superleague

[bender]

bender wrote:
Illawarra were struggling but would have gotten stronger and probably survived. St George were also struggling and had already explored merger and relocation options. I think both sides would have existed but I think the merger is a better option and they are now stronger than they would have been and together they have a brighter future. I do think that this was the best of all the mergers.

Illawarra would definately still be around if SL never occurred.

Our on field performances were strong. From 1991 to 94 we finished in the top half of the 16 team comp and gave the premiership a real shake in 92, being ripped off in the Major Final 4-0 with 3 dissallowed tries. We would of been a huge chance of beating the Broncos in the GF (we'd beaten them in the Pre-season cup final as well as at Lang Park in the competition proper).

In 93 we were awarded the highest possible salary cap.

When SL hit, we were in the middle of a major financial plan from 1992-1996 which was meant to see us set for the future. That was ruined as the market blewout. Obviously no planning could of saved us from the destructive force of News Ltd. They took our coach and many good players (and our perfermances dropped off) and left us with a worrying future eventuating in a one sided JV, when we should of been stand alone club, continuing to build on that great platform (on and off the field) of the early 90s.

News ltd has blood on it's hands. It still shows no remorse.

Actually, you are probably right about them on the field, they did have a very good side that they built up and they are still one of the very few sides i have seen develop almost entirely from a good youth program and without the help of big name player signings. I did enjoy watching that. Still, I do think that in the next 10 to 15 years as the population down there expands, St George will eventually move fulltime to the Illawarra region and it will be with the blessing of the Dragons supporters, so i dont think that the franchise is as one sided as people think.

I accept what you say about your financial plan, but the fact is that once union went professional, the salary cap would always increase and you would have needed to be able to raise more than the maximum, under any circumstances. It is a shame, just think how easy and exciting finding money for expansion and promotion would be if each of the clubs only had a 1.5 million dollar salary cap for each of the last 10 years. Certainly, all the existing clubs would be pretty strong and in a position to build massive leagues clubs, invest hugely in junior funding etc. Things could be very very different.

 

[LeagueXIII]

Why couldn't Balmain and Wests or Illawarra and St.George survive? You can't say that because a team has a few bad years things won't turn around. After all weren't St.George and the Roosters going to merge at one stage? Now look where they are. Cronulla have always been in and out of financial trouble, yet no-one questions them standing alone.
What league lost after the SLW was the fabric and continuity of it's game, something that is invaluable, and now there is a feel that it is not "trendy" whilst AFL and union are.
We shouldn't be kicking out or moving our teams around but demanding professional management from the top to the clubs and strategies to bring the feel good factor back to our game and to support it's growth.

 

[Red Bear]

Why couldn't Balmain and Wests or Illawarra and St.George survive? You can't say that because a team has a few bad years things won't turn around. After all weren't St.George and the Roosters going to merge at one stage? Now look where they are. Cronulla have always been in and out of financial trouble, yet no-one questions them standing alone.

Of course Cronulla do have Uncle Rupert paying their way, why else do you think they went to Super League? They are the crack whores of Rugby League.

 

[DJ1]

Super League Pt1


A prelude to war


A rationalisation of Sydney teams in favour of a National competition was actually the NSWRL and ARL plan (see the Bradley report later).

Due to expansion of the competition the NSWRL was put into a situation where many clubs were not in a long term position to survive. The NSWRL solution was to attempt to kick them out of the competition when they could no longer meet a prescribed criteria. This occurred in the case of Newtown and was attempted twice with Western Suburbs who initiated court challenges to remain in the comp.

The NSWRL then altered it's charter to an invitation based system which would allow them to "fail" to invite a club and thereby exclude it from the competition.

In 1990 the heirarchy instituted a salary cap of between $800K to $1.5M but then standardised it across all clubs in 1991 at $1.6M.

