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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May 24th 2008 @ 10:03pm
Redb said | May 24th 2008 @ 10:03pm | Report comment
Sheek,
The story of the AFL and ANZ stadium was ‘broken’ by a RL writer from the Daily Telegraph – if you read the article it appears the AFL tried a year ago, but the debt was too great. it is pure speculation.
But let’s suggest the AFl does buy the stadium, are they going to be so tunnel focused that they would refuse access to RL’s SOO, union’s Bledisloe or the Socceroos big games? I seriously doubt it. The AFL remains a business it would be crazy to give up this revenue for a single weekly game of AFL in Sydney. Would never happen and smacks of hysteria by News Ltd media.
Redb
May 24th 2008 @ 10:32pm
Paul said | May 24th 2008 @ 10:32pm | Report comment
The situation is certainly a sad one. It is always sad to see traditions die, but sometimes they are just forced out by market forces. The discussion of code merging has gone on for years, but the only problem with that is whether the two international bodies would want to merge. But in Rugby, Australia is a world leader, so if Australia made moves the rest of the world may think about the issues involved.
My observation though is that Sydney people are simply not turning out enough for the NRL. It is sad, but if people are serious about their team not dying out, then they should turn out to the games. If every fan of the struggling clubs did this, perhaps they will still have a chance to survive.
It seems in general that Sydney people are turning off sports of all sorts. I wonder what the reason for this is, but it is a little baffling.
May 25th 2008 @ 7:31pm
sheek said | May 25th 2008 @ 7:31pm | Report comment
Redb,
I was looking more at the fact the AFL has the money to buy Stadium Australia, more than anything else. It demonstrates I think AFL is the richest football code in Australia. Association football is making huge strides, & with its global reach, must be respected.
Neither rugby code might survive into the future alone. I would suggest union, with its stronger international flavour, is better placed than league, although league is the stronger in Australia.
The two rugby codes might be forced to amalgamate for reasons of business practicality & survival necessity. I’m not saying it WILL happen, but it MIGHT happen. League might reach a point where, in order to preserve its icons – Broncos, Knights, Storm, Titans, etc – would find it the lesser of two evils to merge with union.
Union, on the other hand, would no doubt covet league’s assets – national club icons, junior player base, etc. I know this suggestion ruffles a lot of feathers, but who knows what the future holds?
And I agree with Paul. In Sydney, sports fans are staying away from many sports. Is it the cost of buying tickets? The hassle of accessible transport & parking? Too easy to watch on TV? Dissatisfaction with the product presented? Maybe a combination of all?
I hate to say it, but unlike Melbourne, Sydney is a jungle to get around. Maybe we should all go overseas or interstate for 12 months, & nuke the whole place, except for the icons, & start again, with motorways, rail, tram & bus routes a priority.
May 25th 2008 @ 7:59pm
cosmos forever said | May 25th 2008 @ 7:59pm | Report comment
Or move to Canberra! Seriously, if it had taken me 90 minutes to crawl down the M5 to get home I’d be quite reluctant to head back into town to watch a footy game. I jut don’t know how you people do it.
May 26th 2008 @ 9:21am
Redb said | May 26th 2008 @ 9:21am | Report comment
Sheek,
I’m not sure it’s a great move by the AFL. A few of us were around when games were played at Waverley Park in Melbourne’s south-eastern suburbs this was an 80,000 seat venue built and owned by the AFL. The fans hated it, poor access, getting out of the car park was a nightmare, poor atmosphere, nicknamed ‘Artic Park”. Sound familiar?
I’m not sure it would add any value to the AFL, as long as the AFL has access why own the thing?
Re Melbourne and Sydney accessibility – well a few of us Melbournites have been saying this for years on various Sydney forums – the sports precinct adjacent to the CBD houses the MCG, Rod Laver Area, Vodaphone Arena, Collignwood’s Lexus Centre, Olympic Park athletics Track and the new rectangular 30,000 seat stadium which is being built. This is all within walking distance of the CBD (so all city carparks are accessible), trains, trams and buses ferry fans in from the suburbs and back out again. The whole Melbourne sports precinct is linked by elevated walking platforms – it is amazing.
The problem with the NRL Sydney clubs appears to be a lack of solid fan base – clubs built around pokies venues not club membership. Pay Tv revenues go to Foxtel, sure the NRL gets TV money, but growing the game solely on TV ratings creates a false economy. AFL club membership under pins the crowds of the AFL – for about $300 (bronze membership) you can get a guaranteed seat at all 11 home games for the season. It doesn’t mean Melbourne or North Melbourne are viable long term though and the AFL will face similiar problems in the future.
