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Too many NRL teams in Sydney, says David Gallop.
Get rich or die tryin'
Jacquelin Magnay | July 28, 2007
Thereare too many rugby league teams in Sydney. That is the sharp assessment of National Rugby League chief executive David Gallop as clubs, particularly traditional ones, come under sustained financial pressure to meet budgets. A Herald investigation of all 16 NRL clubs has shown some are juggling with player payments and costs, and generally survive through generous handouts from leagues clubs or shareholders, including News Limited.
Clubs have been forced to be creative and look outside of the game to generate revenue as leagues clubs tighten their generosity following further poker machine taxes and the non-smoking legislation.
"To put it bluntly, we probably have got too many teams in Sydney," Gallop said. "And the game is also a victim of the level the salary cap was forced to be set at after Super League when the salaries were out of control. Back then, the grant was $2 million a year to the clubs and the cap was $3.25 million, but conceptually the cap should have been $2 million. But it was impossible to bring salaries down that far because back then some clubs were paying $8 million and $9 million in salaries a year."
The club with the biggest handout is the Melbourne Storm, with News Limited injecting $13 million to keep the southern club afloat. But in the cluttered Sydney market the heat is on Manly, South Sydney and Wests Tigers to stay afloat financially.
Penrith chief executive Glenn Matthews predicted that in the medium to long term some Sydney clubs - all vying for the same sponsorship dollar in the tight market against the Swans and the Waratahs - may come under intense pressure to survive.
The Herald has found that teams such as Penrith, the Sharks and South Sydney are looking to further develop land and commercial premises to add a new layer of cash flow. Advertising on websites by the Bulldogs, boosting membership by the Wests Tigers and even opening a retail merchandising shop by the Roosters have been other non-game revenue activities
While the cost of running a rugby league team is generally around $10-13 million a year, $3.35 million comes from the NRL. The other big revenue raisers are sponsorship, merchandising and gate takings. But some clubs fall millions of dollars short. Three clubs receive more than $5 million a year from leagues clubs to subsidise their NRL teams and junior development.
The salary cap will increase to $4.1 million next year, and the NRL grant will rise to $3.45 million. Gallop said it was a stated aim that the cap would match the NRL grant.
the rest is here
http://www.leaguehq.com.au/news/news/clubs-feel-the-squeeze/2007/07/27/1185339261724.html
Get rich or die tryin'
Jacquelin Magnay | July 28, 2007
Thereare too many rugby league teams in Sydney. That is the sharp assessment of National Rugby League chief executive David Gallop as clubs, particularly traditional ones, come under sustained financial pressure to meet budgets. A Herald investigation of all 16 NRL clubs has shown some are juggling with player payments and costs, and generally survive through generous handouts from leagues clubs or shareholders, including News Limited.
Clubs have been forced to be creative and look outside of the game to generate revenue as leagues clubs tighten their generosity following further poker machine taxes and the non-smoking legislation.
"To put it bluntly, we probably have got too many teams in Sydney," Gallop said. "And the game is also a victim of the level the salary cap was forced to be set at after Super League when the salaries were out of control. Back then, the grant was $2 million a year to the clubs and the cap was $3.25 million, but conceptually the cap should have been $2 million. But it was impossible to bring salaries down that far because back then some clubs were paying $8 million and $9 million in salaries a year."
The club with the biggest handout is the Melbourne Storm, with News Limited injecting $13 million to keep the southern club afloat. But in the cluttered Sydney market the heat is on Manly, South Sydney and Wests Tigers to stay afloat financially.
Penrith chief executive Glenn Matthews predicted that in the medium to long term some Sydney clubs - all vying for the same sponsorship dollar in the tight market against the Swans and the Waratahs - may come under intense pressure to survive.
The Herald has found that teams such as Penrith, the Sharks and South Sydney are looking to further develop land and commercial premises to add a new layer of cash flow. Advertising on websites by the Bulldogs, boosting membership by the Wests Tigers and even opening a retail merchandising shop by the Roosters have been other non-game revenue activities
While the cost of running a rugby league team is generally around $10-13 million a year, $3.35 million comes from the NRL. The other big revenue raisers are sponsorship, merchandising and gate takings. But some clubs fall millions of dollars short. Three clubs receive more than $5 million a year from leagues clubs to subsidise their NRL teams and junior development.
The salary cap will increase to $4.1 million next year, and the NRL grant will rise to $3.45 million. Gallop said it was a stated aim that the cap would match the NRL grant.
the rest is here
http://www.leaguehq.com.au/news/news/clubs-feel-the-squeeze/2007/07/27/1185339261724.html