In 1993 the RL reportedly signed a deal with Packer for the FTA (Free to air) rights to televise Rugby League. However tabled documentation during Federal Court proceedings state this was not signed until March '94. This deal was reportedly at $13M per year. The important aspect of this deal however was the clauses which basically handed over the PTV (Pay Television) rights to PBL for free (No PTV revenue shows up in NSWRL or ARL financial reports). Despite the fact that there was no PTV situation launched in Australia at the time, overseas experience had shown that once a PTV service became available in Australia, these rights would be worth a substantial amount of money to the game. At the time, Packers priority was to gain the FTA rights and the PTV clauses could have been rejected with no change to the final bargaining position if the RL employed competent negotiations. Another version contrary with all documents tabled in the Federal Court under oath, was that Packer had first option on PTV rights. The issue with this however is that first option on any rights is simply first bid. The ARL would still be able to go with a higher bidder of which there was one. The other issue is that if true it would mean that the ARL heirarchy committed perjury in the Federal court. In the aftermath of the war Quayle stated that all TV contracts at the time had the PTV clause included. At the time he made this quote he must have forgotten that if true, this would have given the ABC the PTV rights.

This free PTV component became the crux point of what later became a war.

A war of another kind was already brewing in Australia. Optus began competing with Telstra for the local telephony market. Both carriers developed comprehensive strategies involving the rollout of billions of dollars worth of cable capable of providing the end user with additional services apart from simply the standard home phone. These included Internet and Pay TV.

Suddenly, Packer was sitting on a gold mine. Whilst the RL game would receive no additional benefit on their PTV rights, Packer was in a position to onsell the rights he received for a substantial profit. He later did this for a 5% stake in Optusvision. (at late '90s valuations of PTV companies this equated to a nice $150M freebee.)

The Telco war heated up with the race for exclusive PTV content. In most other countries, the PTV carrier does not enter into expensive exclusive content deals but all carriers can provide all channels. The Telstra/Optus war took us in a different direction. Optus through Optusvision and Telstra through Foxtel wanted exclusive programming rights to movie channels and Optus ended up with the Movie Network channels whilst Foxtel got the Showtime/Encore catalog. The race for sport was now on the agenda.

News Ltd (then 50% owner of Foxtel) approached the "now" ARL regarding the PTV rights to rugby league. Many club executives were already in a situation where they thought the PTV rights should be re-negotiated as they felt the heirarchy were duped into signing them away for nothing. All clubs and rugby league as a whole could have definitely used the additional funds.

News approached Packer with the view to gain access to the rights for distribution on a new PTV channel but were refused as Packer in assigning the exclusive rights to Optusvision meant that no other PTV carriers (Foxtel, Galaxy, CETV and ECT) would be able to televise Rugby League. News tabled an offer of $500M for 5 years for the PTV rights to the ARL. This offer was for the PTV rights only and did not include any percentage stake in the game or level of control. News also offerred to pay all of the ARLs legal expenses relating to a challenge of the existing contract on the grounds of how it was negotiated and at the fairness of value. Even if it meant that the court decided that it would cost e.g.$100M to break the contract, News would cover this cost.

A deal of this size, the largest in history would have been a fantastic boost for the game. At this point the game was already beginning to lose players to overseas due to their ability to pay more. Due to the ARLs constraints of a $1.8M salary cap, the players were also in a position to lose out dramatically as other codes received massive injections from the sale of PTV rights, whilst the ARL was stuck with badly negotiated deals of $13M a year for both FTA and PTV.
Continuation from earlier post (A prelude to war)

Overseas, the English competition moved ahead in agreeing in principle to terms with News Ltd in their largest ever deal which injected millions into the game. A deal they later signed.

Many club CEOs believed that the ARL had done the wrong thing by the game in rejecting this huge offer.

The proposition of no rugby league product was not acceptable to Telstra who were in the process of a multi-billion dollar rollout of cable infrastructure. As 50% owners of Foxtel the decision was made that a rugby league product had to be included on Telstra'a cable.

 

[DJ1]

Super League Pt2

The Eve Of The War Pt1

1)The State of Play

The situation now existed within Rugby League in Australia where the PTV rights which the ARL had basically given away were signed away by Packer in a lucrative deal for exclusive access to Optusvision. This situation was simply not acceptable to Telstra and News Ltd who were in the process of spending billions on infrastructure and absolutely had to be able to deliver the Rugby League product to their customers. The Optusvision deal also excluded Galaxy, CETV (now Austar) and ECT (Later bought by Austar). Despite attempts to negotiate with the ARL and Packer directly, these rights were still not made available.

