The NRL should be creative with expansion

By Chibba / Roar Rookie

Can NRL CEO David Gallop and the other sporting codes capitalise on the AFL’s Free-to-Air exclusivity with Channel Seven? (AAP Image/Dean Lewins)

There has been much discussion about the possibility of the NRL competition expanding from sixteen to eighteen teams. There have also been arguments that this would spread the talent too thinly, wouldn’t have enough support in some areas, and so on.

But there are other ways to expand instead of just plonking a team in the competition.

If the NRL was creative about expansion, it could combine the NRL, QLD Cup and NSW Cup into three divisions with promotion and relegation.

This would happen after the next TV rights deal expires (start in 2018), so there is enough money to start the competition up.

The advantages of promotion and relegation are that it:

– allows the league to expand and change organically and is fairly based on a team’s performance and success.

– avoids the necessity of enforced and unpopular club mergers, culling or relocations for struggling clubs.

– heals the wounds of Super League by bringing back teams like the North Sydney Bears, Illawarra Steelers and Western Suburbs Magpies.

– provides greater meaning and incentive to games at the end of the season for relegation-threatened teams.

– allows teams with a rich history, who have previously played at the top level to aspire to once again play at this level.

The teams eligible for the new competitions in the NSW and QLD Cups would include:

NSW: Newtown Jets, North Sydney Bears, Central Coast Centurions, Western Sydney Magpies (Wests Tigers would become Balmain Tigers again), Windsor Wolves, Illawarra Steelers (set to enter NSW Cup next year)

I have cut Wenworthville Magpies due to close proximity to Parramatta, while the other cuts are due to them being the reserve team for a current NRL team.

QLD: Northern Pride, Souths Logan Magpies, Redcliffe Dolphins, Ipswitch Jets, Wynnum Manly Seagulls, East Brisbane Tigers, Mackay Cutters, North Brisbane Devils, Central Queensland Comets, Sunshine Coast Sea Eagles

Tweed Heads Seagulls and Burleigh Bears are on the Gold Coast, so would be cut. Since the NQ Cowboys would only be representing the Townsville region, they would become the Townsville Stingers. (were in the QLD Cup at one stage)

Here’s how it would work:

The top 12 teams of the 2017 NRL would qualify for Division 1.

The bottom four NRL, top three NSW Cup and top five QLD Cup make Division 2.

The bottom three NSW Cup, bottom five QLD Cup, and four expansion teams make Division 3.

These expansion teams could include Perth, Wellington, Christchurch and Adelaide/Darwin/PNG and so on (expansion teams debatable).

Based on this year’s results, this would mean the divisions would include:

Division 1: Melbourne Storm, Manly Sea Eagles, Brisbane Broncos, Balmain Tigers, St George Dragons, Auckland Warriors, Townsville Stingers, Newcastle Knights, Canterbury Bulldogs, South Sydney Rabbitohs, Sydney Roosters, Penrith Panthers.

Division 2: Cronulla Shark, Parramatta Eels, Canberra Raiders, Gold Coast Titans, Newtown Jets, North Sydney Bears, Central Coast Centurions, Northern Pride, Souths Logan Magpies, Redcliffe Dolphins, Ipswitch Jets, Wynnum Manly Seagulls.

Division 3: Western Sydney Magpies, Windsor Wolves, Illawarra Steelers, East Brisbane Tigers, Mackay Cutters, North Brisbane Devils, Central Queensland Comets, Sunshine Coast Sea Eagles, Perth Reds, Wellington, Christchurch, Adelaide.

Now for the economics of it all. With the current salary cap ($4.4m), the players received between 22-23% of all NRL revenue.

This means the NRL gets $306m revenue per year.

The current TV deal ($500m over six years) provides $83m, meaning the NRL receive $223m in ‘other revenue’.

Assuming this would increase to $250m by 2018, and the NRL secures a $1b/five years TV deal, their revenue in 2018 would be around $450m/year.

If the salary caps for each division were $8m, $4m and $2m respectively, the total players wage would be $168m. If the club grant was $1m over the salary cap (the NRL has indicated that it wants the grant to be more than the cap), the club grant would total $204m.

The clubs would then get 45% of all revenue. This would leave $246m left to invest in grassroots and whatever else they spend it on, $23m more than they currently do.

With the TV rights expected to bring in around $1-1.4b over five years, the NRL will have the funds to make it happen. The fans would still turn out as they do.

We just need someone up top with the courage to make it happen.

