More Sydney clubs join NRL extinction queue
By Steve Jancetic, 24 May 2008 Steve Jancetic is a Roar Pro
Four more Sydney NRL clubs today joined South Sydney in claiming they were under serious threat of extinction due to the ongoing financial crisis in rugby league.
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While the Rabbitohs are reportedly struggling to make ends meet under the co-ownership of Peter Holmes a Court and Hollywood actor Russell Crowe, several other Sydney clubs are feeling the pinch of the NSW government’s increased poker machine taxes.
Parramatta, St George Illawarra, Penrith and the Bulldogs – all heavily reliant on grants from leagues clubs – admitted their future was far from certain if the status quo remained.
“We’re under massive pressure as well, just like every other club in Sydney,” Bulldogs chief executive Todd Greenberg said.
“We’re on notice that our grant may well be affected going into next year.
“We’re all in the same boat here and the future livelihood of Sydney clubs are all under threat.”
The remaining Sydney clubs – Manly, Wests Tigers and the Sydney Roosters – said while they had moved away from being so reliant on leagues club grants, they too had been and would continue to be grossly affected by a reduction in funding.
Cronulla did not return AAP’s calls.
Parramatta boss Dennis Fitzgerald, who will be part of a sub-committee which will appeal to the government for a relaxation in tax rules, said he could not guarantee the Eels’ long-term future.
“I can’t give an iron-clad guarantee,” he said.
“We as club managers probably underestimated the effect that the poker machines taxes, effectively it’s a 50 per cent increase in what we were planning but with other restrictions such as reduced machines for the big clubs like ourselves, reduced trading hours which makes a hell of a difference and then the smoking bans … it is a very drastic situation.
“Parramatta Leagues Club … the fourth biggest (in NSW) as far as machine revenues is concerned, we had a loss of $4 million and we’re budgeting for a loss of $3 million this year.
“If the government wants to see a whole host of licensed clubs together with NRL clubs collapse, they won’t do anything.
“If they want to help us, they will come to the party and coming to the party means reducing those tax rates.”
NRL chief executive David Gallop met with club bosses this week and admitted the outlook was bleak.
“The message is coming through in no uncertain terms that some Sydney NRL clubs will die if things don’t change,” Gallop said.
South Sydney director of football operations Shane Richardson today moved to reassure fans the club was doing everything it could do to secure its long-term future after Holmes a Court said “I can’t guarantee Souths will survive”.
There have been reports Holmes a Court and Crowe are set to scale back their investment in the club amid talk of a rift between the pair.
“It’s business as usual for us,” Richardson said.
“Now is a time for the members that have stuck by the South Sydney Rabbitohs to support the club.
“We lead the game in terms of growth in membership and sponsorship, but we need everyone who supports the club to stick with us and encourage other supporters to get on board and support what we’re trying to achieve.”
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Spiro Zavos said | May 24th 2008 @ 9:20am | Report comment
The problems with the financing of the Sydney RL clubs are real. Whether they will be solved by changes to the poker machine taxes and so on is problematical. The business model for the great number of Sydney clubs was set in the 1950s and 1960s when RL was the only game in town in Sydney on a commercial and mass basis. Clubs got reasonable gate money from ancient grounds, and were more than topped up with grants from the league clubs. Players weren’t paid much, and officials even less. Roy Masters tells stories of officials leaving the NSWRL meetings with their pockets stuffed with cheese squares.
The Super League disaster, professional rugby union, the advent of the Swans and the decline of the clubs and increased taxes on them have put the business model under extreme pressure.
What is the new model to be? The franchise system with Peter Holmes a Court and Russell Crow looks like breaking down (something that rugby union should note). It’s not clear that fewer Sydney teams will increase crowds or interests. Cronulla supporters are not going to change allegiances to, say, St George Illawarra. The St George Illawarra model has not been a success. It’s neither fish nor fowl. It seems pretty obvious that Illawarra should have kept its separate identity.
What is the answer. There is talk of putting teams into Perth and Adelaide. That’s been tried before. Perhaps it will work this time. Perhaps not.
What is the answer? Or the answers?
sheek said | May 24th 2008 @ 9:53am | Report comment
Steve?Spiro,
I can readily accept many of the Sydney based rugby league clubs, & some out of towners, are struggling financially. Even rugby union is under the pump.
What is more difficult to ascertain is just how popular RL remains in Sydney? There are many in the print, radio & TV media with vested interests in keeping RL at the forefront of the Sydney sporting landscape. You could say the situation with AFL in Melbourne, Adelaide & Perth, re vested media interest, is even more acute.
These people in the media have staked their careers on the continuing popularity of RL in Sydney. But it goes further, to corporate sponsors & merchandising retailers.