Whilst the game of Rugby League was enjoying it's most prosperous time ($21,027,344 in revenue 1994. Of this $8,992,000 was income from the combined TV contracts), unfortunately it was running at a loss. Even it's most successful season, 1994 saw the NSWRL post a loss of $722,878. The majority of clubs were also running in the red and were unable to survive without the leagues club grants.

Clearly any suggestions that the league was a successfully run business which did not need to change the way it operated are coming from someone with no idea of the facts.

Many clubs saw the PTV rights issue as a huge blunder by the governing body as the game could have definitely utilised the additional $100 million per year.

Another issue which loomed large with the clubs was the insistance on having to apply for inclusion to the competition each and every year. This provided no security as there was no long term committment from the governing body that your club would still be there in 10, 5 or even 2 years.

The clubs were also somewhat fearful of the hierarchy who at "The Premiership Policy Committee" meeting earlier on 9th April 1992 tabled a document called "A blueprint for the expansion of Rugby League". This document was followed up shortly afterwards in Aug '92 by a draft document sent to all clubs titled "Organization Review" by Dr G. Bradley of W.D Scott & Co commissioned by the governing body. This document is why the ARL became the governing body instead of the NSWRL. The recommendations in this report to the governing body and the clubs also reached the following conclusion,

" to reduce the number of clubs in Sydney, will be very hard for the League to implement given the long playing traditions of some of those clubs. In the long term, however, it is likely that Sydney is not going to be able to support eleven clubs as it does at present. Therefore in the long term this is the only viable solution. Sydney based clubs are going to have to move to new areas, merge or be relegated from the League. This is going to be a painful process.

In the long term I believe that the ARL should be looking to reduce the number of clubs in the National Competition to fourteen thus allowing clubs to play two complete rounds. This will mean, assuming that only four new clubs are admitted from areas outside Sydney, that there will be only five clubs based in Sydney."

This is the long term plan which the ARL were already working on prior to any notion of Super League.

On 2/5/94 John Quayle sent all clubs their letter of invitation to season 1995. This included a number of criteria for admission which included,

"attract a minimum average home attendance of 10,000 people"

(Of note, the following clubs failed this criteria for 1995, Balmain, Easts, Gold Coast, Illawarra, Parramatta, Penrith, Souths, St George and Wests)

The Broncos (A private company) when transferring a 20% share of their company to Northern Rivers Ltd had the new shareholder receive this from Mr Quayle,

"Under the terms of the League's Constitution, it is necessary that, without exception, all clubs which wish to participate in the League's Premiership competition, must apply each year for admission. No club has any automatic right to participate in any year's competition and the League has the unfettered right to reject any club's application for participation."

2)The Super League Concept

Whilst the ARL were already in the process of implementation of the recommendations concluded within "The Bradley Report". The PTV rights issue and security of admission to the competition festered amongst many clubs. The concept of a "Super League" began to get a mention in newspaper and magazine articles from 2/3/94 (most likely due to the existence of "The Bradley Report" combined with the widespread knowledge of the PTV rights issue).

In April '94, John Ribot prepared a concept document which proposed a "Super League" and sent it to the CEO of News Ltd Mr Cowley.

On 14/6/94, Ribot sent a more detailed plan for a Super League competition comprising 10 or 12 teams a slight modification on the ARLs "Bradley Report".

 

[DJ1]

Super League Pt3

The Eve Of The War Pt2

3)A News "owned" Superleague, (Super League Mk1)


A document entitled "Superleague", dated 12 August 1994, was prepared within News. The stated objective was to set up a company called Superleague Ltd, owned by News. Superleague Ltd would establish an elite national competition (including a New Zealand team), between 12 privately owned teams. News would own up to four of these teams. Superleague Ltd would also conduct an internationally televised World Club Series between clubs initially involving Australia, New Zealand and the United Kingdom.

