The potential demise of the Otago Rugby Union (ORU), which has existed for 126 years, displays the dark side of modern sports. Namely, money, and the pride that comes with it.
Rising player salaries, increased stadium costs and dwindling crowd numbers are all impacting heavily on well founded and seemingly knowledgeable clubs worldwide.
In the instance of the ORU it was ill-advised decisions regarding player salaries and the worth of their obsolete stadium, The House of Pain. You could blame them for over-paying players, but is that not the price of success in the modern era?
The pressure placed on a modern team in a world dominated by media, advertising and corporate sponsorship is enormous. Results speak louder than words, tradition, history or legend.
Sponsors rarely want to be associated with teams that cannot win, or attract decent crowds and TV coverage. If they choose to sign with these teams, they will rake you over the coals before they part with cash.
This plague is not limited to small unions or sports with a limited audience. Manchester United, the most recognisable brand in world sport, currently carries a debt of 439 million pounds. This is a decrease from 508 million pounds 12 months ago.
While Man U are still afloat, other teams have spontaneously combusted in spectacular fashion to find themselves toiling away in the dark depths of English football’s divisional levels.
Portsmouth and Leeds United were the most prominent of these. After Portsmouth won the FA Cup in 2008 there were rumours that they had spent 120 percent of their turnover on player salaries. Greek politicians must have given them a standing ovation.
It is unclear whether this was a case of pure greed or that the club felt the pressure to purchase high-profile players to help them perform in Europe, become a dominant force in the EPL, or satisfy fans.
Leeds United took out substantial loans based on the assumption that if they paid Robbie Fowler and Seth Johnson large sums they would continue to make it to the UEFA Champions League by finishing in the top four in the EPL. They would then be able to repay these loans with their share of European TV money… uh oh.
They finished fifth that year and the faecal matter hit the fan in extraordinary fashion. They had to sell top players to help repay the loan. First Rio Ferdinand, closely followed by Lee Bowyer, Nigel Martyn, Fowler, Robbie Keane and Harry Kewell, while he could still stay on a pitch for 90 minutes.
Very quickly they were relegated, and while the administrators were left out of it, the club still fell into a financial black hole and has never recovered. The costs and risks associated with success in the EPL are astounding.
This unbridled spending often results in the teams which are owned by billionaires, or who are willing to bankrupt their organisation for success, winning titles. This seems to detract from the whole point of sport.
Sport should be the perfect contest between athleticism and intelligence, rather than who has the biggest bank balance and wants to take the biggest financial risk. It should be the performance as a whole, from the front office to the players on the pitch, working as a team, which decides results.
The price of success has seen teams forced to merge, most notably in the National Rugby League. The Northern Bears have now been swallowed by the Manly Sea Eagles. Saint George and Illawarra teamed up and the Wests Tigers are made up of Western Suburbs and Balmain.
All of these clubs survived as singular entities, however once player salaries increased with the introduction of professionalism, they couldn’t cope.
The National Basketball Association (NBA) also has its own issues. The Association has had to take control of the New Orleans Hornets just to keep it afloat. This is the result of over-expansion in the quest to make some quick money in the hope to secure a larger market share of sporting viewers, thus making their league more successful.
The AFL is doing this right now. It has infiltrated previously uncharted territory on the Gold Coast and Western Sydney in an attempt to become the most powerful sporting code in Australia. This may have backfired as only 700 spectators turned up to see GWS play the Gold Coast.
They have neglected the fact that teams such as North Melbourne can barely pay their stadium costs every match because of a lack of crowd attendance. Surely the league should be secure before expansion occurs.
Not every league in the world is going to have a salary cap or have stringent financial controls. But isn’t there a serious issue here? Is the cost of success becoming so large that we could end up with a sporting version of the global financial crisis?
I feel like this is something which we should concern ourselves with. I am not proposing we go back to amateur days, with the lifelong injuries these players endure. Modern players deserve to be paid and have this as full time employment for a brief period in their lives.
