Financial fragility of the game

[Hello, I'm The Doctor]

Pfft, well i assume we will sell away our GFs for next to nothing then...

 

[gUt]

I'm hearing rumours - probably untrue - that Brisbane is considering delaying the installation of their third diamond and platinum weights room. The adversity just keeps mounting up.

 

[titoelcolombiano]

Kenty wants a 12 team competition and says the clubs in trouble are Titans, Warriors and Manly. Yeah a 12 team comp with 8 Sydney clubs will be great FFS

Yes, plus he is forgetting that a NZ team is a no brainer because of the TV money that it brings in from Sky NZ. That revenue would be nowhere near as high without the Warriors.

 

[Perth Red]

NRL clubs are facing the biggest financial crisis since the second world war.

The coronavirus pandemic has already shut down the 2020 season indefinitely, and now the question is what the competition will look like when play resumes.

There’s fears only 10 teams will survive the lockdown.

Here is where every club sits financially, and why they will or won’t survive.
BRISBANE

Considered the game’s off-field benchmark, with $14 million believed to be in the bank after reportedly amassing revenue of $52 million last year.

CANBERRA

Believed to be owned by the Queanbeyan Leagues Club, who have six clubs and posted a $1 million profit last year.

CANTERBURY

Backed by the powerful Canterbury League Club, which has been forced to drastically cut their costs after restrictions were placed on licensed venues.

Football club staff have been stood down while the season is suspended.

CRONULLA

The Sharks have begun to cull staff, including club legend Paul Gallen.

However, the Sharkies leagues club, which props up the football team, has $16 million in cash reserves and $25 million in development assets.

GOLD COAST

Privately owned by the Frizelle family who have reportedly experienced tough times in the car industry, it is believed the Titans have made moves to ease the financial burden on the club by cutting staff.

MANLY

Rumours have been rife in recent years that majority owner Scott Penn, who is dealing with a $2 million tax bill last year, that he could sell.

Penn last week said “all clubs would go under” unless the federal government stepped in.

MELBOURNE

Should be well-equipped to survive after being independently valued at more than $30 million earlier this year when Melbourne businessman Brett Ralph bought a stake to join Gerry Ryan, Bart Campbell and Matthew Tripp.

NEWCASTLE

Owners The Wests Group have stood down up to 1200 staff and placed them on leave entitlements after closing down their six licensed clubs across NSW.

However CEO Phil Gardner says the football club is secure.

PARRAMATTA

Parramatta Leagues Club are the major financial backers, and like every other licensed venue in the country, have been forced to close their doors.

The leagues club posted $2.2m profit last year and have $70m in assets.

PENRITH

The Panthers’ five leagues clubs have all closed their doors.

Group boss Brian Fletcher has told News Corp the clubs, along with the football club, are expecting a $40 million loss over the next six months.

SOUTH SYDNEY

One of the league’s safest with a league-high 28,413 members, as well as Russell Crowe and James Packer holding a 75 per cent ownership.

Retired legend Sam Burgess will get two weeks’ pay before being let go.

ST GEORGE ILLAWARRA

Partially privatised by WIN Corporation and appear to be financially viable.

The Dragons also have 15,035 registered members, but will be relieved to also receive their NRL grant.

SYDNEY ROOSTERS

The back-to-back reigning premiers are well-backed by the Easts Group, who last year posted $76 million revenue.

Chairman Nick Politis, who made $290m in two months last year, is one of the game’s heaviest hitters.

WARRIORS

They’ve returned from their temporary Gold Coast home, and CEO Cameron George says they will at least be self-sufficient in the short term.

They have nearly 13,000 members and are bank-rolled by long-standing New Zealand manufacturing company Autex Industries.

WESTS TIGERS

The Tigers are debt free but not helped by the closure of pubs and clubs given they’re backed by Wests Ashfield Leagues Club.

The club boasts a net asset balance of $60 million and bailed out Balmain Leagues Club after the entity went into voluntary administration two years ago.

https://www.foxsports.com.au/nrl/nr...n/news-story/fc47f285a8911bee388937053b32be68

 

[undertaker]

Not looking good

https://www.news.com.au/sport/nrl/n...0/news-story/69555f78a19d2d181e804e1b4c052d8f

 

[Mr Angry]

However, the Sharkies leagues club, which props up the football team, has $16 million in cash reserves and $25 million in development assets.