News was to obtain a 15% management fee, the profit share allocated to the clubs owned by it and other benefits. Superleague Ltd was to devise revenue from sponsorship, free-to-air and pay television rights, gate takings and merchandising. The company was projected to make an operational profit of $5 million by 1997 and $12 million by 1999. (A far cry from the losses of the existing situation)

The competition was to consist of twelve clubs, of which four would be based in Sydney. New teams would be based in Perth, Adelaide and Melbourne. Each of these teams would initially be owned by News. An objective of the proposal was "to ensure that no other competition [could] exist in competition to Superleague". To achieve this, it was considered necessary to have at least the four Sydney teams (to maintain the game's largest base) and to ensure that all teams were privately owned.

The document set out a series of steps to implement the proposal. Step 1 was to approach the four "continuing teams" (Brisbane, Canberra, Newcastle and Auckland), with a view to securing a commitment for 7 years. Step 2 was to meet with representatives of the League in a "casual pleasant atmosphere" and to offer "concessions". The concessions included allowing ARL to conduct Tests and retain the profits from those matches. The League and ARL was also to be given a grant to promote the game. Step 3 was to meet at short notice with representatives of the 11 Sydney clubs and Illawarra. Each club was to be offered a share in a team. If there were three clubs in an area, each would be offered one-third of the ownership of the team. It was envisaged, for example, that the new Western Sydney club would be offered to Wests, Penrith and Parramatta. If only one of the offerees accepted, it would own 100% of the new club; if two accepted they would each own 50%. The proposal was that the old club would own half of its entitlement in the new club and the remaining 50% would be offered directly to members. The old club and non-members could sell their entitlements to a private owner. Step 4 was to announce that Super League was happening and to explain its structure. Step 5 was to deal with other clubs not included in the arrangements, such as the South Queensland Crushers.

The document noted that the co-operation of some clubs was required, while the co-operation of players needed by the new competition was essential. It was acknowledged that compensation might have to be offered to unwanted players and teams. It was also acknowledged that it would be difficult to use current names and logos, although this would be an issue for only three or four clubs, since it was better for the new or combined clubs to start with completely new identities.

On 17 October 1994, the board of the League resolved to hold a special board meeting to discuss several issues, including Super League and a "reduction in the number of Sydney teams".


An SMH article quoted Arthurson on 21 October 1994,

"The League has the right, as you well know, to deny admission to any team in the Winfield Cup"

Reports of a proposed breakaway competition continued.

On 6 November 1994 Arthurson rang Quayle from England and said words to the effect,

"I'll be home Tuesday your time. What I would like you to do for me John, is to ring every President, or if the President is not available to speak to the CEO of each club, and tell them that I am coming home, and that when I get home I want to speak with them personally about the News Limited developments, tell them I want to talk to them about entering into an agreement to play in the competition for 3 to 5 years."

(Now, they wanted to give all the clubs some longer term security!)

On the morning of 10 November 1994, a meeting was held at the offices of News between Messrs Arthurson and Quayle and Messrs Cowley and Lovett. A conversation to the following effect took place:

"Arthurson: There is continuing media speculation about the establishment of a Super League. There are suggestions that there will be a break away or rebel competition.

Cowley: The stories don't come from me.

Arthurson: ...it is common knowledge around the traps that a comprehensive report has been put together by News, with nobody knowing what the report's about. There's plenty of suspicions being harboured amongst the clubs as to your intentions.

Cowley: We do have a proposal to develop a Super League. We would like to see a competition of 12 teams. We'd like to see the number of Sydney teams reduced.

Cowley: My people have been working on the project for some time. That is a report on their findings. One of these days I will give it to you. You will probably not like some of the things you read in it.
I would like to take Rugby League to the rest of the world. If you come with us we will make the code a much stronger code.... I love the game, Ken, I want you to know that I'd never do anything to harm it.... What you fellows have done for the game has been terrific, but News can take the game the next step.

Quayle: What is going to happen if we are not interested?

Cowley: Super League is going to happen with you or without you people. It is entirely up to you.

We would be interested in exploring any way to improve the game with you and to promote it internationally. It is absolutely essential however for any discussions for it to be understood that the control of the game must stay in the hands of the accepted authority of the game, and that is the Australian Rugby League.

