Private ownership in Australian sport

By Nick Hornby-Howell / Roar Rookie

With Russell Crowe due to leave the Rabbitohs at the end of the 2013 season, fans are left wondering whether private ownership of sporting clubs really is a positive thing.

After all, Nathan Tinkler and his Hunter Sports Group have given Knights and Jets fans cause for concern, with his very public cash flow troubles.

Crowe and Holmes a Court took over what was a struggling football club in 2006 and in six years have turned the club into a powerhouse. However, what happens to the red and green after next season?

While George Piggins is over-reacting when he rants the club will be taken to Perth or the Central Coast, the reality is there are very few people within Australia who have both the means and the passion for rugby league to own a club.

Savvy business operators have the expectation that when they purchase a company, they will turn a profit. The reality is, ownership of a sporting club can be likened to piling up money and burning it. Just ask Tinkler.

The public are often sceptical of how private owners will affect the club, think the Glazers and Manchester United, and often they are proven correct.

Clive Palmer single-handedly ran Gold Coast United into the ground when he declared football to be a “hopeless game. Rugby league’s a much better game.”

Crowe and Holmes a Court paid $3 million for their 75% share and it’s reasonable to suggest they wouldn’t sell for any less than that. Whether the members can afford it remains to be seen and it may be up to Souths Juniors, with their very wealthy leagues club, to pull the Rabbitohs out of this mess.

While Crowe’s positive influence cannot be debated, the question must be asked: Was the Rabbitohs’ short term success worth the future doubts?

The Crowd Says:

2012-11-24T07:56:46+00:00

Crosscoder

Roar Guru


As the saying goes, make hay whilst the sun shines.The Broncos are on just about every friday nght,hardly family friendly or membership friendly.The Lockyer factor was missing for the first time this year.All points to take into consideration.Plus the team played like busteds. Should the postion be reversed,the bandwaggon effect will no doubt come into sway. Just ask the Tahs in the ome state of the game. Crowd averages (not memberships) were not much greater. That being said good on the Reds for achieving that mark.The need for a 2nd NRL team in Brisbane is now bleeding obvious.there is a large number of rl supporters who have no affiliation or care for the Broncs in Brisvegas. Off subject to a degree,now the former Commercial Mgr of the Qld Reds (Pat Woods) ,is now the GM of the Cronulla Sharks.He might know something.

2012-11-24T07:32:08+00:00

Crosscoder

Roar Guru


Financial independence,and that includes privately owned clubs like the Broncos ,Warriors,aiming to achieve 400,000 members.Repeat including privately owned clubs. Therefore the privately owned clubs are also aiming to maximise membership.So the privately owned clubs are still part of the NRL equation. If you believe private ownership has been bad for the Broncos,the directors would have a differing opinion.In effect the clubs like the Broncos,Titans and indeed the Warriors would still have millionaire private owners.

2012-11-24T05:38:34+00:00

Greg

Guest


They arnt bigger than the reds full stop. Reds out do the broncos in membership and attendance. But oikee doesn't dwell on facts.

2012-11-24T04:48:04+00:00

kennoth

Guest


...I see the Brisbane Lions Social club just signed its 100,000 th member. WOW !

2012-11-22T03:20:08+00:00

Tigranes

Guest


oikee the Broncos crowds arent that much bigger than the Reds. Im pretty sure the biggest sporting club in Australia would be either Collingwood Magpies or the Melbourne Victory.

2012-11-21T02:26:18+00:00

Australian Rules

Guest


"The aim for 400,000 members is firstly for clubs to become financially independent." Agreed - so they don't need millionaire private owners.

2012-11-21T02:25:19+00:00

Crosscoder

Roar Guru


I am not going to respond to that Mushi.Although I did not introduce the AK BTW. Had too much of the economics rammed into me(eg Samuelson) to make my head spin (where you line them(economists_) up and never get more than a couple to agree),and are left so bleeding confused,you end up making your own decisions.

2012-11-21T02:22:07+00:00

Australian Rules

Guest


Umm...I think CC has missed the point on the last couple...

2012-11-21T02:21:21+00:00

Crosscoder

Roar Guru


If community clubs make a profit,the money is used for the club and juniors and charities.Some held for a rainy day. The alternative is to continually make a loss ,and have creditors bear the brunt. What do people want continual loss makers ,where the juniors and other associated organisations suffer,or a profitable one where long term security is guarnateed also for local businesses. If people suggest the former,then they are living in a strange world.