Now keep in mind we closed our leagues club in December 2019 with no plan to open until late 2021 early 2022.

All the clubs will survive, all the people who used to work thier will suffer. When the clubs can open again, they will starting hiring the staff required.

Even if Penn Sells his licence, Manly will endure.

I have concerns for NZ, nothing to do with money, pure politics and control. Maybe replaced by Brisbane 2. Hope to be wrong.

 

[Perth Red]

Even in these dire times the clubs self-interests are stopping the NRL doing what it needs to do! The game really needs to wrestle control away from clubs and the 2 state orgs and be a truly independent board doing whats best for RL.

NRL wants to weight bail out funding so the most in need get more. Some clubs crying its not fair and why should they get less than some just because they are wealthy. Not hard to see why our game continues to go nowhere fast!

https://www.dailytelegraph.com.au/s...y/news-story/c47a7b0448b5d5e2bd5353510139d2a6

 

[Frank Discussion]

LOLZ at the posters saying "My club will be ok because we are strong on**insert cherry picked metric**__________".

With Leagues clubs closed and TV funds at a standstill the only metric that matters is CASH IN THE BANK. Even asset rich clubs are in jeopardy because how can you liquidate an asset in this economy?

It's true that if we see a short term resumption of play most will get through it but with a long enough shutdown clubs will go to the wall. And if that shutdown is long enough no one is completely safe- doesn't matter how much cash you have. Manly, the Titans, the Tigers, The Warriors and the Dragons are in immediate strife (unless we hear of guarantees from their owners). Penrith, Parra, The Sharks, Cows next to go. If all or most of these go what becomes of the game for the remainder of clubs? Heres hoping we get on the field soon and no one falls over.

 

[bad boy bubby]

Now keep in mind we closed our leagues club in December 2019 with no plan to open until late 2021 early 2022.

All the clubs will survive, all the people who used to work thier will suffer. When the clubs can open again, they will starting hiring the staff required.

Even if Penn Sells his licence, Manly will endure.

I have concerns for NZ, nothing to do with money, pure politics and control. Maybe replaced by Brisbane 2. Hope to be wrong.

And we're actually going to be getting money from that closure as the building company is paying us for losses, no other club will get any.
Lucky in bad circumstances, unless the building company folds, then we are in a bit of strife.

 

[SpaceMonkey]

LOLZ at the posters saying "My club will be ok because we are strong on**insert cherry picked metric**__________".

With Leagues clubs closed and TV funds at a standstill the only metric that matters is CASH IN THE BANK. Even asset rich clubs are in jeopardy because how can you liquidate an asset in this economy?

It's true that if we see a short term resumption of play most will get through it but with a long enough shutdown clubs will go to the wall. And if that shutdown is long enough no one is completely safe- doesn't matter how much cash you have. Manly, the Titans, the Tigers, The Warriors and the Dragons are in immediate strife (unless we hear of guarantees from their owners). Penrith, Parra, The Sharks, Cows next to go. If all or most of these go what becomes of the game for the remainder of clubs? Heres hoping we get on the field soon and no one falls over.

cash in the banks or corporate owners with ongoing income streams. The problem for leagues club backed clubs is the leagues clubs themselves are now basically without an income. The situation for the privately owned clubs are obviously going to each be different and subject to the nature of their owners business and financial reserves.

 

[Perth Red]

cash in the banks or corporate owners with ongoing income streams. The problem for leagues club backed clubs is the leagues clubs themselves are now basically without an income. The situation for the privately owned clubs are obviously going to each be different and subject to the nature of their owners business and financial reserves.

As long as they get the players salaries down then actual running costs could be minimal for the year with other staff stood down or taking pay cuts and the NRL's $4million so far funding to each club should be enough to see them through. Its if players want their money that clubs are going to be in real strife. Will also depend to some degree on how the sponsors react and the members. Given they have paid up front, if they demand their money back then clubs may not have it to give them.