After all, they are the modern day gladiators who fulfill our bloodlust in a socially acceptable way.
If the powers that be continue to ignore this alarming issue then I am confident in predicting catastrophic failures like what we are seeing at Otago become the norm rather than the exception.
The Mayan people predicted that 2012 would be the end of the world. Maybe we won’t have time to watch ourselves destroy the sporting universe.
Vanilla Gorilla
Roar Pro
haha yeah i did realise that mate, it was just a poke at the rediculous nature of the paranoia associated with it. I imagine the poor blokes that made this epic calender would have got sick of it or died of old age
Go_the_Wannabe's
Guest
Mayan long count calendar finishes in 2012 and then another round begins. They also had a short count calendar for more practical use. Just thought you'd like to know.
Ian Whitchurch
Guest
Markus, Port's financial issues are solely and wholly because the SANFL bleed them dry to support the next layer down. If you want the exact equivalent, pull $3m a year out of the Waratahs to pay a dividend to each of the Shute Shield clubs. That said, the AFL is in Port's corner, and the move to Adelaide Oval rather than the SANFL-owned Football Park will help.
Markus
Guest
Agreed. It is fairly pathetic that the most exciting and unpredictable part of the English Premier League is the relegation battle. Even more pathetic that most of the EPL fans I know only care about individual local derby results as opposed to end of season standings, as they know the League title is all but a foregone conclusion.
nickoldschool
Roar Guru
Interesting article VG. Salary caps and drafts are not the answer to everything going bad in sport. Look at the Titans, Raiders etc in the NRL. They are struggling financially too.Same in AFL with Port Adelaide and others... Like Manoa suggested earlier, we need more regulations by governing bodies, more audits etc. What happened to Leeds, Pompey or QPR now is their own fault: owners invested money they didnt have hoping that buying top players would mean a top 4 finish, hence a lucrative champions league berth. Wrong call, they didnt make it and it was all over before it even started. If Man U or any other top teams does not qualify 2-3 years in a row, they will be in deep sh**e too. Union here could go better if clubs and players alike were offering a good show week in week out. Its not happening yet, thats why you get 14000 ppl to pay to watch a game in Sydney. Its an attitude and philosophical problem. they dont care enough about their club and supporters. There is no relegation in SR, they will be here next year even if they finish last!!!: why not give it all, play expensive rugby and see what happens instead of playing a narrow minded brand of rugby which doesn work anyway.
kingplaymaker
Roar Guru
VG there are two issues here: players to fill the franchises and crowds to watch them, which are different. I've written various articles on this subject and the most recent mentions it. Basically rugby loses scores of teenagers to league in NSW and QLD because it can't offer them enough contracts and new teams would be able to so there would be enough players in those states. As for new areas, i.e. non-traditional rugby areas such as South Australia, it would take much longer for players to appear as it has done in Perth and Melbourne. This doesn't mean the last two are flops: they have succeeded in getting crowds. It will take time as the areas are new to produce its own players. They are long-term investments to grow the game in their areas and as long as they get enough crowds, then fine. When founding a new team, the players can be league converts or foreign imports, it doesn't matter as all that's important is having a team to grow the game. The area once the game has grown will produce its own players. But first there needs to be the team. What I mean by the Waratahs not playing attractive rugby is not the playing quality they have, but the crazy decision to play a kicking style of rugby that turns off the fans (as well as making them lose).