2012-11-21T02:04:28+00:00

JVGO

Guest


So is that what the AFL PR site says regarding funding the competition? Yeah I don't know why I wouldn't google that and just believe like you guys do. You know i always imagined things were funded by you guys AR, TC, Brewski and all the others going around at Footscray and St Kilda and Richmond games rattling tin cans labelled, 'Let's get Brisbane and Sydney another Premiership', 'Help the Tigers conquer ninth place again', and "Help Kill a Wallaby, support AFL in NSW GPS schools today'. But how wrong can you be. I need to read more PR releases and stop imaginng the worst. Actually I don't need to go to the AFL site for some AFL PR, I get more than enough already here on the Roar.

2012-11-21T02:00:12+00:00

mushi

Roar Guru


Community clubs being profitable is like when people bleat on about wanting a perpetual surplus from the government. If a community group is making a profit it means they are taking too much out of the community.

2012-11-21T01:57:36+00:00

mushi

Roar Guru


Thanks’ for the trivia titbit, yes the AK47 is reliable which was the point (well that combined with the ruthlessness of the oligarchs) because economics 101 tells us that monopolies and cartels are, all else being equal, the most reliable money making structure for the producer. So of course it is financially successful. This is why western countries that are based on freer economic policies tend to have laws disavowing the abuse of market power to control labour forces or eradicate competition. It’s the ACCC, it’s antitrust laws, it’s Nash’s Nobel memorial prize. In fact the NFL has been found to be in violation of antitrust laws in the past but unfortunately there is little punishment that can be meted out because no one is willing to sink the funds in to sustain the loss to be compensated for (particularly after the famous Trump cheque) or they reach an agreement that effectively maintains the NFL’s rights (players and referees). The NFL has effectively become an allowed cartel, I think essentially because the only real alternative for the US now is to tear it down, which also isn’t in the public’s interest. This is where we get to the crux as consumers of sport the worst possible outcome for us is to be faced with a cartel. The NFL has had back to back labour stoppages, tacitly encourages performance enhancing drugs, and the concussion saga. Not a single one of their actions is motivated by increasing the value of the product for the consumer (US) only the margin to the owners. This is why free market economics believes that open competition drives the best outcome for the consumer – which is us. And yet here, as consumers, you want to openly champion the adoption of a process which erodes your power in the market place and more than likely the value of the product. Such a gross disregard for self interest fits the text book definition of irrational behaviour in economics. The NRL operates outside of a typical market, it gets a torrent of support from legal protection of the salary cap to the funding of its production line and grass roots marketing through schools, stadiums and community groups. I’m all for capitalism but just like socialism, facism or any other ism you want to throw out there in it’s 100% unbridled form it tends to be highly damaging. The wholesale privatisation of the game would lead to a severe break in the alignment of what the rugby league communities want and what teams do.

2012-11-21T01:46:33+00:00

Crosscoder

Roar Guru


1) I am not disagreeing with the HSG model,just spelling out what is in place.You brought up the unease at Newcastle not me.. 2) Bringing Palmer into the equation is irrelevant,none of the private ownership models in the NRL are the same as Clive's.Neither the Broncos,Souths,Manly,or dare I say it the Storm.How much did he contribute to junior development? 3)You noted get some assistance under the community model.My so called "beef"is on the point of the operative word some, ie downplaying it. As to your last point .The Broncos a privately owned club is pushing the membership model as are the Storm.I point out that the Storm will be soon up for sale ,the Broncos are a franchise News wants to retain part ownership. Please explain how that is a push away from the private ownership model. In South's situation as the members retain 25% of the current ownership,they can if they so choose down the line ,if money to hand buy the lot. The aim for 400,000 members is firstly for clubs to become financially independent.That is the modus operandi of all clubs.You are suggesting in effect,that a couple of privately owned clubs are pushing away from private ownership.The instance of the Broncos shows that is not entirely correct. If hypothetically down the line all clubs were member owned and all profitable,I am more than happy .I dont believe it will happen,so private involvement is OK by me. Your see I have been involved with a community club,living week to week,nearly going down the tube on 3 occasions,threatened with relocation.It has not til the development came onboard ,been the panacea for the club's ills. Try some Koolaid maestro.

