Rabbitohs show why you should try this at home
26 Apri2014
by
Michael Chammas Rugby league reporter
In the first of a two-part series, Michael Chammas examines why Sydney's club want to move games from their spiritual home grounds.
The gamble South Sydney took almost a decade ago when they packed up and moved their games from their spiritual heartland to western Sydney has not only paid off, but paved the way for rugby league to enter into a new era.
Clubs are aiming higher, dreaming bigger and breaking records that only a few seasons ago never seemed imaginable.
What the Rabbitohs have done, and the Bulldogs to a certain extent, have forced those Sydney clubs still hanging on to the roots of yesteryear to venture into uncharted territory.
Fairfax Media has spoken to all Sydney clubs to reveal the expenditure and revenue comparisons between suburban grounds and the larger venues. Suburban grounds aren't dead - just have a look at the crowd that piled into Leichhardt in the pouring rain earlier this month. But, as Dragons chief executive Peter Doust put it, "we needed to change or we would be left behind".
In a few years time rugby league club bosses hope the crowds that piled into ANZ Stadium on Good Friday and Easter Monday would no longer be considered one-offs but the norm.
Could you imagine if the Eels had played their game against the Tigers at Pirtek Stadium? There would be 30,000 fans disenfranchised. Rugby league cannot afford to be turning fans away. And no matter how wonderful and atmospheric Leichhardt and Kogarah are, the reality is that the club's visions are outgrowing these iconic venues.
There was an outcry from Tigers fans in Campbelltown after attracting just over 6000 for the game against the Cowboys a fortnight ago. They want the club to play against the higher-profile teams, but the reality is the future of suburban grounds will involve out-of-town teams.
"I think there's always a role to play for suburban grounds," Tigers chief executive Grant Mayer said. "The complex part of it is making a decision on right game, right venue, right time, can only happen when the draw is released. No suburban ground could have hosted Easter Monday with the Eels and Wests Tigers. That speaks volumes of what will happen in the future.
"It just may mean that in the main, suburban venues will see out of town teams or the lower drawing Sydney teams on a regular basis. We've tried over the last two years to share the split across Campbelltown and Leichhardt."
Reciprocal membership rights are adding further value to membership packages and increasing crowd attendances.
When the Dragons play the Bulldogs at ANZ Stadium, around 36,000 members combined have access to the match, but if that was at WIN Jubilee Oval almost half of those would be stranded outside of the gates.
The Tigers, Eels and Dragons are offered guarantees in excess of $125,000 to play at ANZ Stadium, with the stadium hopeful of helping build crowd attendances so that eventually they will be able to sustain themselves and operate like the Rabbitohs and Bulldogs.
SOUTH SYDNEY RABBITOHS
ANZ Stadium
Capacity: 82,000
Expenditure
ANZ Stadium: Fee paid based on per ticket sold.
Revenue
Merchandise: $70,000 average per game. (When they left the Sydney Football Stadium, the Rabbitohs didn't have the rights to merchandise sales on game day. They now are the most profitable sporting club in Australia in merchandise.)
Corporates: $120,000 per game (Up to 1000 people with an average of 600)
Tickets: $200,000 per game (In 2005, their final year at Allianz Stadium, the Rabbitohs' gate share net profit for the entire season was $36,000)
Signage: $65,000 per game (South Sydney have $7.5 million worth of sponsorship for 2014).
Profit: $440,000
In South Sydney's final year at the Sydney Football Stadium back in 2005, the net profit for ticket sales was $36,000 for the entire season. Chief executive Shane Richardson then took a massive gamble and moved games to ANZ Stadium for a guarantee in excess of $100,000 per game.
However crowds have grown since moving to Olympic Park and last year the club ceased their guarantee arrangement with ANZ for a new deal that entitles the club to 100 per cent of revenue. The Rabbitohs are now the benchmark for Sydney clubs. In 2013 the Rabbitohs net profit for ticket sales was $2 million. They have also increased their membership revenue from $365,000 in 2005 to a projected $4.5 million (32,000 members) in 2014. The club turned over $8.5 million in 2005 compared to an estimated $26 million they will turn over this year. By moving to ANZ Stadium, South Sydney have enjoyed a substantial growth in membership in western Sydney. They now have 58 per cent of their members living in the inner west and greater western Sydney. They also take games to Cairns, Perth and Gosford, with 1500 members in Western Australia, 3000 members in Queensland and 1500 members (more than any other NRL club) on the Central Coast. They are about to release a plan to increase turnover to $34 million and membership to 50,000 by 2018. It was reported in 2004 that the Rabbitohs needed a crowd of 9000 at Allianz Stadium just to break even.