Cowley: We are only seeking a slice of the television cake.

 

[DJ1]

Super League Pt4

The Eve Of The War Pt3

4)The ARL run Superleague, (Super League Mk2)


Shortly before the meeting of 14 November 1994, Mr Arthurson had a telephone conversation with Mr Cowley. The conversation was to the following effect:


"Arthurson: While I am prepared to negotiate with you and conciliate, the one thing which I will never give ground on is the idea that in any game in which News Limited participates, the control of the game must rest with the Australian Rugby League.


Cowley: I appreciate that. If there is to be a Superleague it has to be under the control of the ARL. My people are preparing a proposal for you and I expect to be able to get back to you with that proposal in early February."


Meeting with all club executives regarding ARL / News Ltd discussions.

[Mr Arthurson outlined what had occurred at the meeting of 10 November 1994.]


My personal view is that [what was said by Mr Cowley on 10 November 1994] would be unacceptable as it would virtually mean that the Australian Rugby League would be relegated to something akin to the Junior League. Mr Cowley said he thought it would be a great opportunity for us to really develop and expand the game and all he was saying that he wanted us to be involved. In response to a question from John Quayle as to whether they intended to go ahead with or without us, Mr Cowley replied that they would be going on with it in any case. ...


I've just had a meeting with him in the last few minutes and from the first moment we've spoken to him, the main thing John Quayle and I have said over and over again, whilst we're prepared to sit down, negotiate and we would be prepared to conciliate, the one thing that was not negotiable was the fact that we would never be a party to the accepted authority of the game losing control. At the meeting today that we had with him, he has apparently had further thoughts on it and he did say to me today that he appreciated that if there was a move towards "Super League", they would accept the fact that it would be controlled by the Australian Rugby League."



In the course of the meeting, Mr Arthurson explained why the Commitment Agreement had not been forwarded to the Brisbane Broncos:


"... I'll be very candid, the reason why it wasn't forwarded to the Broncos was because, right at the particular time, we were looking for immediate expressions of loyalty towards the game and, I must say, that from the newspaper reports we had received, we weren't absolutely certain we could get that immediate support from the Broncos ...".

In answer to a question regarding how realistic it would be to get a Super League up and running,

"...we are currently working with our lawyers now to see how we can, we're doing our best to tie the clubs up and also we've obviously got to tie the players up because as you quite rightly say, I mean, another organisation can easily have 10 private franchises - I mean 10 privately owned companies and start something quite separately from the clubs, there's nothing at all to stop them if they can get sufficient players they can go ahead and run a competition in opposition to ours. But I guess that if we've got all the players tied up and all the clubs tied up, it's pretty difficult to do."

Meanwhile, News began developing the full official Super League proposal for presentation to the ARL and clubs. They contracted management consultants from Australian Consuting Partners to provide an analysis of all aspects of the Super League concept including contingencies if hurdles were encountered. The Proposal conclusions included,

The economics of an Australian Superleague are attractive overall versus the current competition.

ACP identified, in substance, three strategies, although they were not regarded as mutually exclusive. The first, labelled the "Establishment Approach" required a proposal to be presented to the League and ARL and envisaged negotiations with them "to make Superleague happen". This ran several risks, including being "strung along" or "outbid" by Mr Packer, as well as the possible inability of the League and ARL to deliver, given the perceived political hurdles.

The second approach identified by ACP was labelled the "Early Defection Approach". This also required a proposal to be presented to the League and ARL, but envisaged that they would undertake exclusive and reciprocal obligations to News. As explained by Mr Orlay of ACP in his evidence, if the League and ARL responded favourably to the proposal, News would revert to the first strategy.

The third approach, designated as the "Rebel Approach" involved News manoeuvring with stakeholders to strengthen its position, signing up key clubs on confidentiality agreements and then securing the agreement of the League and ARL and the remaining clubs.

The final draft of the document was presented to representatives of News Ltd on 13/12/94. In summary the main points were,

* 12 teams in fully professional Australasian competition

* Existing 20 clubs to remain

- Fielding teams in First Division competitions in NSW, Qld, ACT

- As shareholders in 12 Superleague Teams

* ARL continues to run football and mounts Tests

* News vigorously promotes the game nationally and internationally (e.g. World Finals) and provides finance.