For the record the AFL has managed to maintain the traditional VFL clubs in some form, the only VFL club to fold completely was University about 70-80 years ago. Once you lose your club you lose the traditional link to the game, its hard to just pick another team and become a convert. This is lesson for all new sporting franchies – whilst they are winning the crowds will come but soon as they start losing the support they so easily obtained vaporises – what endures is likelong fan support for your club. I know, I barrack for Essendon and its hard at the moment but I would never give them up for another club.
Redb
May 26th 2008 @ 10:11am
Farmer said | May 26th 2008 @ 10:11am | Report comment
I would agree that the RL business model is under pressure for several reasons -
1. Unable to pull enough money through the gate. Lower crowds eg 10,000 to a club game delivers say $150,000 – hardly enough to pay the running costs of players. Compare this to an AFL average crowd of 35,000 + contributing 3 times as much. RU crowds of 25,000 contribute two and a half times as much.
2. Sponsorship is too tight with too many competing sports. Previously RL has relied on freebie grants from the Leagues clubs – but these are under pressure now.
3. The owners of the sport ( News ) want their pound of flesh out of the game. For News it is a business which must pay its way and serve its purpose.
Without dollops of cash from the leagues club , NRL football clubs in general are not viable. They do not generate enough cash through the gate , merchandise or NRL grants to do what they need to do. Businesses cannot survive spending more cash than they have – it is a no win game.
The only reason there is a salary cap is to keep the clubs expenditure to a limit where thay might be able to afford it. The reason it is not higher is that there is not enough money in the sport fo all clubs to pay the higher cap. No use having 2 – 3 clubs spending up big and the rest being burnt off for all the talent. So, yes it does serve the purpose of keeping all sides equal in resources / talent, but the reason it is there and the reason it is not higher is that the game cannot afford any more and I sense will be able to afford even less in the future. The only way maintain the staus quo in the furture will be to reduce the number of clubs.
I sense a slow decline in the RL business model. Player drain will continue, especially to the NH ( mainly RU clubs) . The best will continue to be creamed off the top which eventually means the overall standard falls and interest drops. Clubs will be dropped off, those fans wil be disenfranchised and leave the game – they will not jrust on to a new club. The Bears example is a recent eaxmple of this.
RL/RU will not merge into a hybrid game. One is an international game ( and the other is not) and international RU does not/will not need to accomodate changing for a local market like Aust. Just look at the difficulty in getting the ELV’s introduced and the attitude of the rest of the RU world to anything looking like an initiative from Aust RU.
RL will survive – there is a core supporter base but the endless navel gazing and questioning of what is wrong with the game will continue and intensify. The stalwarts will yearn for the good old days but times have changed and the caravan is only a distant sight on the horizon. The RL for a start no longer owns their own game anymore – they lost control in the Super League war. As teams are dropped or amalgamated , more core supporters fall off.
All of the above does not seek to judge what is the best game – RL / RU / Football / AFL – just an observation on the evolution of winter sport in Oz.
Cheers
May 26th 2008 @ 12:59pm
Michael C said | May 26th 2008 @ 12:59pm | Report comment
I can’t help but think that this centenary year has been used in many respects to try to mobilise the ‘troops’ – -
Gallop has effectively appealled to the ‘heartland’ supporters,
tried to pump up the ‘threat’ of the AFL and the ‘war of the codes’
and why?
Because, irrespective of what happens – even if there’s a short term reprieve re. the pokies taxes – -
NRL clubs need to broaden their revenue base.
They need to engage with their supporters to become cashed up members.
and they need to get bums on seats – -
because,
the TV rights are not enough stand alone.
Even with smaller suburban venues – - where clubs SHOULD have a waiting list for seasons membership tickets – - they don’t.
The larger venues are struggling to be filled enough to turn a profit – - which reduces the value of catering rights etc as well – - as, with the AFL I know that clubs get bonuses based on hitting certain average crowd figures because the AFL effectively sells based on average attendance.
- – - – -
NRL though – probably does need to ‘contract’ -
because, unlike the AFL – - if the NRL tries to expand, and needs to pump $X extra into such expansion – - the reality is that the ARU and Superleague WILL continue poaching the good players – - and, this had become a problem already with a recognition of reducing levels of player ‘depth’. It’ll only get worse.
The NRL might need to strengthen their fortress, putty up some of those cracks.
