State of the NRL Part II: Peter V’landys special investigation into rugby league’s biggest issues
The Dolphins are yet to play their first NRL game, but Peter V’landys is already eyeing an 18th team for the code’s next TV rights deal.
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The NRL has become a $600 million empire with the governing body on track to post a record profit in excess of $50m - two years after the Covid crisis almost sent League Central bankrupt.
And in another landmark financial development for the sport, all 16 NRL clubs are now running at a profit, including reigning grand-finalists Penrith and Parramatta, who lost a combined $19 million in 2017.
In the second part of a report into the state of the game, ARL Commission boss Peter V’landys and NRL CEO Andrew Abdo have revealed rugby league’s stunning fightback from the brink of bankruptcy to unprecedented financial prosperity.
Such is the growing goldmine, News Corp can reveal the NRL salary cap next season will be at least $11 million, and possibly as high as $11.5m with allowances when CBA negotiations with the RLPA are finalised within the month.
V’landys also outlined the NRL’s 18th-team expansion strategy, bold plans to raid NFL talent in America, and why he will not relent in his high-shot crackdown amid fears the code could be sued over brain-trauma injuries.
“The game’s finances have never been better,” he said.
“It’s important the game is never put in a position where it can’t sustain itself and risks going bankrupt.”
SAVING CLUBS AND SALARY CAPS
There is a well-worn adage in rugby league - football clubs don’t make money.
Just five years ago, NRL clubs were ostensibly in crisis, haemorraghing $60 million collectively. Traditionally, only the Broncos, Melbourne and Souths turned a profit, but this year all 16 clubs are in the black, including the Titans, who were rescued by the NRL in 2015.
The NRL’s new 17th franchise, the Dolphins, has assets of $100 million and will enter the league with the second richest commercial stable at $10m, behind only the Broncos.
The stronger financial bedrock has enabled the NRL to increase the salary cap.
After months of speculation, it can be revealed the 2023 salary cap will be at least $11 million, well above the projected $10.4m - giving rise to the prospect of the NRL’s first $1.5 million player.
SEE PART I — STATE OF NRL: V’LANDYS OFF-FIELD WARNING
“Player payments are going up,” Abdo said. “There will be more athletes with professional contracts for both the NRL and NRLW competitions than ever before.
“We are fully focused on our negotiation with the RLPA over the new CBA. We are really hopeful to reach the end of this month with a pretty exciting deal for stakeholders.
“Our current proposal is for a significant increase in salary cap for both male and female athletes.
“The clubs have never been stronger or more profitable.
“A couple of years ago, the situation was very different for clubs financially. Clubs were making significant losses in aggregate, so it was important to provide a strong financial base for clubs.
“The funds available for distribution have gone up significantly.”
REVENUE RAISING
In the last financial year, the NRL turned over $570 million and announced a $42.8m profit following V’landys’ ruthless cost-cutting exercise at League Central to insulate the sport from the ravages of Covid.
As a result, the NRL is forecasting record numbers. Speaking for the first time about the code’s future financials, V’landys declared the NRL will celebrate a $600 million-plus turnover for the first time in their history.
The NRL’s surplus next season is expected to hit a record $50m, eclipsing the previous benchmarks of $45.3m (2013) and $47.1m, set in 2018 under the leadership of then-NRL boss Todd Greenberg.
“We will be announcing record figures,” V’landys said.
“Our revenue will be in excess of $600 million and we have never reached those heights before.
“I’m proud that our cost structure is down to 23 per cent compared to the AFL’s 47 per cent, which means we are doing things in a cost-effective way at the NRL and, in turn, distributing more money to players, coaches and the clubs.
“The haters out there are trying to say, ‘You are saving money because you aren’t putting money into participation’, but we are actually investing more money in participation.
ON DEATH’S DOOR
The NRL has copped brickbats for buying Brisbane hotel Gambaros in July, but for V’landys, it was the first step in constructing an investment portfolio to future-proof the code.
When Covid struck in 2020, putting the Telstra Premiership on ice for two months, it was a kick up the pants for a governing body that had blown billions from previous broadcast deals.
V’landys revealed how close the NRL came to going broke.
“In reality, we were two months away during Covid from being insolvent,” he said.
“We couldn’t pay our debts and if we couldn’t borrow money, what would we have done?
“We had nothing to lean on.
