Clubs can’t blame the NRL for their financial mismanagement

James, agree 100% on the $3 million. No way in the world should be subsidising any ancillary staff. The NRL clubs are really mixed bag of private ownership and some clubs heavily financed by league's clubs. Unfortunately not all these clubs make big profits and some are making losses particularly 2 or 3 in the western corridor. This Coronavirus situation will weed out the strong and the weak and I hate to say it some may not be viable. They can't come running to the NRL for handouts so buy outs and relocation is not out of the question. Most clubs will scrape through 2020 okay but I would be concentrating on 2021 for some.

Hi Jamesb, Many thanks for the above. I find the Fox situation confusing. Original commitment. $190 M Reduced to. ($25M) $165 M Now further reduced to. ($28M) $137M Would appreciate any clarity you could bring to this problem and other data to present a schedule as you have done for CH9 which is the best explanation I have seen on this vital issue.

Morning James Having gone through Mr Ikins article I too have some thoughts. A leagues club has far more going on than just the footy side of the operation. I noted some of the comments above talking about head shoelace purchasers etc, but you have to remember the clubs have more on their payroll. Management staff, bar staff, cleaners etc. Leagues clubs, and big leagues clubs particularly employ a lot of people. Pay 100 people $50,000 per year to work in a club and that is $5M right there. The Sharks indeed made a loss for 2018 and 2019, but this doesn't tell the full picture of the health of the club. Simply quoting those numbers make for great headlines, but ignore the $17.5M in cash and other current assets, a very low debt to asset ratio and ongoing development. Some companies will absorb losses whilst expanding, and the Sharks have a lot going on. This is obviously not sustainable, no company can lose money forever and survive. It is also interesting to note that the Storm were heavily subsidised by New LTD for their first 15 seasons, never once making a profit, and are still not fully financially viable (willing to be corrected, my last look at the Storm was 2018). This was the cost of putting a team in Melbourne, would you consider that money wasted? Any club could do with some streamlining, and certainly with less old boys and more business individuals running the show. I would argue that fans of the club should not be employed by it, that takes all emotion out of the equation. I am a big fan of the capitalist model, and the NRL should employ it across the board, as they have threatened to do. The NRL club remains in the comp so long as they can cover their running costs, with the NRL providing the salary for playing staff only. The NRL has certainly been wasting money, few could argue that. Mr Ikin having a rant based on snippets of information doesn't help anyones cause.

To those who think clubs should get a bigger piece of the pie and only pay an administrative fee to the nrl, well research some country divisions. All those years ago when I left Wollongong there were 3 main clubs in what I remember was a 10 team comp. . The profits of doom even in those days said the 3 big clubs should contribute more so the other clubs could not just survive but win an odd comp and keep their juniours on the field or the comp would implode. From what I can see now they were right, one of the big 3 are now playing in group 7, St George Illawarra bought into a group 7 club and had it promoted to Illawarra, every report I get from family and friends living in the area tell me the junior leagues are struggling ,interest in the Illawarra comp is limited and NRL quality players are just not there anymore. Meanwhile the big 3 clubs have shrunk to the big 2, or maybe we can count Shellharbour as part of the new big 3 after the St George Illawarra take over. Yeh, let's give the NRL clubs more power and a greater portion of the money ,I wouldn't mind watching a 4 team comp.

This is really good article James. Simple and to the point and not overly complicated so an average supporter like me can absorb an think about what you’ve written. Thanks James

hi James, I have no issues with how the Clubs run themselves and would not presume to tell them whether they're too top heavy or should trim training staff, etc. That said, your point about the Club's financial mismanagement needs to be addressed for sure. My concern is not the outgoings, lets just ignore those for a sec, but focus on the lack of income sources for many of the Clubs. You suggested now was a great time for the Clubs to reset, but I suggest they need to get this income streams sorted first and foremost. That way, if the think they need 50 staff to train 20 odd players, they've got the dough to pay for it. I'm sure the NRL will be cutting back it's overheads, mostly because their main revenue stream will be reduced. The broadcasters have made it pretty clear they won't be paying the ridiculous sums they were previously, which should mean a reduction in the amounts going to the Clubs. I'd also suggest they'd be looking at establishing a rainy day fund as a matter of urgency, given the current situation. I've got no issues with the salary cap staying at say $11 million, with say $8.5 of that coming from the NRL, but the Clubs need to stump the rest. If they can only come up with another 500,000, they run with a budget of $9 million. No going back to the NRL, no whinging about it, they either learn to live within their means or they fold.

Spot on. I know I'm being silly, but with that many staff, there must be a shoelace purchaser, clipboard maintenance worker and a person to recharge all the lap tops.

I read this morning that some clubs have up to 50 people on their training staff. What the hell are they all doing? Must be a lot of hangers-on. No wonder clubs are overspending to the almost-broke stage. The NRL has ordered a cutback to 20 people; would have thought that was even excessive.

The NRL is often run by people unqualified to run a multi-million dollar business, hence the current financial situation the game is in. Put the whole of the NRL office on two year contracts, if they perform their contracts get renewed, if not they're out. As for Internationals and Origins, where do the players come from? The clubs......clubs should be getting way more money than they're currently getting

As has been noted many times, pandemics just expose the cracks in society - and sport is no exception. The day of reckoning was always going to appear. COVID-19 just brought it forward a bit. Sport has occupied a hallowed place in Australian society. Whilst science, the arts, even health have had cutbacks, sports of all colours have maintained their ability to be the recipients of both government and private largesse. Well - it is over. Cricket will do fine, maybe even RU as they both have an international presence. FFA, well who knows. RL will struggle on as it always does. AFL, well, it may well be a diminished sport after this. No international presence, owning a massive white elephant of a stadium, will certainly put the brakes on the free spending days.

The problem is that clubs are often run by people distinctly unqualified to run a multi-million dollar business. They are often run more on emotion and place great importance on history than they do on Profitability and the Balance Sheet. They are members of a cosy little club called the NRL that looks after them and covers up their mistakes. If clubs were to take over the funding and simply dole out money to the NRL to do admin stuff then they would need to lose their protected species status. They would each become separate financial entities that survive or not on their own merit. As for the future or internationals or maybe even Origin, well how much money does that put in club coffers ?

No, the NRL would control the game, but the clubs give the NRL a grant for doing so.

Interesting article in the NZ media today claims that CH9 is claiming a 24% reduction in fees for this year and wants to pay less going forward. In addition to not paying for games we will not have played this year, it does not want to pay for any games that are played after the original schedule (but presumably it does want to broadcast them). It also believes that it should have a massive reduction on Origin as that is now being played in November when it gets lower advertising revenues and the clash with the cricket. I am not sure whether I can mention the source on here and don't want to get moderated again but all credit to them for the article. It is reported that Fox is prepared to pretty much pay in full for any games it broadcasts Good old Channel 9, the home of Rugby League, where ever would we be without you ?

The whole idea of the NRL giving clubs grants is BS, it should be the clubs giving the NRL a grant. It's the clubs who generate all the money in the game, nobody buys a foxtel subscription because of the NRL, they buy it to watch their club play. The NRL made $30M profit in 2019, at least $1M should have gone to every team in the comp.

Spending by the NRL and clubs is replicating the ridiculous spending by society these days. It's ludicrous and risky but not many go against the herd. The boss of Rex airlines was on the radio the other day explaining how they expanded slowly using profits to buy new planes and buildings and have no debt. The NRL and clubs are possibly equally as bad as each other and maybe they should get this bloke from Rex on the line.