The Crowd Says:

2012-02-18T22:44:18+00:00

Dr B

Guest


Chibba, this divisions idea for promotion and delegation is the basis for what I have always believed. Two differences of ideas I have however. Firstly, there should be about 5 divisions. Local clubs everywhere would have a chance to enter at division 5. You would have people at Goondawindi, West Dubbo, East Timbucktoo, anywhere really vieing to get into the competion. This would attract local businesses to invest, through advertising etc. It only adds to the total purse for the overpayed executives, and to be put into the 1st division as you have described it. The 4th and 5th divisions would have no limit to salary cap, but would decrease (if they could meet the division 1 cap) as you enter division 3. Therefore once you have attracted players you would need to prove your merit and quality not just how many dollars you can get. Yes it would spread money a little more through investors to the tall poppies, but so it should. People should invest locally if they choose, or in a division 1 club if they choose which would achieve them greater Tv exposure. The current method sucks money from one town to give it to a bigger town anyway, no good. Secondly, I would bring back the Mighty North Sydney Bears in division 1 straight away.

2011-10-20T09:30:10+00:00

Crosscoder

Roar Guru


Wookie In fact there is a rampant AFL running through the west with an open chequebook.A Mr Folau has been one of the recipients of that book's largesse.Else he is playing for love not money. The expenditure outlaid in grassroots development by the code,the fact the code is spending $20m pa,is hardly evidence of a code with a limited budget. Rugby league saves decent amounts by centralising the game in one building,avoiding duplicationThey do not have to pay News Ltd the $8m pa as part of the profits. I think it is fairly safe to say rl will secure their $1b on Tv rights ,when Sky NZ is included.Based on other Tv stations suggesting ch9 will have to pay at least $120m pa for the rights,before Pay is taken into account. Based on that minimum scenario the clubs were given at the meeting with Gallop and Smith,a grant of $5.6m was indicated. In additon to the Tv deals,national sponsorships are due for renewal or for auction. The revenue for 2007 was Broadcast rights $82m Sponsorship/internet,mobile $15m Intnl Tv /radio $5.5 Soo/Finals $22m Merchandising revenue $1,5m Total $126 So Tv rights in 2013 min $200m Sponsorship etc $30m Intnl/radio $10m Merchandising $5m At a minimum $245m pa,and that is not even doubling the figure.So a total revenue figure of $300m from all sources is not out of the realms of possibility.More so based on teh 2010 figures of $170m(which includes an ordinary Tv deal). The expected revenue in 2010 you mentioned anycase,has no relevance to what is negotiated for the 2013-2017 period. The Tv ratings for the past 5 years for both FTA and Pay ,have put the code in the box seat with both 7 and 10 wanting a slice of the pie.

2011-10-20T09:04:02+00:00

Crosscoder

Roar Guru


clipper Look at your own backyard,the lawn needs mowing. Having your usual dig at the players involved in rl tests.My good man,have a look at the players playing for Japan in the RWC,the number of caucasians left me confused. We are now getting guest players for the S15 teams,soon they will populate the joint. Look at some playing for England,a couple of polynesians.And the Australian playing,was it Russia or Wales? Try to get your national 15 man side up to speed,before having your usual shot at intnl rl.Perhaps start by teaching them how to run angles,use decoy runners,instead of umpteen boring one out phases to try to get over the ABs line. Oh for the days of Lynagh et al. Good to see you can't step out of rah rah mode. As the ABs would say 4 more years,back to hibernation.

2011-10-20T08:49:32+00:00

Crosscoder

Roar Guru


Jaceman.Ever heard of the Christchurch earthquake. They have not been playing tests at Mt Smart for some time,and Eden Park was unavailable.The GC stadium was available,and the Mad Butcher actually paid for a couple of hundered fans from Christchurch to attend at the GC. It had zilch to do with competing with the AFL

2011-10-20T06:03:28+00:00

Jaceman

Guest


Todays not unexpected rumour is that Seven will bid for Fri night NRL (which has big nos) and Ten will bid for Monday night (so packer can get the stay at home punter to bet from home on live broadcast (simulcast with Fox). Sun arvo with low numbers (<500k) - there will be less interest

2011-10-20T02:18:02+00:00

clipper

Guest


Jaceman, by rights they should have the majority of games in Australia, after all it is the Australians who play in the NRL vs the Kiwis that play in the NRL, which is similar to the indigenous game they have - the aboriginals who play in the NRL vs the non aboriginals who play in the NRL. I think they should actually change the Aust / NZ test into the Australians who play in the NRL vs the people born outside of Australia who play in the NRL.