“Without any assets to support us, the NRL would have gone broke and we wouldn’t have had a competition.
“Gambaros finally gives us an asset and from there, we want at least $100 million in assets so that the game is never put in a position where it can’t sustain itself and risks going bankrupt.
“The turnaround we have been able to achieve financially has been remarkable.
“People just take it for granted, but it’s been bloody hard work.”
BROADCAST BUNGLE
There is a view the AFL destroyed the NRL in TV rights broadcasting negotiations.
The AFL recently announced a seven-year, $4.5 billion deal between 2025-31, but V’landys scoffed at suggestions the NRL undervalued their product with Fox and Channel 9.
“It’s nonsense, the time periods (of the AFL and NRL broadcasting deals) are different for a start,” he said.
“The majority of the money they (the AFL) are getting is between 2027-31 ... we haven’t done a deal for those years yet, so how can people compare something when there is nothing to compare at the moment?
“People don’t understand that the AFL took a bigger cut than what we did during Covid from a broadcasting perspective.
“When the time is right, we will be looking at increasing our broadcast value.
“The AFL don’t do things better than us. We will beat them.”
CONCUSSION THREATS
During the week, it was revealed 75 English rugby league players, including Great Britain legend Bobbie Goulding, had begun a class action against the RFL over brain-trauma injuries.
In the past fortnight, NRL legends Ray Price and Mario Fenech have revealed they have been diagnosed with dementia, while James Graham spoke of his brain-damage concerns following an estimated 100 concussions.
There are fears it is only a matter of time before the NRL faces a lawsuit over concussive events. V’landys launched a crackdown 18 months ago on high shots in rugby league and says he will not relent in his bid to protect NRL players from brain-trauma threats.
“What I am concerned about is making sure we have the best and safest game for the player,” he said.
“I don’t want any person who plays our game to suffer any after-effects with brain damage or concussions. That’s my aim. And that’s why we launched the crackdown on cheap shots around the head. I want to stamp it out of the game and I am determined to do that.”
Asked if he watched Channel 7’s documentary on Fenech’s battle with early-onset dementia, V’landys said: “I did, absolutely. You wouldn’t have a heart if you didn’t feel for Mario Fenech and his family. It was heart wrenching for me to watch.
“I will continue the crackdown on high shots. It’s a contact game, so accidents will happen, but we need to look at tackle techniques and we will have programs to educate players.
“We must avoid head knocks as much as we can. We have to get rid of the cheap shots in the game.”
COMING TO AMERICA
The NRL remains in discussions about hosting one premiership fixture in America next season in the final week of February. Manly and the Roosters have been mentioned as possible travelling teams for a historic NRL match in the US. But V’landys wants a more solidified footprint in the Land of Opportunity.
“America is certainly a market for us,” he said.
“It’s a big revenue growth for us and one thing we learnt with broadcasting is we are so small scale.
“We have 25 million people in Australia. There are 40 million in California alone.
“We need to make the NRL bigger scale. We need to have the ambition to grow the game in huge markets and the beauty of technology today is the NRL can have a presence anywhere in the world.
“We need a long-term strategy. We want to take an NRL game over to America to show them how good rugby league is. Even if you start off picking up 10,000 customers, eventually it can multiply.
“In 2023, we’d like an NRL game in America and hopefully more games down the track.”
EXPANSION
Critics of the Dolphins’ inclusion have questioned if the NRL has the talent pool to sustain 17 teams. But V’landys is not finished expanding the code and is eyeing an 18th team for the code’s next TV rights deal, which would give the NRL a crucial extra game to sell to broadcasters.
The ARLC boss insists there are scores of athletes that can bolster the NRL’s talent pool, including millions of American Football players attempting to crack the NFL.
“Yes, there is an 18th team on the horizon,” he said.
“We will see how the Dolphins go.
“It (an 18th team) could be earlier than 2027.
“Next year will tell us a lot about expansion and the markets we must explore. We have put our foot in the water now and it will tell us if expansion is worthwhile.
“When there is a supply-and-demand situation regarding players, you have to look at external options.
“One of the things I feel is we should be looking at the NFL. There are thousands of great American athletes that miss out over there, surely there are some American Football players who can learn our game quickly and play wing or centre?
“While we are growing participation, we need to look outside the box and when supply doesn’t meet demand, you look to get your supply from somewhere else.”
“There’s plenty of avenues the game can explore to attract players.”
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