Vanilla Gorilla
Roar Pro
Guys and girls this has been some enjoyable banter, you have all destracted me from work for a fair portion of my day. Check out Sportspolygamy.com if you want to get involved in our podcasts and offer your oppinions
Vanilla Gorilla
Roar Pro
KP this supports my argument. Whats to say that by adding another team they will suddenly play attractive rugby. Simply put the last 2 expansion franchises in Super 15 have been flops. The Force and the rebels have been relatively unsuccessful. However the Rebels have a promising future. I hold little hope for the Force, there seems to be something fundamentally wrong with them
sheek
Guest
Look at the EPL premiers - MU, MU, MU, Chelsea, MU, MU, MU, Arsenal, MU, MU, MU, etc..... In the past 20 years Man Utd, Chelsea & Arsenal have won 19 out of 20 (I think) with Man Utd winning the lion's share. I honestly don't know how football fans can think this is a good thing. In Italy, it's Milan - Inter, AC, Inter, AC, etc. But maybe occasionally someone else. In Spain, it's Barcelona winning 3 to Real Madrid's one every 4 years, & forget the rest. Okay, maybe a bit of exaggeration, but how can this be healthy, when the few keep winning all the time, because they can buy the best players? Anyway, I don't care what the European football comps do, I care about what rugby union does.....
Vanilla Gorilla
Roar Pro
Sheek i think you commented on my trade and salary cap piece in the super 15 a while ago. I agree that salary caps and drafts increase security. Sadly in competitions like the EPL and Champions league it will never happen. I couldnt see the countries agreeing on salaray caps and if one was to set the bar and put in a self imposed salary cap they would be disadvantaging themselves significantly. Sadly there is an easy fix to the situation but the issue is that humans are very adverse to change.
Markus
Guest
Primarily people who had travelled from interstate or overseas (to support other teams) purely for the Sevens. I did befriend a group of Kiwis who were now living in South Australia and big Super Rugby followers, but nowhere near enough to setup a consistent fanbase. Plus they all went for NZ teams anyway.
kingplaymaker
Roar Guru
VG the Waratahs don't get crowds because they play boring rugby and lose, not because there aren't enough fans. The same was the case with QLD until they started to play attractively and win and look how many fans they have now. Sydney could quite possibly support several teams if they played running rugby and won enough: it is 4.5 million and the biggest rugby heartland in Australia.
Vanilla Gorilla
Roar Pro
It is indeed, which is why i stated below that there shouldnt be another Sydney team in the super 15 below. In regards to your statement that the numbers would be lower because it is in the country. Im not saying the AFL should panic Im simply saying i would have expected bigger numbers given they are deprived of AFL action. Also being in the country is no excuse. Lambeau field is 72,000 with a area population of 104,000 and sell it out regularly and get near capacity for pre-season. There is no need for panic but im not sure Sydney can support two teams. Look what has happened in Adelaide which is a city purely concerned with AFL. Adelaide, considered the metropolitan team gets a majority of the support while the Port Adelaide Power, considered the workers man team struggles and continually needs to be bailed out.
Matt_S
Roar Pro
Interesting article. While rugby league clubs have their financial issues the sport has been dogged about the salary cap. While league has been seen of late as a sport to pick off (players, coaches etc), the sport's two biggest comps-NRL & ESL don't have the debt levels (keep in mind the Titans issues are separate from the football entity) of some of their rival sports. In fact the ESL have withstood largely the economic crisis and have seen clubs move into new stadiums (without govt funding), excellent community programs, solid season ticket holders, just renewed new 5 year BBC tv contract on the back of 70-80% rise in tv audiences on Sky. Sometimes league's Achilles (lack of friends in high places to secure blue chip sponsors) has seen the sport see little affect of sponsors garnered largely locally, withstand current economic climate. I've always advocated the sport not react to the loss of players like Gasnier, SBW etc because we have a knack of replacing them. Our game, from top to bottom have a great development arm.
kingplaymaker
Roar Guru
Markus then you were the fans at the rugby sevens? NSW and QLDs who live in SA I imagine, and that would already provide a base for a team.
Markus
Guest
I think you're right about South Australlia and sport. I went to the last ever Rugby Sevens carnival there, and I'm confident not a single person in attendance was actually from Adelaide. And despite SA's strong Aussie Rules history, even Port Adelaide are in pretty serious financial difficulty.