Oddly enough on the same day that News received their final draft of the proposal to later present to the ARL, the minutes of the ARL annual general meeting reflect these comments from Arthurson.

"the original proposals were totally unacceptable. All Clubs had signed an agreement drafted by the League's legal advisers committing themselves to remaining with the League for the next five years and not to play with any other organisation.

At a second meeting a concession was made by News Limited to the effect that any proposal for a "Super League" would provide that any such competition would be under the banner of the Australian Rugby League. News Limited had undertaken to provide a firm proposal by February. The Australian Rugby League must always control its own destiny but with clubs having signed the agreement the position seems assured for the future."

The Confidentiality Deeds

On 22 December 1994, News sent five clubs - Brisbane, Canberra, Newcastle, Cronulla-Sutherland and the Western Reds - a document entitled "Super League Confidentiality Deed". The covering letter stated that News wished to provide the particular club with an outline of the Super League proposal, which was to be presented to the ARL. The purpose of this type of document was to gain feedback from each of these clubs with the view to making small adjustments prior to the full presentation to the ARL in February.

The Final Proposal

On 5 January 1995, a draft of a script, to be used in conjunction with slides in a presentation to the League and ARL, was completed within the News organisation. During January, representatives of News met with officials of Auckland, Cronulla-Sutherland, Illawarra and St George about their proposed participation in Super League. In early February 1995, Mr Carr, the chief executive officer of St George, was offered the position of chief executive officer of the Super League club to be formed by agreement among St George, Cronulla-Sutherland and Illawarra. The offer was conditional, inter alia, on Super League eventuating and the clubs reaching agreement among themselves.

On 25 January 1995, ACP provided News with a further report, entitled "Superleague Options". This identified the "current proposal" as "News Superleague via Clubs/ARL". Under this proposal, Superleague would fund the ARL ($3m per annum) and the clubs ($2.5m). News would fund Super League in Australia and Europe, take a management fee and buy pay television rights ($4m per annum).

This proposal from ACP amounted to a recommendation from ACP to News of a payment of $37M per year to the ARL. News did not agree with this figure and increased it back to the $100M mark.

 

[DJ1]

Super League Pt5

The Eve Of The War Pt4

5) The Meeting

A meeting took place on 30 January 1995 between Messrs Arthurson, Quayle and Moore, on behalf of the League, and Messrs Cowley, David Smith and Lovett, on behalf of News, at the offices of News. The proposal for a Super League was officially presented to the ARL. The key points were,

* There was to be a twelve team competition, with the game's best players. This was to be an integral part of an international competition, with a world-wide audience of tens or even hundreds of millions.

* The existing 20 team competition would continue. The ARL's "pivotal role" would also continue, as it would administer the game. The ARL would run the State competition and Test matches and be responsible for the judiciary, referees and junior development.

* The existing 20 clubs would be shareholders in the licensed, privately owned Super League teams. This would eliminate the problem of breach of players' contracts, since there would be no breach. The 20 club competition would be the "breeding ground for the stars of the future".

* The 12 clubs would be based in Sydney (4), Queensland (2), Newcastle, Canberra, Melbourne, Adelaide, Perth and Auckland.

* The current financial status of the game, despite its success in attracting fans, was a net loss, with the clubs being dependent on subsidies from their associated Leagues clubs. The Super League proposal would allow the clubs to benefit from News' global media network. Super League would make it possible for $100m to be invested in rugby league, thus giving the ARL a "$100m friend".

* There would be a "fully representative Board of Directors", with three Superclub board members and the ARL represented. The chairman of the ARL would be the chairman of Super League.

* Profit distribution between the League and News Ltd was negotiable.

After the meeting had concluded, Mr Cowley asked if he could make a presentation to the clubs. Mr Arthurson responded that, subject to the clubs' agreement, that could be done. Mr Smith said:

"We want the League to support the vision of Super League, to support the concept".

