NRL Clubs Face Financial Challenges

[imported_Bigbopper]

According to the Weekend Australian, in an article which looked at the financial state of NRL and AFL clubs, there are a lot of teams that will struggle over the next few years.
In 2000, nine NRL clubs posted large financial losses ranging from $724,000 (Penrith) to $4,500,000 (NQ). Canberra and the Storm broke even only because News Ltd provided additional funding ($1,750,000 to Canberra and $3,000,000 to the Storm). The Roosters and the Eels made small profits but only because of $4,000,000 plus grants from their Leagues Clubs. The Broncos appear to be the only club capable of standing alone without Leagues club support. The Bulldogs losses would have been $5,690,000 without Leagues club help.
In contrast only five AFL clubs ran at a loss and only two clubs (Brisbane and Fremantle) had losses two years in a row. The AFL is now coming in with massive additional funding for its clubs.
While I acknowledge that things are still settling down from the Super League war salaries and things will improve when everyone gets under the salary cap, this is not a good trend. How could NQ lose $4,500,000 or the Storm drop $3,000,000 on its operations?
How do we improve club income?

 

[Willow]

BigBopper, that article didn't have any Dragons figures by any chance?

 

[imported_Rasputin]

Willow, nothing on the dragons but the figures they give are not quite right, they combine both the football club & leagues club outlays in regard to community spending, see
http://www.theaustralian.news.com.au/common/story_page/0,5744,2506860%255E2702,00.html

 

[imported_Bigbopper]

It said St George-Illawarra lost $800,000 on the year after Leagues club grants of $3,500,000. I suppose that will come done as they get under the salary cap.
Still they obviously need a lot of Leagues club money just to stay afloat.
Cheers
Bigbopper

 

[imported_Rasputin]

Bigbopper
sorry, must be more on that story in the printed version as it didn't have St George in the lweb version....

 

[imported_Rasputin]

BTW, the Broncos are no more profitable than the Dogs, Panthers, Eels or Roosters who actually own their leagues clubs,it is only how the accounts are consolidatedfor taxation purposes.To get a true operating picture for these clubs you have to roll up the leagues clubs accounts into the football clubs accounts and then you will see an entirely different perspective.

 

[Willow]

Thanks Rasputin and BigBopper.
I always have problems with figures like this.
I've been a skeptic about $figures ever since I saw an end of year report from the St George Leagues Club in the early 70s which showed 'glass breakage' to be one of the club's major expenses for the year. I mean, people were really clumsy with their schooner glasses in that place, if you know what I mean.
For some time, there has been a culture where clubs think it's acceptable to run the football team at a loss.
I suppose it allright... at least until the first cheque bounces.
Apart from doing a fair dinkum national, regional and global promotion of this game (which costs money but I would see it as an investment), I can't see any way out of this quagmire.
It's up to whoever is really running the game and sadly,that seems to be a large bunch of faceless shareholders.

 

This message has been deleted by the author.

 

[imported_Rasputin]

Willow,
The football clubs are non-profit sporting organisations.They can not make a profit or they will lose their tax status. What they do is keep the money in the leagues club and only draw up what they require to pay debts, it can be confusing unless you look at the consolidatedleagues & football club accounts.

Leagues club grants are no more than a technical way of moving the moneyfrom the leagues club to the parent football club, just calling up what they need. At least in the case of those football clubs which own their leagues clubs, not all of them do.

 

[Willow]

Yeah I know rasputin but the game has changed a bit since they started callingsome clubs franchises.
Give me a non-profit member based organisation any day of the week... glass breakage and all!

 

[imported_Rasputin]

yeah, well that's the problem with the sharks et al and the new merger clubs,new age non community based franchises,no leagues clubs and relying on the devil for funding

. Always a price to be paid.

 

[imported_Bigbopper]

I guess one problem these figures highlight is that clubs like the Roosters actually lose large amounts on their football operations and these are covered by poker machine profits. Without such income NQ lost $4,500,000 - that canno tgo on indefinitely.
The Roosters, Eels, Saints, etc., are fine as long as the Leagues club money holds up. It would look pretty ugly if that income stream were cut off.
In general terms the AFL clubs are much more profitable.
Cheers
Bigbopper

 

[Willow]

So are their gate figures.
Thats one thing which hasn't changed.
News Ltd can go on and on about the modern game having profit in sponsorship and it's exposure on the box but at the end of the day, if the gate takings ain't there, the clubs will struggle.
Rugby League should 'go on the road.'

 

[imported_Rasputin]

Bigbopper,
All football clubs lose on football operations and alwayshave, that's why they are classified non-profit sporting organisations.All this talk about grants from leagues clubs is horseshit. The football clubs built the leagues clubs to replace bloody chook raffles so they will always draw funding from them as that was the solepurpose of building them, don't look at them as seperate identities because they are not. The leagues clubs are not propping up football clubs, they are simply fulfilling the role their owners built them for.

The new fangled franchises are a different matterand don't haveleagues clubs but thats the wayNews wanted it for reasons of their own.

 

[imported_Bigbopper]

Rasputin,
It's a fair point you make. But a lot of AFL clubs are making money on their football operations.
Cheers
Bigbopper
?

 

[Willow]

gate takings...
AFL's strength.

Does anyone know the name of that (South American?) Soccer club who get about 100,000 to about every home match?
They have a club with supporter membership fees as their main source of income. They do not have any sponsors name on their players' shirts.
I know it's not totally relevant but it always intrigued me that a sporting club could be so independent of the system due to fan power.

 

[imported_Rasputin]

No sporting body can declare a profit, afterall they are non-profit organisations. Clubs which have acorporate structure which havebeen set up as purely a profit making company, similar to the broncos, are not sporting clubs and therefore have to pay tax before distribution of profits.AFL clubs do not pay tax therefore do not have profit. Some generate surpluses via achild corporate company which deals in merchandising, sponsorships etc. These are in essence no different from leagues clubs.

Though you are quite correct that some AFL clubs do get far more bums on seats and therefore require less to run their football operations. As willow said, they are more reliant on gate takings than some NRL clubs.

Clubs are strugglingdue to the inflated player salaries andto their credit the NRL is doing something about it. The next 3 years is crucial, by thensalaries will be down to a level of sustainability.That is the game will be able to afford the salaries.

 

[BlueAnGold]

but the lcaccounts dont tell yawhat the footie club is spending it on.its all lumped together and called a grant. why dont parraincludethe footie clubs breakdown