2011-10-20T01:39:03+00:00

The_Wookie

Roar Guru


A couple of things. Your financial estimate of NRL funding of 303 million is way out. According to the Australian expecxted revenue in 2010 was only 170 million (it was 157 million in 2009). If 16 NRL clubs are generating 130 million a year between them (and thats not even 10 million each - and it would be appalling given the grants in the same year were 55 million, and brisbane turned over 36 million on its own) - there just wouldnt be the money. Further the clubs wouldnt share their own revenue - thats what the NRL revenue streams are for, Why else is there a stink over an additional 8 MILLION in funding next year. Finally, even doubling the tv income doesnt produce the kind of figures you're suggesting, adding only 80 million a year, giving the NRL (the league) total funding of 250 million per year (not 450 million) + whatever increases arive from other sources. You really are dreaming if you think the clubs will pass up their own revenue for 2nd and 3rd division entities, especially after they receive the bonus additions to the grant they are expecting and the grassroots gets additional funding to stave off the perception that there is a rampant AFL running through the wilds of sydneys west with an open checkbook.

2011-10-20T00:47:30+00:00

Jaceman

Guest


CC So if there is going to be a RL Test in Aust and NZ each year, why did they move the Christchurch May 2011 Test to the GC and not Mt Smart...

2011-10-14T15:18:18+00:00

Queensland's game is rugby league

Guest


Robertson, "as for you sitting up there in Q’land telling the NRL to remove this club or that club from the NRL, how would you feel if you happen to be a supporter of this club for the last 50 years. You obviously know no nothing about tradition or loyalty" Go tell that to the fans of the BRL.

2011-10-12T21:37:05+00:00

Crosscoder

Roar Guru


Jaceman No sirree. My point actually acknowledged clubs have financial issues as do those of other codes.It is not unique,and it is not a good look. Some of the bids would struggle!! Fairly bold statement as we have not seen the bids in their entirety.From the basic details i have seen,many are first class..PNG obviously because of their lack of infrastructure.You stated Gallop is having enough trouble getting two teams in.Expansion in either 2014/15 will be two teams not one,I cannot see the difficulty, except for those that miss out. The current clubs want financial stability and sustainability first and foremost.That is the reasoning behind the 2104/2015 startup date for expansion.Gallop has spelt it out monotonously. The clubs then will have no objection to expansion,I have been keeping track for yonks on that issue.They have spelt it out time and time again.Searle,Humphries being among the most vocal.It is the timing and their need to consolidate financially for the first one or two years,that must take preference.. Let us say I follow rl first and a little ru ,a lttle soccer at wc time.It is just that I have not the time and inclination, to spend addtional time on other code threads.I used to play the other two,that is the reason for my interest. Jaceman I am not naive. GWS and the Swans are heading for a match to coincide with the start of the NRL season in Sydney.You brought up the point,that the NRL will schedule some Sydney game to oppose such a thing.And with Folau being waved like a red rag to a bull,so they should,if that is the way it ends up.. If you read and listen to what is going on in the press,whether it be establishment of the I.C,clubs wanting more money,clubs wanting certain days to play their home matches,the Tv stations who want 1,2 and 3 digs at the weekly offering,whether it be tests or SOO or ALL stars,there is a multitude of decisions to be made.I suggest the AFL getting their schedule out first ,is the least of the code's worries ATM.The code has to juggle a variety of things,which the AFL does not have to worry about It is not a 4 nations correct ,that is being held in England,end of this year.The test against NZ is a matter of timing,as two tests against NZ are supposedly planned every year.Plus the extra test ,provides additional monies to the NZRL.

2011-10-12T06:21:09+00:00

Mark P

Guest


The economics of this argument is completely ludicrous! The players get paid FROM the NRL FROM the TV Rights.....for this many teams, you'd need a TV deal of $300m, per year to cover a ridiculous amount of games...no network would 1) pay for Division '3' coverage 2) the costs of covering so many games IF the TV rights gets $1bn (which it most likely won't) for 16 teams over 5 years, the MAXIMUM a governing body has to pay is $12.5m assuming zero dollars go into grassroots or any other areas of the game. What is 'other revenue' for the NRL then? Clubs keep the gate takings, only the finals series do the NRL host. The heart is right, but no understanding at all has gone into this....

2011-10-12T03:26:28+00:00

Jaceman

Guest


CC You missed my point that Gallop has lots of bids (some of which would struggle) and the decision is difficult as the current clubs dont want new entrants (except perth maybe because that wont harm their patch) and he has already said that it wont be tiull 2015 probably so it is a problem of sorts. I was pointing out the competition aspects of the NRL delaying the draw which they are entilted to do - I just want to (as you do) show that your code (you dont seem to follow other codes) plays hardball as well...The AFL has said late October for theirs but the NRL appears to be silent or is this another IC issue. BTW why is there a NZ test this Sunday?? Its not 4 nations..

