Eels will lose $11m in 2016, in what is believed to be the biggest single-year loss in NRL history
EXCLUSIVE: Parramatta will lose more than $11 million for its disastrous 2016 season in what is understood to be the biggest single-year loss in NRL history.
PARRAMATTA will lose more than $11 million — including $1.24 million in legal advisers and consultants’ fees — for its disastrous 2016 season in what is understood to be the biggest single-year loss in NRL history.
The revelations will be made in a letter to members as the Eels unveil the full financial damage from a scandal-plagued season in which the club’s entire board was sacked over systematic rorting of the NRL salary cap.
The massive bill has been picked up by the Eels’ rich poker machine palace parent, the Parramatta Leagues Club. Despite its huge subsidy to the Eels, the leagues club will still make an annual profit of about $4 million.
REFORMED: Friend ready to clean up as a Kangaroo
PAUPERS: Roos training in ‘unbelievable’ luxury
HEAVY HITTER: Trbojevic is a man of his word
The Eels’ 2016 losses include:
● $952,000 in player terminations, including golden goodbyes to Anthony Watmough and Kieran Foran;
● $1.12 million in fines and penalties, including the NRL’s $750,000 fine and the loss of the club’s $370,000 prizemoney for winning this year’s Auckland Nines;
● $1.24 million in legal advisers and consultants’ fees. The vast majority of this are fees clocked up in a Supreme Court challenge by Parramatta’s now-departed “Gang of Five” against the NRL’s sanctions. It also includes legal fees for the five former Eels officials, who all retained separate legal counsel as they fought their individual bans. This figure is also believed to include fees for the club’s administrators appointed after the leagues club board was sacked in July;
● $700,000 in lost sponsorship revenue, most notably including what would have been paid by Infinity and Cleanaway had they seen out the 2016 season with Parramatta. Both departed the club after the salary cap scandal;
● A $742,000 provision for “sponsorship bad debt”, most notably sponsors of the Eels who are currently in dispute about their obligations. One of these parties is believed to be the club’s former major sponsor, Dyldam. Legal claims are understood to have been lodged by Parramatta against Dyldam in the District Court.
In the letter to members, interim Eels CEO Bevan Paul said the Eels’ losses were “clearly unacceptable and with the leagues club redevelopment scheduled to begin in early 2017 it is critical that Eels costs are constrained within the benchmarks of comparable NRL franchises”.
Paul said that a planned $130 million redevelopment of the leagues club — due to be completed in 2019 — was “fundamental” to its future profitability.
However, he said it continued to make millions each year despite the huge subsidies to the Eels. Paul said that Parramatta administrator Max Donnelly had given the green light to commence stage one of the leagues club redevelopment early next year because the club remained solvent.
Paul’s letter also hints that suppliers involved in fraudulent invoices to the club as part of third-party agreements as part of the salary cap rorts will not be paid. “Persons involved in third-party agreements have been advised that contracts will be re-tendered or cancelled,” he said.
Originally published as Eels will lose $11m in 2016, in what is believed to be the biggest single-year loss in NRL history