilst the rest of the comp gets nothing but a smaller piece of that pie coz your throwing it at other bids.
An NRL licence should be Valuable, so much so it cost $5 million to get one after approval of the bid

Depends, if you are advocating for a genuine franchise model for the nrl then I’d agree. That would also mean franchises could be bought and sold and moved at the whim of the owners.
As it is we don’t have that, we have a partnered business model. Now not many businesses expand their operations without investing extra start up cash and having allowance for losses in first phase of start up. Have we learnt nothing from 1995 and the Titans? Yes you can have the Aleague model where you are on your own, sink or swim. Or the afl model that invests long term in growing its footprint strategically.

 

[T-Boon]

Did the Titans pay a fee?
It is a good thread because it forces me to admit I don't understand the system. I don't even understand club ownership.
Did the Wests Group pay a fee for the Knights? Could they sell the Knights franchise.

 

[T-Boon]

You can google the Forbes estimated value of certain sports clubs
Cowboys $5.5b
Yankees $5b

Etc

I have no idea how they value them or where the value comes from (do they make a profit each year? or is it like buying a house you know is going to go up in value?)

What are the Broncos valued at? If you wanted to buy them what would you have to pay?

 

[MugaB]

Why is that unfair? Wests Tigers were formed in 2000, Melbourne in 1998. Or are you saying Wests should get two payments based on the Magpies and Balmain?

No both clubs were founded in 1908 wests and tigers, so the mergers dont count, if anything it strengthens the reasons as to why a license fee is nessesary, St.George is 100 years old this year, do you disagree with their claim to be around less longer than the storm, just coz of the steeler merger? No.

i agree with TGD here its standard practice for major sporting codes around the globe, and if you want the clubs to unite and back a a new expansion it should be done via this type of payment, maybe not the sum i mentioned of 4.8 million, but definitely the split percentage per club, how do think the comp survives, without the founding clubs that creating the need to expand, your delusion if you think any expansion club pre 1950s doesn't claim they are more important monetary wise to the NRL now over a more recent club or entity that has only existed in the past 30 years, if all clubs started in 1908 or some other date, then an even share would be ok, but they didn't and its only fair that those who are still present get the long service years the expansion fee would offer

 

[Get Rid of The Donkeys]

Clubs get a $13m grant. If they can't get by on that then kick them out.

No both clubs were founded in 1908 wests and tigers, so the mergers dont count, if anything it strengthens the reasons as to why a license fee is nessesary, St.George is 100 years old this year, do you disagree with their claim to be around less longer than the storm, just coz of the steeler merger? No.

i agree with TGD here its standard practice for major sporting codes around the globe, and if you want the clubs to unite and back a a new expansion it should be done via this type of payment, maybe not the sum i mentioned of 4.8 million, but definitely the split percentage per club, how do think the comp survives, without the founding clubs that creating the need to expand, your delusion if you think any expansion club pre 1950s doesn't claim they are more important monetary wise to the NRL now over a more recent club or entity that has only existed in the past 30 years, if all clubs started in 1908 or some other date, then an even share would be ok, but they didn't and its only fair that those who are still present get the long service years the expansion fee would offer

The only reason the Sydney clubs and NSWRL survived to become the ARL/NRL is because they had pokie machine revenue from the 1950s. Brisbane clubs were forbidden from having pokies until the 1990s.

Sydney clubs were the bullies who used the advantage of pokies to rape and pillage the BRL for over 30 years until it killed the competition. The NSWRL, Broncos and Sydney clubs should be paying Brisbane 2 $5m if it's an old BRL club.

 

[MugaB]

Haha .. well thats not happening, but what is offered is a spot in this NSWRL/ARL/NRL for an Old BRL team either Easts, Dolphins or Jets, they can join and pay their fee and become one of the expansions or be remembered as one of the old BRL..
Be good to see the transition of history from that comp to this one too, as most certainly one of these bids will get in, hopefully no one from the NRL f**ks the expansion experience for the future bids, i just know if not done right now, with fair rules in place, they'll all reject it the next time expand gets mentioned

 

[Get Rid of The Donkeys]

Haha .. well thats not happening, but what is offered is a spot in this NSWRL/ARL/NRL for an Old BRL team either Easts, Dolphins or Jets, they can join and pay their fee and become one of the expansions or be remembered as one of the old BRL..
Be good to see the transition of history from that comp to this one too, as most certainly one of these bids will get in, hopefully no one from the NRL f**ks the expansion experience for the future bids, i just know if not done right now, with fair rules in place, they'll all reject it the next time expand gets mentioned

The clubs won't pay any money to Brisbane 2, but all 16 of them will come across as greedy wankers if they expect a licence fee on top of the $13m they already get while grassroots is run on an oily rag.