And -
battlefield Sydney/NSW -
irrespective of the AFL threat (which I still believe is entirely over stated as a deflective way of rallying the forces to actually combat soccer, SL and ARU – - which are the real threats) – -
Sydney and NSW is battleground in the extreme – irrespective of any piddling efficiency gains via shared grounds – - -(which, already exist, so, it’s not like new venues other than Robina are popping up for the benefit of all – - especially in NSW)
and, RL vs RU firstly is not a distinct enough game
RL vs Soccer – already, the HAL is walking all over RL traditional strongholds, such as Newcastle, and possibly might be wedging the NRL out of Gosford/Central Coast, and if many soccerheads get their wish, will go head to head in Wollongong, maybe Canberra, Gold Coast etc – - – Farmer above speaks of the sponsorship dollars – - – and, for predominantly Pay TV product – - the regionals matches – - – the sponsor value is MOSTLY regional. Soccer and RL sharing a venue is a minimal benefit compared to the loss of monopoly professional football code in multiple largish regional markets.
so, NRL – - desperate to develop new support driven revenue streams for the clubs.
May 26th 2008 @ 1:18pm
sheek said | May 26th 2008 @ 1:18pm | Report comment
Redb,
It fascinates me that the mostly inner-city VFL/AFL clubs have survived so long despite the population growing & moving outwards. There is no Dandenong in the AFL for example. These clubs have maintained their popularity & following despite the population growing up elsewhere.
In Sydney, inner-city clubs came under the pump almost immediately. Glebe, an inner-city foundation club & one of the better clubs, was gone by the mid-20s, just about 20 years after league started in Sydney. Also Annandale. In the 1980s, Newtown went, while inner-city foundation clubs Wests & Balmain merged, but relocated to Campbelltown, in Sydney’s outer south-west.
North Sydney has gone, while South Sydney has gone, reuturned but is unlikely to survive unless it considers a relocation to Central Coast. The only foundation club that has survived unbroken since 1908 is Eastern suburbs, although they prefer to be called Sydney Roosters now.
It’s fascinating how the AFL have preserved their inner-city clubs. i also note that the AFL now uses only 2 grounds in Melbourne for their home games. Another clever idea. In Sydney, if AFL bought Stadium Australia, they would still rent it out to union & league for internationals, supers, SOO, etc. But league would lose its club games access I think. Not that league fans would mind that!
Farmer,
My idea of rugby union & rugby league merging is hardly to develop a hybrid game (although I toss the idea up occasionally). I think it will be like a hostile business takeover. The leagueies will be playing union, but would merge in order to preserve their icons. However, I could see even international union moving towards American football, but that’s another story for another day!
Rugby league might not even get a say in it’s future…..News Ltd might make that decision for them! Union & league suffer in Sydney from failing to kill each other off. They develop roughly the same kind of players. Thier markets are always split, allowing/preventing neither the opportunity to maximise their business model.
News Ltd, which is heavily invested in both codes, may decide one day to play God, & kill off one or the other. With union’s greater international popularity, league would be the sport under the pump.
If you read the body language of all the personalities on all the channel 9 TV shows associated with rugby league, & media reports, there is a soberness that has come to their collective demeanour. They are no longer dismissive of union, AFL or soccer. They know their game is in trouble, on may fronts, no matter how they try to dress it up otherwise.
May 26th 2008 @ 1:27pm
Michael C said | May 26th 2008 @ 1:27pm | Report comment
Sheek -
the irony in the AFL for example – of clubs like North Melb (for a while) and Footscray in trying to trade via more ‘generic’ brandnames – - is that via ground rationalisation – - the traditional name and training venue don’t mean nearly as much – compared to where the people attend the match.
The other irony being that the draft has watered down the capacity to recruit heavily from a local region – - and, yet, this seems to have worked – -
however, were the clubs privately owned – - maybe it wouldn’t,
I still reckon, the member based model is a fine one, and that the NRL needs to avoid the Rusty Crowe style owners – - and move more to community/member owned club models. That is a far, far greater encouragement to take up seasons tickets than simply being a ‘customer’ of the franchise.
Or – - is it just, that so many more people like the ‘idea’ of the Rabbitohs than do like the reality??
May 26th 2008 @ 1:47pm
Redb said | May 26th 2008 @ 1:47pm | Report comment
Sheek,
I guess you could say that Melbourne and North Melbourne suffer from inner city-itis as well. South Melb already went, Fitzroy right on the edge of the CBD gone as well. Places like Dandenong, Frankston, Greensborough, Werribee all benefit from traditional supporter families moving further out with each generation. The allegiances stay the same.
If only Collingwood could be relocated to Easter Island we could all be happy.
Redb