Rugby league in Australia faces an unprecedented challenge as the financial implications of an unfinished 2020 season due to the coronavirus.
The NRL admitted on Monday it will need to slash its own costs by 70 per cent over the second half of the season so as to fulfil its funding commitments to both clubs and players.
This fragile financial state has seen HQ reduce its spend from $76 million to run its administration and operating costs for the first half of the financial year down to just over $20 million for the second half.
These cuts led to a 95 per cent reduction in staffing levels, as well as a 25 per cent cut in executive salaries.
The latest NRL financial report highlighted the unsustainable nature of the administration and operating costs, which ballooned out to $181 million a year, equating to about $493,000 every day.
Todd Greenberg and Peter V’landys speak to the media at Rugby League Central. (Photo by Matt King/Getty Images)
In the space of two weeks, rugby league has become a raft of stakeholders wanting money that does not exist and blaming each other for the dire financial state the game finds itself in.
Clubs have been left with a distinct lack of confidence in head office, as many face an uncertain future through their different ownership and management structures.
Players are also looking at significant pay cuts to help the survival of the game during this time but much of this will pale into insignificance in comparison to the pain experienced by the majority of Australians.
The next few months will provide time for the NRL to take stock and consider how austerity can bring improvement to a product facing an unclear future.
The capitalist society which has been allowed to fester through decades of greed is showcased through the microcosm of sport and the NRL specifically, which has been propped up by government grants and the public purse.
Fragility and economic uncertainty is what rugby league is now facing, as the best of sport – rather than residing in money – actually exists through people.
People and communities are the foundation of sport. The NRL’s roots lie in the working-class suburbs, which is still represented through its 16 clubs.
Whether this is a sustainable model only time will tell, but one thing is becoming apparent, as journalist Malcolm Knox surmised, “Outrageous wealth in sport wasn’t a permanent state, it was a moment in time.”
Professional athlete is still a relatively new term in Australia’s football codes, which only exploded 25 years ago with the rise of pay television – and these lucrative broadcast deals will need to be renegotiated and scaled back.
The return of part-time sportsman with real jobs is maybe what is needed in a society which needs to cleanse itself of this consumerist mentality. The raw talent and passion which has somewhat been lost under the sponsorship dollar and huge contracts needs to be rediscovered if the NRL or any of the codes are going to truly move forward into a brave new world.
Money evaporates but people stay on. The economic fragility of our world is been put into full focus through this virus as governments struggle to balance the economic loss with the human loss. Our disconnection from each other has needed a pandemic to make us stop and consider what is important.
The NRL’s belief that they were doing something good for morale by playing on through the crisis was driven by self-interest and the economic benefits of television money.
Whatever last dollars the NRL was hoping to squeeze out of their broadcasters was lost in the goodwill of a suffering community.
The NRL must now face the reality that the game may be changed forever – if it does recover. This is not necessarily bad news though, as sport – like life – must move on and nothing is sacred to change.
As for the NRL re-emerging and forging a new legacy, the hope for that future lies in people.
Jim
Roar Rookie
The V'Landys original comments seeking support was simply all about trying on the 'lazy racing trick' of 'we need guvment support'. It works for the racing industry, so he thought it could work in this space too. Narrative has improved a lot since then.
Kafka
Guest
Mick - leave the personal comments behind and do your research by stepping back. If you can note I punctuated the match- fixing comment as a rhetorical question ... asking the reader to consider the observation. Maybe , begin by looking into the Ryan Tandy Canterbury Bulldog case of match- fixing and work forward to the present . Take care with your ‘comrade’ statements because ultimately all sport is about comradeship . It may have something to say to all of us at this present time when we find life far from our selves. Stay well dear comrade . K
Mick Gold Coast QLD
Roar Guru
You've got the whole manifesto happening comrade, with: individual & the collective are symbiotic ... but when individualism abounds as the dominant ethic because it can ... individuals can threaten the wonder and pleasure of life ... with their avarice ... then the absolute pearler: Think of the rise of match – fixing globally , including in the NRL ? ... Name three, just three "fixed" matches - the date, the teams, the ground, the scores and details of the undeniable evidence of the fix. Just three. Well?
Micko
Roar Rookie
Here, here! :thumbup:
Micko
Roar Rookie
You lose half your competition and fans that way. The AFL still heavily props up most of the Melbourne teams as well. These Sydney/Melbourne former suburban teams are not all going to be great in the professional era transition to national leagues, but the cost benefit of propping them up is better than letting them die and watching a huge chunk of disaffected supporters turn away from the game, not to mention all of that associated revenue!
TeamAustralia
Roar Rookie
"..otherwise they will switch codes." What codes??