 

[Cactus]

Even in these dire times the clubs self-interests are stopping the NRL doing what it needs to do! The game really needs to wrestle control away from clubs and the 2 state orgs and be a truly independent board doing whats best for RL.

Amen !

It might be the only silver lining in all of this.

 

[simmo05]

As long as they get the players salaries down then actual running costs could be minimal for the year with other staff stood down or taking pay cuts and the NRL's $4million so far funding to each club should be enough to see them through. Its if players want their money that clubs are going to be in real strife. Will also depend to some degree on how the sponsors react and the members. Given they have paid up front, if they demand their money back then clubs may not have it to give them.

If the entire NRL and all clubs shut down, what are they losing money on? Why do they need to keep people working? Surely there would only be rent on the different premises, I couldn't imagine the clubs or NRL would have had to borrow money

And tell the players they are simply not getting their money. They can't go on strike, they can't quit and give up footy forever. They will be back next year cap in hand just like the rest of us

 

[mongoose]

So if the broadcasters don't have to pay the NRL due to no games being played, why do the clubs still have to pay the players?

 

[mongoose]

LOLZ at the posters saying "My club will be ok because we are strong on**insert cherry picked metric**__________".

With Leagues clubs closed and TV funds at a standstill the only metric that matters is CASH IN THE BANK. Even asset rich clubs are in jeopardy because how can you liquidate an asset in this economy?

It's true that if we see a short term resumption of play most will get through it but with a long enough shutdown clubs will go to the wall. And if that shutdown is long enough no one is completely safe- doesn't matter how much cash you have. Manly, the Titans, the Tigers, The Warriors and the Dragons are in immediate strife (unless we hear of guarantees from their owners). Penrith, Parra, The Sharks, Cows next to go. If all or most of these go what becomes of the game for the remainder of clubs? Heres hoping we get on the field soon and no one falls over.

The NRL will cherry pick metrics to decide which clubs its willing to save over others and sorry to say but The Sharks are way down on the list. The clubs with shiny new stadiums (Eels, Cowboys) will be high on the list.

 

[Wily Ole Dog]

The NRL will cherry pick metrics to decide which clubs its willing to save over others and sorry to say but The Sharks are way down on the list. The clubs with shiny new stadiums (Eels, Cowboys) will be high on the list.

Look, if you were starting a comp today, there’s no way you would have the Sharks in the comp but the fact is they’re here and i believe better off than many clubs

The simplistic comments about viability of teams by the media is way off the mark as far as I’m concerned

 

[taste2taste]

If the entire NRL and all clubs shut down, what are they losing money on? Why do they need to keep people working? Surely there would only be rent on the different premises, I couldn't imagine the clubs or NRL would have had to borrow money

And tell the players they are simply not getting their money. They can't go on strike, they can't quit and give up footy forever. They will be back next year cap in hand just like the rest of us

Yeah, I've got the same questions.

What costs do clubs have if there are no games ?

 

[Hello, I'm The Doctor]

Now keep in mind we closed our leagues club in December 2019 with no plan to open until late 2021 early 2022.

All the clubs will survive, all the people who used to work thier will suffer. When the clubs can open again, they will starting hiring the staff required.

Even if Penn Sells his licence, Manly will endure.

I have concerns for NZ, nothing to do with money, pure politics and control. Maybe replaced by Brisbane 2. Hope to be wrong.

Is this for redevelopment?

I would guess construction will be delayed by the upcoming lockdown and they might struggle for supplies with a lot of international markets closed as well.

Reopening in 2022 is probably off the table and costs might blow out.

 

[Perth Red]

Sydney-based NRL clubs lost about $12 million between them in their last available annual reports.
As the frightening reality of the NRL’s coronavirus crisis sets in, The Sydney Morning Herald has analysed the latest financial records of all nine Sydney clubs lodged with the corporate regulator.
Only the Dragons refused to reveal their bottom line for the last financial year, citing confidentiality. The Herald has been told the joint-venture club turned a small profit in 2019. Between the other eight Sydney NRL organisations, the total losses of the actual football clubs totalled $11.93m.

The analysis reveals the dire situation clubs are in with their main source of revenue – the NRL’s broadcast deal – on hold until at least June. It also explains why clubs have started to tell staff to either take leave or move on, effective immediately.