2012-11-21T01:26:51+00:00

Crosscoder

Roar Guru


I stated there are exceptions Ian.I am visiting the whole NFL model.Why do you think admin people from the NRL,AFL visit these NFL clubs to study ineptness? Are they making money? Do they have packed houses? What income does the NFL derive from TV? If the total model is rubbish,then I will be content to forage in that tip any time. It's the same to suggest all community clubs are the be all and end all in this country,.Whilst ideal if they are all profitable,they all are simply not so.To suggest otherwise is pure and utter hogwash.Ask the Sharks,Nth Melbourne,Port Adelaide,even Manly and indeed Souths.A couple very close to relocation.

2012-11-21T01:19:28+00:00

Crosscoder

Roar Guru


And Ian these Broncos owners,have no qualms in committing large fundiing amounts to junior rugby league and indeed local charities. The dividends that come out of the publicly listed company are, SFA. Any case if perchance they make a decent profit with full houses every week,so be it.They committed their capital(as risk).Risk capital is why many projects in this country, got off the ground.Don't knock it. I know of a couple of frienmds who lost their homes in ventures risking their capital.That happens to be my universe..

2012-11-21T01:13:56+00:00

Crosscoder

Roar Guru


It is financially successful on a huge basis.Coaches and admin from the NRL,AFl visit NFL clubs for pointers. The home of capitalism, expect oligarchies and monopolies.Still draws the fans and buyers in ever increasing numbers. The AK47 BTW Mushi is considered one of the most reliable,enduring piece of weaponry ever invented.Acknowledged by Nato armed foces as such.

2012-11-21T01:08:22+00:00

Crosscoder

Roar Guru


Entertainment is irrational? And that is what following a code is all about ???. It is rational to expect only one team can win a premiership. It is rational to believe your team is a one in 16 chance. Likewise as the NRL has a close competiton,it is more rational to believe so. Most rl fans I know pay their money for the season,expecting their team to firstly get into the 8 and have a chance of winning it. There are many unknowns during the season.injury,loss of form,SOO and Tests and their affect. Yes there are fans who get a season ticket just because it's a habit.But the average Joe in the street ,is a lot smarter than that. It is irrational to load a team with kids and expect them to perform and expect fans to be rational about their winning chances. it is irrational to apparently ignore tanking for many years,and expect fans to rationally follow a club I have followed a team for decades ,made just two grand finals ,lost both.At the beginning of every season I rationally look at the playing strength,the club's financial position,my committment to a team where I have seen kids become stars,the friends I go with,the entertainment I mostly get. There has been two occasions I have not purchased a season ticket,one when the club was being coached by C Anderson and a star by the name of D Peachey was given the flick. I do not bet on games,to me that is irrational.I do not vote for the same poltical party,just because my parents did,that is irrational. If my attitudes as to why, I and my friends spend our hard earned are considered irrational, then begorrah I am incapable of rational thought.Now that is dare I suggest is irrational. In summary ,yes there is irrationality, but it is not the norm.Love of a club with its traditions,players past present and future should not be considered such.

2012-11-20T22:48:50+00:00

Australian Rules

Guest


Don't let your bile get in the way of the truth JV. The AFL does not "effectively own" any club. All clubs are member-owned (this is fact not opinion) - meaning the members vote at AGMs for major club decisions and board allocations. What the AFL does do, is commit a certain amount of money to every club. The hand out is not even, however, because clubs like the Bulldogs need more help than clubs like Hawthorn. In fact, despite your drivel above, the Bulldogs, Kangaroos, Saints, Demon and Tigers all receive the most (yes, all no-hoper Melb clubs). If you do have an interest in what *actually* happens, then google "club funding and equalisation strategy - AFL". Or simply google the audited AFL Annual Report, it's all there. If you don't, then dont comment.

2012-11-20T21:07:32+00:00

mushi

Roar Guru


You didn’t prove anything you spouted incoherent gibberish with made up numbers. You actually have nothing to back your assertion that you would get 52 thousand, saying that is proof suggests you need a dictionary. So fans of Brisbane rugby league didn’t become fans of the broncos. Damn you could have fooled me during 1988. Did we airlift in a few hundred thousand people that just looked like they’d always been there? Because every man and his dog that didn’t already have an attachment to a team seemed to follow the broncos. They also followed other clubs, my brother Wynnum, myself the Diehards most at school were Souths fans. You’re making the mistake of thinking you know 5 guys that apparently don’t follow the NRL but do follow the Brisbane league and are extrapolating that out. If you get actual proof then great you’ve got a case but at this point you’ve just got a chocolate necktie

2012-11-20T20:46:21+00:00

mushi

Roar Guru


JVGO you don't think they'd run it for their own benefit first, club second and supporters a distant third?

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