Please note: The ARL's pivotal role would continue. i.e. There role in administering the game would continue. Remember the ARL did not own the game, as private companies were already established with ownership of a team. In esscence SL proposed an entirely new competition, which the existing (unsustainably loss making) 20 team competition would be a feeder for. This was an alternative to the existing ARL plan of a 14 team competition (Bradley Report) which the ARL was already in the process of implementing. In the case of SL however, a solid foundation of finance was to be made available to the League. In terms of FTA, Packer had the rights to the 20 team comp and would have been eligible to bid for the FTA rights to the new 12 team SL.

6) The ARL letter to the clubs


2 February 1995, Mr Quayle, on behalf of the ARL, sent a letter by fax to each club advising that a conference scheduled for 6 February 1995 had been cancelled and inviting the club to send three delegates to a meeting on that day. The letter, so far as relevant, was as follows:

"As you can appreciate this action, after all details for the Conference had been finalised, indicates that serious issues have arisen which require urgent attention. You are no doubt aware that the 'Super League' matter involving News Limited, the League, and Member clubs of the League, has again created a climate of uncertainty, and I must say, some mistrust amongst stakeholders within the League who potentially may be affected by 'Super League'.

Those implications were such that the League now feels that to proceed with a Chief Executives Conference involving the 20 current Clubs within the League would be irresponsible in light of certain aspects of the News Limited offer.

The purpose of the meeting will be to review the outcomes of the previous meeting held on this matter on 14 November 1994 at which the League sought, and all clubs gave, an undertaking of a five (5) year commitment to the existing Premiership structure.

It does seem, however, that in the aftermath of the News Limited meeting that there is considerable doubt regarding the commitment by a number of Clubs to that resolution.

In order that a full and frank discussion can occur, the League has invited the appropriate News Limited representatives to address the meeting so that collectively all Clubs are hearing the same message. Whether that invitation is accepted or not is not known at this time. In any case the League is determined to seek from clubs their position in relation to the 'Super League' proposal and the League role, if any, in that proposal.

So that all Clubs can leave the meeting with some certainty about their future, you are requested to carefully consider your club's position with regard to this potentially most damaging situation.


7)The News Ltd presentation to the clubs.


News Ltd presented the Super League concept to all the clubs representatives.

Mr Cowley reaffirmed the role of the ARL,

"Any role which News was to play in the game would not result in the ARL losing the control and administration of the game ... It is not intended for News to own the game ... News' interest in Superleague is to provide broadcast opportunities, not proprietorship of the game. "

After Mr Cowley and Mr Smith had left the meeting, Mr Arthurson pointed out that a television contract, including pay television, had been entered into with Channel 9 until the year 2000. Mr Arthurson told the meeting:

"The League does not want to be part of the News proposal, we can't accept it. It seems to me that the tactics of News appeared to be to divide and conquer....Our strength has always been our solidarity; the fact that we have always stood firmly beside each other. If we continue to stick together like this no one, not even Rupert Murdoch, will break our game up. The ARL does not want to be a part of the News proposal, and will not accept it."

When the meeting resumed after lunch, Mr Packer addressed the representatives. He told them that the Nine Network had contractual rights until the year 2000, which he expected the ARL and the clubs to honour. Legal action would be taken against any club or person failing to comply with their contractual obligations.

Mr Arthurson then sought from each club a statement of its position, with regard to Super League. The representatives of those clubs that said they had not signed any confidentiality agreement all expressed their commitment to and support for the ARL. Mr Morgan of the Brisbane Broncos said that his club had signed a confidentiality agreement with News, but had stipulated that the club would only play in a competition owned by the ARL. Mr Neil of Canberra and Mr Lawler of Newcastle said much the same thing, each stating that his club would remain loyal to the League. Mr Puddy of the Western Reds said that a confidentiality agreement had been signed by his club, but that it wholeheartedly supported the ARL.

Mr Arthurson responded as follows:

"Well, thank you gentlemen for that unanimous pledge of loyalty to the ARL and your commitment not to join a Super League of any description. I would like Colin Love [the League's solicitor] to say a few words to you in relation to further actions which may be necessary following your unanimous support given to the concept of the ARL controlled competition."