2011-10-11T21:47:22+00:00

Crosscoder

Roar Guru


jaceman. Gallop is having so much trouble,that he has 7 bids awaiting him on his desk.Nice load of expansionary trouble to be in . BTW its called competition,and trying to maximise a code's income.Clubs have to submit preferences ,monday night football(has to be talken into account-not an AFL problem,SOO timing and tests)and the Tv stations with their nominations ,.The admin can't please everyone that is why it takes so long,and if there so happens to be competition against GWS ,that is free enterprise life. Another point you miss,is the season ATM is not programmed fully in advance,as far as the NRL clubs are concerned.Clubs have 5 week blocks on which to work,which does liitle toencourage memberships . Programming an NRL match against a new AFL team,is no different than poaching a high profile NRL player and using his profile to openly and yes blatantly promote the new team in a non heartland area,and telling the world you are spending $20m pa in so doing.One has to look at both sides of the equation.Competition keeps the participants on their toes.

2011-10-11T06:53:57+00:00

Jaceman

Guest


Jimbo One extra AFL team in western Sydney is hardly going to kill League - there are 10 ? NRL teams in Sydney. The interesting question is when are the NRL going to release their 2012 draw - last year they did it in GF week - perhaps they are waiting for the AFL who will release theirs in late October. !'ll wager that the GC or a western Sydney team get to play manly in the first round after Manly probably travel to England 2 weeks beforee the season starts to play Leeds...GC got St George first up this year 10 days after the saints had arrived back from England...

2011-10-11T03:22:38+00:00

Jaceman

Guest


As has been said by others the economics in a small country like Oz with 4 mainline football codes it just wouldnt work . Gallop is having enough trouble getting 2 new teams in..

2011-10-10T23:29:44+00:00

turbodewd

Guest


I guarantee the Central Coast will not get an NRL team while there are already 11 teams in NSW/ACT. It would be insanity considering its just 45min from northern Sydney and not far from Newcastle AND its a small place. Gosford is tiny!

2011-10-10T13:00:29+00:00

Jimbo

Guest


It would be crazy wrong to cut the Sharks. They have a huge junior-base, & (potentially) will be financially viable again soon. Financial problems aren't confined to the Sharks alone. But, the problem is AFL. They are being aggressive in their intentions for killing off league, & are amazingly cashed-up. The argument that "the 10 year old fan today will switch to another team next year" might be true ... but the 10yr old fan could very well support an AFL team. The NRL should not dismiss this. Every effort should be made to expand the code .. sure ... but it really shouldn't be at the expense of the traditional clubs.

2011-10-09T04:21:41+00:00

Steven Robertson

Guest


BJT, It is easy for me to support AFL or Soccer because I enjoy all sports, can't say union is right there, but I can't wait to watch this afternoons OZ Vs S/Africa just the same. You blokes in Q'land have got to get your head out of the sand, yes Brisbane get great crowds.......only one bloody team though....the thing is there is as many people who hate Brisbane as there is supports Brisbane which also helps the crowd numbers, I've frequently visit my relo's in Brisbane (Redlands District) and the reason the Brisbane supporters have got theirs heads in the sand is your Courier Mail rugby league sports section is 95% Brisbane and all one eyed rubbish dished up and you lot take what ever garbage they dish you up as gospel.....unfortunately the Joh!!!!! era has left you lot think you are the only one's that matter.......the NRL covers a wide area and 16 teams at present, you are not the only one's in the competition they have to worry about...as for you sitting up there in Q'land telling the NRL to remove this club or that club from the NRL, how would you feel if you happen to be a supporter of this club for the last 50 years. You obviously know no nothing about tradition or loyalty, which shows by being once a Panther and now a Bronco...cheers.

2011-10-08T20:11:24+00:00

Professor Rosseforp

Guest


Central Coast Centurions??!! Who came up with that ridiculous name??

2011-10-07T21:07:31+00:00

Xman

Guest


Melbourne love sport. We all know that. The NRL GF and storm pf rated well for one reason: they weren't televised against a more popular sport in the AFL. You only need to look at the low ratings for the storm games that did go head to head with AFL games this year to see this is true. So if the NRL is shown regularly in Melbourne, including non storm games, the majority of them will be directly against a FTA and/or payTV AFL game, and the ratings for the NRL will be atrocious. Chanel 9 know this. That's why they refuse to show the NRL into Melbourne, except for special circumstances like just mentioned.

More Comments on The Roar

Read more at The Roar