Sydney clubs typically work in one of two models. The first is the one followed by the Bulldogs, Eels, Panthers, Sharks and Wests Tigers, who are heavily backed by their respective leagues clubs. Because they are able to secure healthy grants from those clubs, they do not desperately need to turn a profit every year.

Between them, those five clubs registered $11.37 million in combined losses in the 2019 financial year. The Eels (-$5.25m), Panthers (-$1.14m) and Sharks (-$5.45m) were the hardest hit on the balance sheet.

While they will still have the backing of their asset-rich leagues clubs, the profits they generate will undoubtedly take a serious turn for the worse if the government's closure of all pubs and clubs remains for the foreseeable future.
That will leave the football clubs little choice but to cut staff and turn their business models around entirely to drastically reduce their expenses.

The other model of running an NRL club is followed by the Rabbitohs, Roosters and Sea Eagles, which are backed by wealthy individuals.

But while the Rabbitohs ($1.22m profit) and Roosters ($8863 profit) have plenty of money in the bank - particularly the premiers - the Penn family were forced to chip in just under $2m to keep the Sea Eagles running in the 2018 financial year.

The arch-rival Roosters and Rabbitohs will survive due to their cash reserves and wealthy owners, but Manly only have one of those to fall back on.

Whether they survive will all but certainly depend on whether the Penns - who have tipped in about $1 million per year since they took over the club to keep it afloat - see the value in propping up the Sea Eagles during what could be their darkest hour.
Manly's 2018 financial accounts revealed the club's dire overall position, which was summarised as ‘‘the company has a deficiency of funds whereby its liabilities exceed its assets by $12.48m’’. It has yet to lodge its 2019 figures.

The Sharks will also have a battle to keep their heads above water given their precarious trading position. The leagues club, which is shut for the next two years for redevelopment as the group takes over Kareela Golf Club, reported $16 million in cash reserves after the sale of land around its property, funds which will be needed to survive the coronavirus pandemic.
https://www.smh.com.au/sport/nrl/nr...Social&utm_source=Facebook#Echobox=1585078760

 

[Perth Red]

Bulldogs
2019 result: $446,322 loss

Analysis: The Bulldogs' football operations stemmed the bleeding slightly in 2019, but still racked up a near half-a-million dollar loss. Of more concern was the huge downturn the powerful Canterbury League Club suffered, falling from a $5 million profit in 2018 to register a $4.47 million loss just 12 months later. The football club's overall financial position is still bleak - it's $2.37 million in deficit - a figure offset by the asset-rich leagues club which reported it had $175 million in members' funds, aided by a $200 million-plus property portfolio.

Dragons
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2019 result: N/A

Analysis: St George Illawarra's complex ownership structure - the company is half-owned privately by Bruce Gordon's WIN Corporation as well as the St George District Rugby League Football Club - makes it difficult to ascertain a full financial picture. The club claiming these figures are confidential didn't help, either. St George Leagues Club traded strongly with a $3.62 million profit in 2019, but a move to drastically reduce its grant to the joint venture was noted. It left the Dragons only $500,000 last year, down from $1.7 million in 2018. The Gordon family's television empire has taken a hit in recent years and much will depend on how far WIN wants to reach into the coffers to keep the Dragons financially viable.

Eels
2019 result: $5.25 million loss

Analysis: The football club simply wouldn't have survived in recent years without its adjacent leagues club pouring in millions to keep it afloat. Again, the football club recorded a multimillion-dollar loss in 2019 despite generating almost $3 million in extra gate receipts from the move to Bankwest Stadium. The overall deficit was even steeper than 2018 ($3.99 million). Financial records show the football club has an $84 million unsecured, non-interest bearing loan with Parramatta Leagues Club, which remains profitable. It chalked up a $2.27 million profit in 2019 and still wields significant financial clout, with $7 million in cash or cash equivalents and $77 million in property and equipment assets. Last year the leagues club listed $10 million alone in football-related expenses, but could be forced to reassess its commitment with the imminent trading downturn.