SYDNEY ROOSTERS
Allianz Stadium
Capacity: 45,500
Operational costs: The Roosters are a tenant of Allianz Stadium and have an undisclosed deal with the SCG Trust which includes match day, training and administration building use rolled into one. The club has to play a minimum of 10 games at the venue each season until the end of 2019.
Ticket sales and average crowd: The Roosters get 100 per cent of the gate share. Every second season the club experiences greater ticket sales because they host the ANZAC Day game against the Dragons and the season opener against South Sydney in the same year. This year they will struggle to maintain last year's average crowd of almost 20,000 (fourth in NRL). The Roosters averaged around 14,000 in 2012.
Corporate: The Roosters can host up to 1000 people. They also have to accommodate for SCG Trust members.
Merchandise: The Roosters don't have any game day merchandise rights as part of their deal with Allianz Stadium. They get a small percentage of the gross.
Membership: 15,000 with a projected total of 17,500 by the end of the season. It has increased 50 per cent since 2012 (10,000). If the Roosters reach their target, membership will bring in $2 million to the club.
Signage: The Roosters only have access to LED signage that they can sell or give to sponsors. The rest of the stadium signage belongs to the Trust.
The Roosters have been at Allianz Stadium since it opened in 1988. They train and play at the precinct, while their administration are all in the same building adjacent to Allianz Stadium. The club prides itself on the strong culture that comes with having all the club's staff and players in the same facility, which is a luxury most clubs don't have. The club concedes the precinct is in dire need of an upgrade on both the infrastructure and technology fronts. There are only 2500 car spots, and while there is public transport, it isn't as convenient as what the Trust have planned. There is a light rail proposal to be linked to the precinct for 2019, while a pedestrian bridge over Anzac Parade expected to be ready in time for the cricket World Cup in January will make access from Central station a lot easier. Outside of the Roosters, St George Illawarra are the only other team to sign a deal with the Trust, playing one game at Allianz Stadium and the Sydney Cricket Ground this year. The Roosters used to take a home game away from Allianz Stadium for financial reasons. They still have the option of moving two games per year, however the Roosters board has put a red pen through the initiative given they lost all 11 of their relocated games, the last a 50-12 thrashing at the hands of the Cowboys in 2012. The Roosters are more than happy with their arrangement with Allianz Stadium, but concede technological advances needed to be made to keep up with consumer demand. "It's our spiritual and geographical home with our training, administration and game day all based out of the precinct," a Roosters official said. "As the only full-time rugby league tenant, we want to continually work with the Trust to maximise crowds and enhance experience for our members and supporters. We want to see this stadium have the best technological facilities. There's also the added advantage of being next door to the NRL offices, while also working with the Sydney Swans, Waratahs and Sydney FC."
CRONULLA SHARKS
Remondis Stadium
Capacity: 22,000
Expenditure
Operational costs: $70,000 (Ticketing, security, police, big screen)
Maintenance/utilities: $48,000 (The Sharks own their ground, so they are responsible for the maintenance of the stadium)
Total: $118,000
Revenue
Merchandise: $17,000 per game
Corporates: $145,000 per game
Ticket sales: $93,000 per game
Signage: $40,000 per game
Catering: $10,000 per game
Total: $305,000 per game
The Sharks are the only club in Sydney to own their own ground. Their game day expenditure is far greater than any other team given they have to pay for the maintenance and upkeep of the ground. The Sharks don't have a major sponsor but still managed average crowds in excess of 13,000 the past two seasons. They have started 2014 with a home crowd average of 11,903 for their first four games.
MANLY SEA EAGLES
Brookvale Oval
Capacity: 23,000
Fairfax Media contacted the Sea Eagles but they declined to provide specific confidential details of their game day expenditure and revenue at Brookvale Oval. The club is in the process of a feasibility project in partnership with the NRL in relation to a proposal to build a new grandstand that will cover part of the eastern hill and will increase undercover seating capacity. There are only approximately 3000 undercover seats which includes all corporates at Brookvale Oval. The vision is to increase membership with a new grandstand and to potentially turn the venue into a multi-purpose facility that can be used for a range of sports and community events. In the past few years, the club has grown its membership from 7000 to almost 13,000 - this year breaking the club's record. The club is now restricted on the number of seated memberships it can sell, as membership is capped at approximately 13,000 for Brookvale Oval. The Sea Eagles have taken two games to the Central Coast this year which provided in excess of $350,000 in guarantees. The Sea Eagles fans haven't traditionally embraced home matches at Allianz Stadium, however infrastructure restrictions, including no train line, have played a significant part in this.
