Rugby league boss Peter V’landys has set his sights on expanding to England and turning the league into a major hotel operator – and handed his board a big pay rise – after the sport reported record revenue driven by broadcast and wagering fees.
Talking down rivals, including rugby union and soccer, and declaring his chief executive to be one of the best in any business, Mr V’landys on Wednesday laid out an audacious vision to the NRL’s 17 clubs at the league’s annual meeting.
The NRL reported revenue of $701 million, an increase of 18 per cent, and an operating surplus of $58.2 million, a 7 per cent fall, for the year to October 31. The revenue rise was driven by broadcast partners Foxtel and Nine Entertainment, the publisher of
The Australian Financial Review, product fees from bookmakers and a $20 million uptick from sponsorship, game receipts and investment income.
Mr V’landys and his fellow seven commissioners – including high-profile investor Gary Weiss, former Queensland premier Peter Beattie and Sydney silk Alan Sullivan, KC – were handed a $400,000 pay increase, bringing the total pool to $1.2 million.
Mr V’landys declared CEO Andrew Abdo “one of the best chief executives in any industry” as he laid out his plan to grow the game, including a proposal to grant tax-free status to Australians involved in bringing Papua New Guinea into the NRL fold.
“To be making three consecutive profits ... is an extraordinary result, especially if you compare us to other sports,” Mr V’landys said. “Excluding the AFL, who are performing strongly, you’ve got rugby union [with] an $80 million loan that it’s relying on to stay solvent, rugby union clubs going broke, A-League clubs going broke.”
The NRL’s asset base has also increased, the accounts showed, up 29 per cent to $260.1 million. The league has already started buying hotels and currently owns three: The Quest Hotel Woolooware Bay in Sydney, the Mercure Sunshine Coast and Gambaro Hotel in Brisbane. It plans to expand the portfolio.
“The surplus is for reinvestment,” Mr Abdo said. “That new revenue stream will not only result in more funds available for distribution – more to clubs, more to players, more to grassroots football – it will future-proof the game against an impact on other revenue.”
Mr Abdo said buying hotels was about cost and revenue synergies. Mr V’landys said he expected the hotels to generate a 10 per cent annual return on investment.
“So far, all three [hotels] are bought in vicinity to where we play grassroots or elite rugby. The plan is to grow quite significantly using rugby league IP and our major events, which we place in these markets to drive the performance of these assets,” he said.
The other element of the growth plan is building the NRL’s offshore fan base.
The
most ambitious part of the strategy – two matches in Las Vegas at the same venue the Super Bowl was played last week – will be played on March 2.
The intent is to capture more of the hundreds of thousands of Australians living in the United States to pay $US160 ($242) for the NRL’s subscription app, Watch NRL. It now has 3000 US users.
“Even if we just got a small percentage of them, that’s $25 million extra revenue,” Mr V’landys said. “We’re aiming for much higher than that, naturally.”
The matches between Manly Warringah Sea Eagles and South Sydney Rabbitohs, and the Sydney Roosters and Brisbane Broncos, will be broadcast on Fox Sports 1, the Murdoch family-controlled Fox Corp’s main cable sports television network. Mr V’landys said he wanted to be on Fox Sports 1 every week, but no deal has been signed.
“If we can get 1 per cent of the market in America ... that’s 3 million subscribers,” he said. “It’s a big strategy, it’s a big risk. It could be a game changer.”
Another element is plans to secure an NRL team in PNG, among the largest of South Pacific nations, where rugby codes are hugely popular.
Mr V’landys signalled he also wants to penetrate the English market. “We already have Super League and there’s hardly a [Watch NRL] subscription sold in England,” he said. “So we’re going to attack that market as well.”
Britain has its own national competition in rugby league, though it is generally considered the third most popular version of football after rugby union and the dominant soccer code.
The NRL chairman has set his sights on expanding to England and turning the league into a major hotel operator – and handed his board a big pay rise
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