Panthers
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2019 result: $1.14m loss

Analysis: Penrith's football club shelled another seven figures in 2019, but make no apologies about running the business as a not-for-profit. It was at least a drastic improvement on their 2018 effort ($4.85m loss). Like the Bulldogs and Eels, Penrith's football business is funded by the rivers of gold from its licensed clubs, including $64 million from gaming alone. The Panthers Group almost broke even last term with a $284,000 loss, a steep improvement nevertheless on a $5.24 million deficit in 2018. It has just taken out a $64 million loan to complement $24 million in federal and state government grants for its new western Sydney conference centre, but is still one of the most asset-rich entities in the game. It lists the value of their property, plant and equipment at an eye-watering $208 million, but is already fretting whether it will be able to reopen all its doors after the coronavirus pandemic passes.

Rabbitohs
2019 result: $1.22m profit

Analysis: The South Sydney District Rugby League Football Club - which is 75 per cent owned by Russell Crowe and James Packer - has been on firm financial footing ever since the Hollywood actor and business mogul waived a $7 million loan in 2016. The club has about $4 million in cash reserves available and an additional $4 million set aside for a new high-performance centre. The personal wealth of Crowe and Packer will also be hurt by the COVID-19 pandemic, but the Rabbitohs appear one of the best-placed Sydney clubs to ride out the crisis.

Roosters
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2019 result: $8863 profit

Analysis: Despite basking in the glow of a premiership year, the Roosters' football operation barely washed its face last season and recorded a meagre profit despite registering almost $30 million in revenue. Its overall financial position, though, is just shy of $1 million in deficit. Its leagues club has been astutely run and signed for a $2.76 million profit before tax. The numbers get better though with more than $13 million in cash at hand and a sprawling property portfolio leaving the club with $129 million in reserve. But it hasn't stopped the squeeze on football spending, the annual grant was slashed though to $2.1 million from $3.28 million the year prior. Deep-pocketed chairman Nick Politis' personal fortune has taken a hit, but the club should be well placed to ride out the coronavirus storm.

Sea Eagles
2018 result: $1.79 million loss

Analysis: The Sea Eagles are one of the few clubs yet to register their 2019 financial accounts, but 2018 makes for uncomfortable reading. The club stemmed the bleeding slightly in 2018 to lose just under $2 million, down from $3.36 million the previous year. It has little in the way of cash or property assets and reported "the company has a deficiency of funds whereby its liabilities exceed its assets by $12.48 million". Its 2018 records also state it owes the NRL $2.4 million. The Penn family is believed to have forked out about $1 million per year on average to keep the club operating and it will need a huge commitment from its private owners - or a white knight - to survive the financial fallout.

Sharks
2019 result: $5.45 million loss

Analysis: Long considered one of the NRL's financial strugglers, Cronulla's football club has been beset with money woes for years. It racked up almost $6 million in losses in 2019 and faces an overall $7.71 million black hole. Without the ongoing support of its leagues club entity it wouldn't exist and also had to deal with the NRL's salary cap fine last year. The Cronulla-Sutherland Leagues Club finished the last financial term with a $3.19 million operating deficit itself, but can boast $16 million in cash reserves and $30 million in total equity after selling off more property around its complex. After the reporting term it also secured another $12 million for selling airspace rights adjacent to the leagues club, which is closed for two years for redevelopment. While it may have cash reserves now, the group is asset poor compared to other NRL clubs and their backers, and will trade out of Kareela Golf Club after an amalgamation was finalised late last year. While it has money in the bank it is still a concerning time for the Sharks and their supporters.

Wests Tigers
2019 result (Wests Ashfield): $912,000 profit

Analysis: The Tigers' financial landscape is best analysed through its majority shareholder Wests Ashfield Leagues Club, which provided a $950,000 grant to the football club last year. Wests Ashfield members passed resolutions last year to amalgamate with Balmain Leagues Club and subsequently wiped Balmain's $2.5 million debt to the NRL. It also paid off the $1.8 million the Tigers themselves owed to head office. Wests Ashfield still retains a decent financial base with $3.5 million in cash assets as part of $47 million equity.

https://www.smh.com.au/sport/nrl/nr...Social&utm_source=Facebook#Echobox=1585078760