ST GEORGE ILLAWARRA DRAGONS
WIN Stadium and Jubilee Oval
Expenditure
Operational costs: The Dragons have one of the highest venue cost structures in the NRL. It costs them more to use Kogarah than Wollongong, however their deal with WIN Stadium escalates by use of the precinct as their training base and football offices. The Dragons pay over $140,000 in rent and costs to Kogarah Council each year and individual game day costs are greater than most venues because of the inadequate infrastructure.
Revenue
Ticket sales: Kogarah sold out has a negative contribution and a sold out WIN Stadium has a minimal positive contribution.
Merchandise: Average of $35,000 at Kogarah and $25,000 at WIN Stadium in Wollongong.
Corporate: The capacity at Kogarah is 1564 while WIN Stadium has 1099. The club has five categories of corporate tickets ranging from $80 per person to $250 per person.
Signage: The Dragons own all signage inventory at Jubilee Oval and split the signage with the WIN Stadium Trust in Wollongong.
Membership: For those who have ticketed memberships at the traditional surburban home venues the split is 60 per cent in Kogarah and 40 per cent in Wollongong. The Dragons have 18,050 ticketed and non-ticketed members to date that bring in more than $2 million to the club.
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ANZ Stadium, Allianz Stadium and Sydney Cricket Ground
Expenditure
Operational costs: Nil
Revenue
Stadiums: The Dragons get an undisclosed guarantee for their two games at ANZ Stadium in the short-term, moving to a ticket share over time. At Allianz Stadium, the Dragons have options for up front guarantees and/or ticket share. The Right Game Right Venue strategy will deliver more than $1 million each year due to an increase in revenue and decrease in costs. This strategy also includes opportunities for growth in all revenue streams, from moving these four games away from the suburban venues, with each game estimated to be worth $250,000 more than a game at Kogarah or Wollongong.
Ticket Sales: Anzac Day is worth $400,000 to the Dragons in ticket sales. They get nothing from ANZ Stadium for ticket sales because of their guarantees in the short term. The club shares the gate with South Sydney in the Heritage Round clash at the SCG and the return event at ANZ Stadium. The possibility of an extension of these principles exists for the future.
Merchandise: The Dragons have just signed a new deal with ISC Sports, their largest apparel partnership to date that is expected to increase merchandise sales, with a focus on street wear.
Signage: The signage arrangements at ANZ Stadium are similar to WIN Stadium, they are joint ventured with the venue.
The Dragons and NRL Right Game Right Venue strategy will mean that the club has five home grounds for the next four years just over 100km apart with the objective of developing more marquee events at the bigger venues, accessing new markets as well as maintaining balance with their traditional venues.
They play four games at Kogarah, four games at Wollongong, two games at ANZ Stadium and one game at both Allianz Stadium and the Sydney Cricket Ground. The financial return underpinning this strategy will enable the club to be sustained over the longer term and for them to be able to compete at the top end of the game, continue to invest in pathway development and community activities. The club has averaged a crowd of 14,164 at Kogarah since the start of the joint venture and 13,055 at Wollongong. They've also played a number of games at the larger venues, with an average of 19,981 at ANZ Stadium and 16,157 at Allianz Stadium.
At the suburban grounds, not every fan is entitled to a seat. At Kogarah there are 11,824 seats with 5670 under cover. At Wollongong there 14,591 seats with 9751 under cover.
The club had plans in place to build covered seating at the southern and northern end of Jubilee Oval, however the government funding policy means that money will be invested into keeping the larger stadiums up to date.
The Dragons are the fourth most popular team in western Sydney, a new market for the club, and while the Dragons have grown their membership and partnership numbers in the region, they've also been unable to retain some disgruntled fans who haven't renewed their membership because of the decision to play less games at the suburban grounds. This was not unexpected but the club believes that their supporters want to see their team participate in the big marquee events and remain competitive with the biggest clubs in the NRL.
More than 1500 fans recently signed a petition to play more games at Kogarah.
In tomorrow's Sun-Herald - how the western Sydney clubs are dealing with big decisions involving home grounds.
