FFC Mariner
Well-Known Member
'There's no blank cheque': Financial crisis crippling the NRL
http://www.livenews.com.au/Articles/2009/02/09/Theres_no_blank_cheque_Financial_crisis_crippling_the_NRL
'There's no blank cheque': Financial crisis crippling the NRL
As the Parramatta Eels battle to fend off privatisation claims, NRL supremo David Gallop has admitted the future of the code's 16 club structure is under threat.
The bitter forecast, Gallop revealed, is one the NRL has been dealing with for years - but as the worldwide financial crisis takes its toll on club's bottom lines, reality is biting.
And the truth hurts.
A Fairfax report has revealed that just 70% of leagues clubs posted a net profit in 2004. It's predicted only half that number will post a net profit in 2010.
41% of NRL clubs have labeled their financial situation as 'serious'.
The Sharks have been forced to borrow money to weather the off-season and honour salaries.
The Bulldogs are facing the very real prospect of entering the 2009 season without a major sponsor.
The salary cap will this year rise another $100,000 to $4.1 million with the NRL to increase its club grants by the same amount.
While the 'gap' between the grant and the salary cap is just a little over $500,000 - Gallop admits the costs involved in running a successful club is becoming more and more expensive - and the availability of sponsorship dollars becoming increasingly thin.
Parramatta CEO Denis Fitzgerald yesterday suggested the Eels would be open to offers of privatisation, while calling for NRL players to take a pay cut.
But Eels chairman Alan Overton has today declared he will not be accepting any offers from private investors.
"Privatisation has not been discussed at board level," Overton told Fairfax.
"The whole idea of the leagues club is to support the football club, and we will continue to support it as long as my backside sits on a seat there. These are difficult times, and we've got a few problems like everyone else out there, but we're not a poor club. Asset-wise, we're quite a wealthy club.
"What we have got to do is make sure we sort out our situation under the current circumstances, spend our money wisely and encourage our football club members to support the leagues club, which finances the football club, by coming to the leagues club more often."
But Gallop admits privatisation is an option clubs like the Eels must start exploring.
"I'm not opposed to it," Gallop explained to Alan Jones on Radio 2GB.
"I think we need to look carefully and make sure the people that are coming in are [credible].
"We all know football clubs are not places where you're looking for a profit. You're doing it out of love for your club, love for the game.
"In these times I don't think too many people are prepared to make that commitment.
"The state government poker machine tax, the impact of the smoking legislation... it put stress on a couple of years ago and it's an increasing stress."
And on players taking pay cuts?
"I dont think its time for talking about pay cuts. Its certainly a time for being sensible about growth."
Gallop insisted that no club's future is certain, but admitted the loss of any club could do irreparable damage to the game.
"It does a lot of damage certainly for the fans of the club which disappears, but I think it leads to a lot of disenchantment across the game if you lose a club.
"We've seen it happen in rugby league and it's a pretty painful thing.
"We've got a saturation of clubs across Sydney and I think that's important for us in terms of the competition we are in with other codes.
"We've got teams in important regional positions for us, so I dont think any club is expendable.
"Having said that, we cant be out there saying we've got a blank cheque, either."
But Gallop is adamant the game can survive.
"I dont think its all doom and gloom... I think rugby league can be something that people feel positive about in 2009 while they go through tough times. It can be a bit of an oasis in the desert."
You think he had his fingers crossed behind his back when he said that last comment?
http://www.livenews.com.au/Articles/2009/02/09/Theres_no_blank_cheque_Financial_crisis_crippling_the_NRL
'There's no blank cheque': Financial crisis crippling the NRL
As the Parramatta Eels battle to fend off privatisation claims, NRL supremo David Gallop has admitted the future of the code's 16 club structure is under threat.
The bitter forecast, Gallop revealed, is one the NRL has been dealing with for years - but as the worldwide financial crisis takes its toll on club's bottom lines, reality is biting.
And the truth hurts.
A Fairfax report has revealed that just 70% of leagues clubs posted a net profit in 2004. It's predicted only half that number will post a net profit in 2010.
41% of NRL clubs have labeled their financial situation as 'serious'.
The Sharks have been forced to borrow money to weather the off-season and honour salaries.
The Bulldogs are facing the very real prospect of entering the 2009 season without a major sponsor.
The salary cap will this year rise another $100,000 to $4.1 million with the NRL to increase its club grants by the same amount.
While the 'gap' between the grant and the salary cap is just a little over $500,000 - Gallop admits the costs involved in running a successful club is becoming more and more expensive - and the availability of sponsorship dollars becoming increasingly thin.
Parramatta CEO Denis Fitzgerald yesterday suggested the Eels would be open to offers of privatisation, while calling for NRL players to take a pay cut.
But Eels chairman Alan Overton has today declared he will not be accepting any offers from private investors.
"Privatisation has not been discussed at board level," Overton told Fairfax.
"The whole idea of the leagues club is to support the football club, and we will continue to support it as long as my backside sits on a seat there. These are difficult times, and we've got a few problems like everyone else out there, but we're not a poor club. Asset-wise, we're quite a wealthy club.
"What we have got to do is make sure we sort out our situation under the current circumstances, spend our money wisely and encourage our football club members to support the leagues club, which finances the football club, by coming to the leagues club more often."
But Gallop admits privatisation is an option clubs like the Eels must start exploring.
"I'm not opposed to it," Gallop explained to Alan Jones on Radio 2GB.
"I think we need to look carefully and make sure the people that are coming in are [credible].
"We all know football clubs are not places where you're looking for a profit. You're doing it out of love for your club, love for the game.
"In these times I don't think too many people are prepared to make that commitment.
"The state government poker machine tax, the impact of the smoking legislation... it put stress on a couple of years ago and it's an increasing stress."
And on players taking pay cuts?
"I dont think its time for talking about pay cuts. Its certainly a time for being sensible about growth."
Gallop insisted that no club's future is certain, but admitted the loss of any club could do irreparable damage to the game.
"It does a lot of damage certainly for the fans of the club which disappears, but I think it leads to a lot of disenchantment across the game if you lose a club.
"We've seen it happen in rugby league and it's a pretty painful thing.
"We've got a saturation of clubs across Sydney and I think that's important for us in terms of the competition we are in with other codes.
"We've got teams in important regional positions for us, so I dont think any club is expendable.
"Having said that, we cant be out there saying we've got a blank cheque, either."
But Gallop is adamant the game can survive.
"I dont think its all doom and gloom... I think rugby league can be something that people feel positive about in 2009 while they go through tough times. It can be a bit of an oasis in the desert."
You think he had his fingers crossed behind his back when he said that last comment?
