NRL clubs set to pocket historic fee from Papua New Guinea expansion bid

Part of the Federal Government’s $600 million commitment to backing an NRL team in Papua New Guinea is set to include a licensing fee to be distributed back to their NRL rivals.

The NRL is considering imposing a staggering $50 million licence fee on expansion hopefuls Papua New Guinea as the ARL Commission moves a step closer to an 18-team league.

This masthead can reveal the 18th franchise faces paying an unprecedented licensing fee as a condition of their entry to the NRL premiership to ensure the existing 17 clubs are not impacted financially by an expanded league.

As revealed by this masthead last week, ARLC boss Peter V’landys is ramping up plans for a 20-team league, prompting crisis talks during Magic Round with the Federal government over funding levels for a PNG franchise.

Prime Minister Anthony Albanese is prepared to commit $600 million over 10 years to a government-backed PNG team, which could be added to the NRL as early as 2027-28.

But the NRL’s historic plans for fresh expansion to the Pacific will come at a cost, with the governing body discussing a multimillion-dollar participation levy for PNG to garner the support of the clubs.

Australia's Prime Minister Anthony Albanese, Peter V’landys and US President Joe Biden.

The Federal Government’s soft-diplomacy strategy for a PNG team in the big league is multifaceted.

Under Albanese’s funding model, an estimated $300 million will be allocated to the 18th NRL franchise, which will form the centrepiece of a masterplan for social and educational reform in Papua New Guinea.

Potentially, $50 million could be paid to the NRL in the form of a licence fee, leaving around $250m for the code and the Federal government to invest in PNG for welfare and development programs.

V’landys was tight-lipped about the prospect of PNG being forced to pay a licensing levy, but reiterated the Federal Government is determined to bankroll an NRL operation in the Pacific.

“I’m speaking to the Prime Minister about the 18th team. That’s the level we’re at now, we’re at the highest levels,” he said.

“The government is extremely keen because of national security, there is no doubt about that.

“They have the right strategy in how to strengthen the relationship with Papua New Guinea.

“If you are part of our sporting competition and our sport is the number one code in PNG, that (having an NRL club in Papua New Guinea) will strengthen the relationship significantly.

“It’s a very smart plan by the government, no two ways about it.

“When you consider the government spends billions on submarines, this is peanuts (financially) by comparison.

“Soft diplomacy sometimes works better than anything else.

“We wouldn’t be looking at this (expansion) if it wasn’t to the financial benefit of our members.”

Wayne Bennett will not be at the helm of the expansion team. Picture: Bradley Kanaris/Getty Images

The Dolphins joined the NRL premiership as the 17th franchise last year.

The Redcliffe operation was never asked to pay a licence fee as part of their entry because the other clubs could see the money the Dolphins generated via the broadcast deal by adding another rivalry in Brisbane and more eyeballs on the game.

The concern is that a team out of PNG may not have the same impact and therefore won’t have the ability to pay for themselves.

As a result, it is understood powerbrokers have discussed charging a licence fee for their entry to the competition, which would then be spread among the existing clubs to win favour and assuage any concerns.

The clubs have made no secret of their serious concerns over the PNG bid, raising them at a meeting in Brisbane prior to Magic Round.

Chief executive Andrew Abdo attempted to put their mind at ease but the easiest way that can be done is by helping their bottom line.

The clubs want an increased slice of the financial pie if an 18th team is added to the competition and a licence fee would allow head office to potentially distribute significant funds to their existing clubs without reaching into their own pocket.

While clubs can’t dictate to the ARL Commission, they are members and have the voting power to force change – and potentially block expansion – if they aren’t happy with the way the game is being run.

There has been no sign that is the case with rugby league currently in fine fiscal health under the leadership of V’landys and Abdo.

V'landys and Andrew Abdo are deep into expansion talks. Picture: Mark Evans/Getty Images

However, the clubs are yet to sign licence agreements beyond the end of this season as they argue the finer points of the competition from 2025.

One of the key issues is the plans for expansion, specifically the $600m carrot that is being waved under the NRL’s nose to house a team in PNG.

The ARL Commission is also exploring possible tax incentives for Australian NRL stars to play in PNG, although the 17 clubs could view that as an unfair playing field under the salary cap.

“Some of the clubs may raise that (as an unfair advantage for PNG),” V’landys said.

“But we were criticised heavily before that we should have given more incentives for the Dolphins and given them salary-cap exemptions.

“In this case, it won’t cost the clubs one cent.

“I’m not saying expansion is definitely going ahead, but we will be in a position to have a business case to present to our members.

“If they are violently against it, we will consider it, but we’re not going to take something to the members if it doesn’t stack up.”