John Hartigan, chairman and chief executive of News Limited (left) with Chief Executive Officer of the National Rugby League David Gallop (centre) and Melbourne Storm Chariman Rob Moodie. AAP Image/Tracey Nearmy
There has been much suggestion recently from sports fans that the Melbourne Storm are doomed and that News Ltd have lost money through their ownership of the Storm. Firstly, I’d like to look into the suggestion that News Ltd may be suffering.
News Ltd’s connection to rugby league started with the disastrous Super League war, when News Ltd attempted to buy rugby league in the mid-nineties so it could show the game on its imminent pay TV network, Foxtel.
News Ltd didn’t try to buy one or two clubs, but every club – the entire competition, the entire game.
It was only the strength of character shown by many in the league community that forced a standoff where News Ltd received joint ownership of the NRL with the ARL.
So News came out of nowhere and suddenly owns half the game.
They then sat at both sides of the negotiating table and rugby league was consequently undersold to News Ltd’s own Fox Sports in the latest TV rights deal. (The excellent AFL Independent Commission, free of any conflict of interest, negotiated more money for the AFL from News Ltd for their TV rights deal, despite inferior ratings on Foxtel).
So News owns half the NRL.
They underpaid for the privilege to show 5 NRL games every week on Fox sports, where rugby league is still the highest rating sport. They also have 66% ownership in the highly profitable Brisbane Broncos and have given no indication of giving up that ownership.
But surely they deserve some credit for propping up the Storm, the one team they created in the Super league war (which caused the North Sydney Bears, Western Reds, and the profitable Gold Coast Chargers to go under, and the axing of South Sydney in 1999).
The Storm are reported to lose $6 million per year, $3.5 million after tax right offs. (Brad Walter reported in the SMH last week that it is being investigated that Waldron and co deliberately inflated the amount the Storm were losing to receive more money from News Ltd).
However, in the NRL agreement, News Ltd receives $9 million every year from the NRL. They use this money to pay any losses the Storm incur and then keep the change.
News Ltd keeps the Storm afloat using money received from the NRL.
The Storm salary cap debacle has made a quick sale of the Storm impossible for News and they have acknowledged this by stating they will continue to fund the Storm for the next 5 years.
It is difficult for league fans to feel any pity for News Ltd, considering the profits they have made from underselling rugby league for 15 years.
This is, of course, why the Independent Commission is so important for the game. It will remove all conflicts of interest and allow the game to be sold for its correct value, which will then allow an increase in the salary cap for all clubs.
Had the game not been undersold with the current TV rights deal, (and the NRL current leadership must take some responsibility for this), it’s very possible the Storms salary cap woes would have been avoided.
So what about the demise of the Storm?
As has been highly speculated, we may have to wait until the final rounds of this season, or the first rounds of next season, to see if the support for the Storm in Melbourne has been pushed back 5 or 10 years, or not at all.
Many good examples of the Storm’s future have been made in regards to the Swans.
If the Swans were at the centre of this salary cap incident and had their 2005 premiership taken from them, would the AFL stand aside and let a club in Australia’s biggest TV market roll over and die? It’s ridiculous to suggest they would.
If CEOs of other NRL clubs wish to complain of the money spent to keep the Storm going into the future, they may well see that an independent commission puts the greater good of the game ahead of any individual club, as we have seen countless times with the AFL.
If you want to see the demise of the Storm, you’ll need to convince News Ltd and the NRL independent commission that the game will have the potential to make more TV revenue by not having a team in Australia’s second biggest TV market.
That would surely be impossible.
Reckon you can pick the winning team? Build your own dream team with Draftstars daily fantasy and compete on any match. For great odds on the NRL head on over to PlayUp. Imagine what you could be buying instead. Set a deposit limit.
Api Koroisau thought he slammed the ball down for a try but on review, the bunker said there was separation and ruled no try.…
Deine Mariner had a shocker dropping the last pass with the line open, but he made up for it moments later with a diving…
The NRL's match officials announcement on Tuesday lunchtime is usually cause for little fanfare, but sparked debate this week with top ref Ashley Klein…
It had all been going so well. Canberra were by far the better side for ten minutes, with Jamal Fogarty giving the Brisbane back…
Like most clubs, the Brisbane Broncos have had their fair share of big boppers over the years, many of them legends of the game.…
Who are the hardest working big men in the NRL?