The apparent deteriorating private equity arrangement between celebrities owners Crowe & Holmes a Court & the rabbitohs must be sobering for the ARU (& their fans), who have seen private equity as the saviour of the future.
I was howled down for suggesting it before, but I will suggest it again. Rugby league may have to surrender its resources to rugby union, to form one new rugby code. But the new game might only look passably as being either league or union.
I would retain league’s 6 tackle count. But I would retain union’s 15 players on the team, competitive scrum & lineout. All other considerations aside, the scrum is a joke in league, & fast becoming an anacronism in union.
Previously, I have suggested league abandon the scrum in favour of an American football style line of scrimmage, & also allow the first tackle pass to be thrown forward.
Imagine my surprise when reading a Sean Fagan article on how American football evolved almost 100 years ago. In 1906, I think it was, AF abandoned the scrum for the line of scrimmage & allowed the first tackle throw to be forward. Although lateral passes are still allowed, they have almost gone out of fashion. And stats argue there is less passing & more kicking in league today, than ever before.
Another article surmised the changing nature of the five-eighth position. fagan argues this was the last backline position to be formaised in union. Originally, there were two halfbacks, but the one standing back was called the ‘stand-off’, still a popular term for the flyhalf in the UK.
Fagan went on to argue the league halfback is more like a quarterback today. History repeating itself? Firstly, American football? Next rugby league? Then perhaps rugby union? Makes your hair stand up!
The sporting landscape is definitely changing, but exactly how is difficult to predict (for me anyhow). Union & league may be forced to merge out of survival necessity. Then either seperately, or as a combined entity, they will have to address the increasing anachronism of the scrum.
The scrum is a 19th century invention, & 21st century sports fans are tolerating it’s oddity less & less. The scrum/maul/ruck was invented long before mass media TV exposure. What may have been a quaint 19th century entertainment, befuddles 21st century fans who want to see what’s going on, not imagine it.
Sorry, you might wonder how the scrum got into this? However, the structure of various games, as well as merges between codes, are all part of the big picture. The history of rugby union & rugby league in the annals of mankind, may prove to be nothing more than a single grain of sand on Bondi Beach!
cosmos forever said | May 24th 2008 @ 9:57am | Report comment
The English Super League has 12 teams, I can see the NRL heading that way (despite all of the talk of expansion).
3 x QLD teams, 1 x VIC, ACT, NZ, 6 x NSW.
That would mean four teams falling away in Sydney, as by my thinking RL is actually better suited to small passionate markets like Newcastle than fighting for space in large markets like the generic ‘Sydney’ (and no – I’m not discounting the passion of Sydney club fans, just pointing out the crowded market that exists).
I keep the ACT, VIC and NZ teams for the same reason – niche teams in one team markets.
This logic makes it even tougher if you consider Penrith as a regional team. That only leaves four spaces…
So – no expansion to Perth or Adelaide. A competition not much smaller than the Super 14 but with the benefit of almost year long competition, hihglighted by SOO. Build in a season long Cup, as has been discussed on the Roar before – that not only allows the four teams that get lost to the NRL to play, but other country and club teams still kicking around like Newton etc and you have a pretty good overall comp. That also does away with all of the merger talk as clubs can face facts and drop a level but still have contact through the cup.
Lowy is talking about promotion / relegation for football by 2018 – maybe the NRL needs to head this way as well.
Midfielder said | May 24th 2008 @ 10:05am | Report comment
Spiro, Sheek, Cosmos,
Enjoyed reading your posts, all made valid points.
cosmos forever said | May 24th 2008 @ 10:10am | Report comment
Off topic but I never understood why AF teams didn’t run a series of lateral passes and force an overlap. Is there a limit on laterals per game? I’d be more than happy to join the NY Jets training staff to show them how to pass.
Imagine blowing al of those deep zone defences off the park with some good old fashioned spinning it wide…
Sorry to go off topic!
Rob said | May 24th 2008 @ 10:18am | Report comment
Sheek, Fair comments. But are we just looking at League and Union through Aust. eyes ? Are those codes in strife in say Uk and/or France.? I dont know that answer. Any thoughts from you?
sheek said | May 24th 2008 @ 2:08pm | Report comment
Rob,
Initially looking at Australia only. Although I think the scrum, as mentioned, is something both codes will be required to look at, league sooner, & union later. But that’s part of another debate, I guess.
I’m guessing each generation of newer sports fans will be less & less interested in the mysteries of the scrum. Just the same way cricket 5 days tests is struggling to compete with the hurly burly of today’s life, & the threat from twenty20 cricket.
Cosmos forever,
There’s nothing stopping AF teams from performing as many lateral passes as they like. You might remember video footage shown on The Roar some months ago of a US University match. The winning team strung together about a dozen passes to touchdown with time up.