The League's solicitor, Mr Love, then addressed the meeting as follows:

"You will recall that in November last you all signed an agreement to remain loyal to the League for the next five years. Our view is that this agreement will withstand any legal challenge and in that view we are supported by the opinion of senior counsel. It seems to us however, that for more abundant caution it would be advisable to have the clubs sign a further agreement pledging loyalty to the League, which supplements and supports the original document."

Mr Arthurson then said:

"Once everybody has signed this Agreement that Colin has referred to, there will not be any doubt about anybody's loyalty to the League and indeed if there is any doubt about anyone's loyalty they ought not to be part of the League."

A motion was then moved and seconded as follows: "That it be recommended to the Board of Directors of the League that any clubs not signing the new Agreement by 9 am on 8 February 1995, or in the case of the Western Reds by 9 am on Thursday 9 February 1995 be expelled from the 1995 competition."

This motion was carried unanimously. A further motion was moved that no negotiations with News be undertaken by any club in relation to Super League. Mr Arthurson indicated to the meeting that this motion was unnecessary, having regard to the resolution already passed.

Immediately after the meeting closed, the board of the League held a meeting. The board resolved not to accept the resolution passed at the meeting. The board also resolved to seek legal advice regarding the action that might be taken against clubs which did not sign the new agreement by the due date and time.

Between the closure of the meeting with the clubs and before the board meeting, Mr Arthurson telephoned Mr Cowley and told him that the clubs had unanimously rejected the proposal put by News.

 

[DJ1]

Prelude to War summary


Due to new telecommunications infrastructure availablity, PTV was about to happen. Telstra absolutely had to have Rugby League on it's service either through a shared arrangement with all carriers having Rugby League or an exclusive arrangement. The preference was for a shared environment. Unforfunately, a polarisation occurred with Optusvision on one side and Foxtel, Galaxy, CETV and ECT on the other.

There were three distinct stages in negotiations.

1) (Opportunity through a win/win arrangement) News to give the ARL a huge financial injection in exchange for PTV rights (Total ARL control).

The ARL and Packer would not budge on this.

2) (Friendly takeover) Start a new competition controlled by the ARL, which meant that the PTV and FTA rights for the new competition were available to negotiate. This also accelerated the rationalisation plan which the ARL was already secretly in the process of implementing (Bradley Report).

The ARL rejected this with Packer also threatening all clubs and their respective executives with legal action.

3) (Hostile takeover) Start a rebel competition.


I believe that all sides did not do the right thing.

News (and Telstra) were in a no compromise situation in they had to have a Rugby League product at all costs.

The ARL did not operate in the best interest of the game as a whole in rejecting the best deal it had ever been offerred, then actively sought to undermine the compromise offers of News Ltd. They did not understand the overall issues of what was really at stake.

Packer, in holding the league to ransom with threats of legal action and refusing to budge on rights. Then later abandoning the ARL for a stake in Foxtel which left the ARL in a situation where they were forced to come cap in hand to SL for a compromise.

Good leadership at the ARL in the early stages would have recognised the true strengths, weaknesses, opportunities and threats in the situation. It was not about Rugby League.

 

[dimitri]

thats exactly right

it was never about rugby league

it was always about money

and thats why super league was a sham

 

[Man_of_Steel_1982]

The bottom line is, News and telstra could of waited until the end of the television agreement in 2000.

 

[DJ1]

thats exactly right

it was never about rugby league

...and the ARL failed rugby league in not realising the true state of play.

 

[DJ1]

The bottom line is, News and telstra could of waited until the end of the television agreement in 2000.

If that was an option they would have done that.

Unfortunately, the investment in the rollout of billions of dollars in cable infrastructure required them to be able to deliver Rugby League on that infrastructure.

It was not in the best interests of the game to exclude PTV companies Foxtel, Galaxy, CETV and ECT in favour of exclusive coverage on Optusvision. In hindsight we all now know that Optusvision did not have the funds to fully capitalise their rollout anyway. So 95% of Australia would not even have had access to the service.

Anyway, Mr Packer got what he wanted, a 25% stake in Foxtel.