Markus
Guest
They had to give up on it, the APC as it stood was a financial black hole. The only team that didn't post substantial losses was the Canberra Vikings. And I don't know about other teams, but in Canberra the scheduling was a joke. The Vikings' last match of the round robin was scheduled at the same time as the ACTRU finals (in which the Tuggeranong Vikings were strongly represented, no less) but on the other side of town. It may be more viable this time around. The Force are more established now than 5 years ago, and the Rebels would be an actual team with structures in place this time, as opposed to a purely artificial construct. But I suspect the Sydney clubs will do their utmost to rout the establishment of any such competition, as they did last time. They won't even support a simple club championship, where the three premiers of the Brisbane, Canberra and Sydney comps play off against each other, even after the ACTRU offered to fund it. 100 years of tradition mean squat if they are the very thing holding back the development of 100 more.
kingplaymaker
Roar Guru
VG 1.7 million is such a huge population I think with regular elite rugby there would be a decent regular Super crowd, as there has been in Perth and Melbourne. Everyone in Australia has an awareness of rugby through the Wallabies and to a lesser extent Super rugby. Sydney in general although dominated by league is also rugby's main city, so more teams could be supported easily. BOP would be taken from the Waikato area and would get crowds on the basis of its own identity, not Waikato's. the second Brisbane team would be a long way down the list I gave, probably last place. There would be at least another 6 Super teams before it got to that. There would be more players almost immediately once there were more teams as so many get lost to league as teenagers for want of teams to play for, and some don't get a chance anyway with so few teams. Nothing against adding teams in other countries, but there should be more in the main countries themselves too.
sheek
Guest
When rugby became professional in 1995-96, every club (provincial, regional, district, city, premier) thought they could immediately become a Man Utd, or Chelsea, or Barcelona, or (either) Milan, or whoever. I reckon rugby has really screwed itself in many ways. The players, coaches & administrators went from worrying about the erosion of the "ethos" of rugby, to dismantling that same "ethos" as quickly as they could. Everyone had their hand in the trough. Everyone in rugby has simply been far too greedy. The game has been collectively living beyond its means for 15 years, & now is possibly facing the dreaded "rationalisation". Tahs hooker Tatafu Polota-Nau may well say he doesn't care what the fans think. But he will when we stop attending live games, or renewing our Pay-TV subs, or buying our kids multiple replica jerseys. Because ultimately it's us, the fans, who pay the players & coaches wages. And at present the rugby they are delivering us, especially here in Australia, is unacceptable. And that's being kind. And guys, get the stars out of your eyes, & forget about developing rugby to every outpost on the planet, the moon & beyond. We can't even get it right with what we have at present, without worrying about expansion. I agree with Ian Whitechurch. Ask the guys in AFL, the Melbourne or Adelaide kid drafted to GWS Giants, & they'll tell you "living the dream" beats being taken away for your home town. You want to play in the best comp your sport can offer you in your own country, then be willing to travel. Make a name for yourself, then you can work your way back home. Chris Judd did this. A Melbourne boy, he went west to the West Coast Eagles for about 6 years. He became the best player in the AFL, then was able to negotiate the best deal for himself to return to his home town of Melbourne. This is how you do it. Other players move interstate, then find they like their new digs, & remain there for the whole of their career, like many Swans players. Frankly, I don't give a stuff about "restraint of trade". As Ian says, if you want a stable, viable comp, you need both a draft & salary cap. That's the truth of it. And pay the players & coaches on entertainment value. Entertainment value is the ability of players & coaches to attract more fans to the game, both live attendances & via TV, attract more sponsors, more TV viewership, more advertising, & eventually more players to the game. Basically, bring in more revenue streams. That is their "real" value.
Ian Whitchurch
Guest
Rest assured the unprofessional rabble that are rugby union administrators in Australia will never do any of the things needed to grow their code. The AFL has created a second tier club competition spanning the ACT, Sydney, Brisbane and Darwin, while rugby union cannot.