Itr’s about ball security, which is also a blight in union & league. But AF took it to extreme measures. Now AF teams will advance basically one of two ways – usually the forward pass, or the short back pass. But retaining possession is all-important.
And my apologies also going off-topic.
There’s a media report AFL wants to buy Stadium Australia, which would make them a hostile landlord to union & league & soccer. Is AFL really that cashed up? Last offer early 2007 was about AU$200m. You would think it would be worth much more now.
There are images flashing through my head that in 50 years 4 footy codes could be down to the 2 AFs – Australian football & Association football. Or 3 AFs, if union & league go down the merged American football path.
Sorry, hope I didn’t spoil anyone’s afternoon supper!
Scuub said | May 24th 2008 @ 3:40pm | Report comment
The merger of the two rugby codes is less likely than the slow degeneration of one by the other.
I believe that, eventually, the huge amounts of money being thrown about by NH rugby union will pull most of the top talent, media coverage and then fans across to the 15 man code. The growth of Union in the North is around 12% pa. Super League is still growing, but at around 4-7%pa. It also doesn’t help that, in the north, Union clubs earn a lot more than League clubs already anyway.
Basically, as all pro sports look to expand their game (and whether or not a salary cap exists) teams will put more and more pressure on their governing bodies to raise salary caps, to be able to attract better talent to their teams . This is prevalent in AFL and has recently occured in the Guinness Premiership, where the salary cap was pushed to 4M pounds, compared to 2M pounds.
Only a handful of the current clubs can realistically afford this raise in wages, but the will of the stronger clubs usually drives any comp, especially so in Soccer.
If the UK and French clubs continue to grow their businesses then very soon the earnings of union player could far outweigh those in league, especially if money remain tight. If SANZAR can also successfully create a SUPER Super Comp, as well as introducing private equity, then the earnings of Rugby Union in Australia may also move out past that of League. A fifth Aussie Super team would mean 35 more highly paid professional Union players.
For the time being however, I beleive these press releases are more about adding fuel to the sub-commitees requests to the NSW government and about trying to get more members to commit money to the clubs.
But it certainly doesn’t bode well for the NRL if money is becoming tight at the same time that Union is looking to double the length of it’s flagship pro comp in the South and when players in NH union clubs can earn so much more year on year.
A few other questions would be:
How would the Raiders fair if the Brumbies were to play twice as many games each season?
How would the Storm fair with a new Super Rugby team in Melbourne?
How would the Warriors go if a Pacific Island Super Rugby team was to move into South Auckland and Mt Smart stadium?
In a time where loyalty in sport appears to be sinking below money, as the major motivator for players, will predicitng the success of a code be as simple as looking at who’s got the biggest chequebook? I hope not, but fear so.
Finally, if the Rugby codes were to become one again, would Soccer try to move into being a direct competitor (ie a winter sport) or do you think it will remain as a niche summer sport as it is currently?
JimC said | May 24th 2008 @ 4:11pm | Report comment
I’m not sure that Sheek’s thesis on the rugby league media is correct. I would say many in the media are enemies of the code. This morning’s appaling article in the SMH by Brad Walter is a case in point. He basically suggests rugby league should throw away the salary cap and pay SBW and Gasnier big bucks to stay, as this will keep the crowds pouring in, despite presenting no evidence of any correlation between Bulldogs, Saints crowds and the presence of either player on the pitch.
He uses the billionaire funded cricket IPL crew like Symonds and Ponting, plus the ridiculous salary of Matt Giteau as evidence that the two players mentioned are underpaid.
This is the economics of the madhouse. The salary cap is the best thing rugby league ever did. People come to see the rivalry of two football teams, not just some big name players. Manly vs St George is what pulled in 12000 last night for a TV game, not a couple of names on the teamsheet.
I hope David Gallop has the strength to ignore myopic opportunists like Walter, who no doubt is trying to keep close to the two player’s respective agents by keeping this story alive, rather than report the news.
Much as i’ve enjoyed watching Gaz and SBW, if they want the big bucks in France, let them go. It’s their life, but it’s our game.
NUFCMVFC said | May 24th 2008 @ 8:41pm | Report comment
Scuub,
I would say that Association Football will stay predominately in Summer here, makes sense not to go directly head to head but it is also in line with the European Leagues
The A League will inevitably have to extend their season though for player development reasons, because a 22 round comp + finals is ridiculously short in the footballing world but there are also requirements from AFC by 2012. I would say that this would be somethign of an overlap where the start and ends of each comp overlap,plus the FFA Cup which has been mooted wil have to incorporate summer A League clubs and winter State and lower league clubs but mostly they will be wanting to share the generalist Sports fans with an interest in a variety of the codes to ensure they have a good “top up” on the hardcore diehards who pretty much live for just the one code. There will be ACL, but that will be weeknights so there still is no direct competition.