Kafka
Guest
‘Always back self- interest , at least you know it’s trying’ - Keating’s 1990s declaration has become a limited , if not dangerous, cliche three decades on. In many ways it lies at the heart of our current context re- the novel covid - 19 virus and its impact on the so- called ‘free world’ and the capitalist vagaries of sport. The individual & the collective are symbiotic- one does not exist without the other... but when individualism abounds as the dominant ethic because it can in countries where nothing is sacred but material possessions and rampant deregulation is allowed then individuals can threaten the wonder and pleasure of life , including the joy of sport- with their avarice. Think of the rise of match - fixing globally , including in the NRL ? Such devotions towards the lower depths of human nature begin slowly & subtlety absorb a culture - call it a ‘virus’ that becomes modelled , available & normalised by the fear of missing out when good people turn their gaze away. What we allow to be cultivated in sport or life is who we become ... the Australian values Morrison keeps calling forward that play themselves out at supermarkets , property investments and in the share market; places of engagement that have increasingly become spiritless wastelands where self - interest is all you back . Let’ hope ‘Changes’ are in the air not only in sport but world with less inequity and entitlement. Maybe the absence of adverse life events does not create the ideal conditions for human development. Sportspeople coddled their coaches, fed special diets, protected from anything that might cause upset and affect their performance, taught to think of nothing else but their sporting future now finding themselves in the bell chamber of a pandemic dissolving all cultural/ monetary comforts may lack all inner resources - what we may call resilience. May also apply to us as a nation with our fabricated national narrative that omits the shame of our colonial past and has been predominantly been cushioned from the realities by three decades of endless growth . Now we are in self-prescribed detention & our sense of entitlement affronted. K
GoGWS
Roar Guru
Rugby League clubs, more than football clubs in the other codes, perennially rely on gaming revenue from pokies to the tune of millions of dollars each year. What happens when the ban is lifted? Will all the old punters flood back in as if nothing has happened? Very unlikely. Many will be out of work or on reduced incomes so they won’t be able to afford to gamble, or not at the same level. Others might simply decide not to return because the enforced period away from pokies has broken the habit. Still others might delay returning because they remain concerned about their health and are worried about sitting in enclosed room full of dozens of strangers who could have the virus. When an overall and complete assessment of the rugby league’s financial health Is undertaken, you’d expect future pokies revenue is going to be discounted heavily for those clubs that rely on them. Pokies revenue is now far less reliable as a source of income. You can’t just flick the switch and expect it all to go back to how it was.
Rellum
Roar Guru
Personally I don't care if the corporate part of the game survives or not. I am quite happy to back to watching amateur players running around as professionals. I don't need the validation of others liking it to make it worth while.
Walter White
Guest
Clubs are the epitome of badly run, shoddily structured social organisations that are driven more by emotion than the need to make a dollar. Many of them are run more like a charity than anything else. Many of these structures are a legacy throw back to when these clubs first came into existence. Nothing will make clubs face up to harsh economic realities than losing money year in year out. More cash from the NRL results in more wastage and a lack of accountability. As for the NRL, they should be investing in the future, marketing, digital content, memberships, grass roots all of those things. Clubs should have to stand alone and survival of the fittest
jamesb
Roar Guru
Oh well, each to their own. You have your view, I have mine. With regards to my initial two posts, I would prefer the NRL to be in comparison with other sports, instead of companies from a different industry. Why? Because they can learn something from them. An example was a comment from AG074 below where he stated that the NRL could learn from the NFL in the digital space. And with regards to expenses, you got to make sure that those expenses are justified otherwise it's just a complete waste of money.
mushi
Roar Guru
Greed, for lack of a better word, is good
mushi
Roar Guru
FYI for the NBA 2012 revenue was ~US$3.2bn in 2012 and last year player salaries alone were US$3.6bn
mushi
Roar Guru
Well then do that, but don’t base any conclusion on comparing one expense line to a revenue line for periods 7 or 8 years removed. That was actually a learning experience for me, I’ve seen some really really bad financial analysis but that is the worst; there’s just no logical link between the two data points presented and your conclusion when we know revenue went up over that period.
Andrew
Guest
We all know the argument of players need to be paid or they will jump ship to another code eetc.. But players also need to be paid well to drive the perception that the game is strong and that it has a prodcut that is of great quality so that people (from sponsors to ticket buyers) invest in it. If you go back to low salaries or as suggested, part time players, the interest in the game dries up very quickly - especially when there are other sports (predominantly over seas) that will see minimal impact from this virus because the owners are very wealthy so the game roles on with its elite, well paid athletes, surrounded by high quality branding and promotion.
LeftRight
Guest
I think greed/self interest will prevail. As Paul Keating said, "Always back self interest, at least you know it's trying." The large salaries of players, coaches and administrators won't be easily foregone. Who how this will be achieved? Broadcasters and sponsors will probably take the opportunity to cut their expenditures. Will the NRL (and other codes) be bought out by wealthy individuals & cartels, and would the NRL (for example) entertain such approaches to get cash quickly? Has not a Storm executive brokered some sort of deal with venture capitalists, & Twiggy Forrest offered a rescue package to Rugby Australia. All such "shining knights" would offer rescue packages with a view to making massive profits. Don't forget, one person's profit is another person's loss. Interesting time ahead for many sporting codes I think, & there will be plenty of critical decisions to be made pretty much on the run.
Nat
Roar Guru
I can respect that the salaries of some players is a good chunk of coin but let's not go calling them greedy. Through the RLPA they fought for higher percentage of the revenue the NRL was receiving and with that wanted to become a 'partner' within the game. The NRL were able to put together a product worthy of a $1.8b investment by the broadcasters. If the investment in the game has gone up why shouldn't the players ask that their % goes up with it? They now know that the partnership has a downward spiral as well. If nothing else, the NRL's money management will have a greater spotlight and a greater ability to say no to clubs but if the game can afford the increases, the clubs are well entitled to ask.
jamesb
Roar Guru
Probably prefer comparing the NRL to another sports governing body than a multinational conglomerate.
mushi
Roar Guru
What's the revenue change though? Comparing revenue from 8 years back to expenses today is the metaphorical apples and oranges. Eg Alphabet had revenue of 46bn in 2012 and has pre interest expenses of 126bn today. Did something go triply wrong for them in the same period? You need to look at the margins if you're comparing those two figures for the NRL
Big Daddy
Guest
Walter, of the $181 million , $20 million does go to the NSWRL and QRL. Not that it impacts on the overall picture but it surely does ask the question on where the money goes. The other point that people miss is there is still a lot of sponsorship money from Telstra and Harvey Norman on top of the $181 million. It's the little things that add up like Cam Smith's wife ring and flying CEO s around the country for club conference's with first class accommodation and airfares. Wanton waste in a lot of areas . That's where the transparency needs to be.