Manly chairman Scott Penn’s plea for federal government to provide financial assistance for NRL clubs
Manly Sea Eagles chairman Scott Penn has revealed his fears of “all clubs going under” without federal government assistance as all 16 NRL clubs’ financial health is revealed. READ IT HERE.
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Manly chairman and majority shareholder Scott Penn has urged the federal government to bail out financially stricken NRL clubs or face the possibility “all clubs would go under”.
Penn told The Daily Telegraph teams being forced to play in empty stadiums, or having the NRL season cancelled or postponed because of coronavirus, would have dire financial consequences for all clubs.
Penn was adamant the government should help the game for community purposes, declaring: “It’s a passion for so many people. It’s an element of hope every week.”
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The Daily Telegraph revealed on Monday that clubs may only survive for eight to 12 weeks if games were cancelled and sponsorship, gate takings, membership and the $14 million weekly broadcast grant to clubs stopped.
“If we can’t play in front of crowds, then there are lines of revenue in our PNL (profit and loss) that we just cannot deliver,” Penn said. “Yet if we have the same cost base, because we have player salaries meeting the cap, we’ve got staff with jobs … it’s an imbalance that can’t be rectified.
“So the reality is if that continued all clubs would go under unless they had significant reserves they could tap into or funding. It’s crucial that we find funding. The league is definitely going to need assistance to continue if we are unable to generate crowds.
“The reality is all clubs survive on a combination of the monthly (broadcast) grant, gate receipts, membership, merchandise and sponsorship. There are really only five or six key lines of revenue and the fact is, they are all contingent on us playing games and putting brands out in the market.
“If that is unable to occur then that would have a dramatic impact – unlike anything that has ever been seen before. It’s unprecedented. These are dramatic times.
“That is what everyone is working on right now as we speak. It’s a weekly update. Are we able to play? Are we able to give members and sponsors value for money? We would have to give pro rata refunds to members if they are unable to attend games. That would have a significant impact on every club.”
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Manly are one of the less wealthy clubs with limited resources and a modest budget.
Penn believes the game must continue being played to soothe a worried and concerned community.
“Having the benefit of being in a market where all professional sports have been currently suspended, it’s actually not good, I don’t think, for the population to not have sport,” Penn said.
“Certainly in Australia where sport is the absolute fabric of our culture. It’s what we talk about at the pub, many people participate in tipping competitions, fantasy league. To not have it would be a disaster.
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“I would implore the government to find some form of an assistance package because it actually has community benefit as long as the players’ health and safety aren’t at risk.
“There are tough times for a multitude of companies but we aren’t just another business – we do provide a level of weekly interest and hope that not many other companies do. It’s a passion for so many people.
“It’s an element of hope every week and it’s fun. I can watch my team – to not have that and focus on the catastrophic headlines isn’t what anyone wants.”
Penn said he was “impressed” with the leadership of ARL Commission chairman, Peter V’landys.
“He and the League are keeping communication high and are getting on the front foot, which we have to,” Penn said. “We are all in the same situation and we have to work together to find a solution.”
NRL CLUBS’ FINANCES
TIGERS: Don’t carry any debt but the club would be severely impacted by the season being postponed. Wests Ashfield Leagues Club has a healthy net asset balance of $60 million but it too is feeling the impact of the coronavirus. Any consideration given to using the assets of Wests Ashfield to ensure the survival of the Tigers would be a last resort.
RAIDERS: Owned by the powerful Queanbeyan Leagues Club that runs six licenced clubs with a new $20 million asset in the recently opened high performance facility. But it is important to note that the Raiders are run separately and would be in a world of hurt within two to three months without the broadcast money.
BULLDOGS: Are the controlling entity of the Canterbury Leagues Club with a conservative worth of well over $200 million that also consists of six houses and blocks of land. Like all NRL clubs rely heavily on the broadcasting cash for the day-to-day running of the football club. Still, would be in a pretty solid position if things get ugly in the coming months.
SHARKS: According to their annual report, the Sharks have $16 million in the bank as a result of $25 million in property sales from their Woolooware development site. Loans have been reduced from $4 million to $500,000. They also own their own home ground, the leagues club and Kareela golf club. However income will be affected over the next two years while the Leagues club is closed and the team is playing out of Kogarah.
WARRIORS: Owned by Autex Industries, a New Zealand-based manufacturing and product development company specialising in textiles and advanced fibre technology that has a staff of around 500 employees.
The Warriors are in an even more precarious situation than the rest at this point given the travel restrictions in place between Australia and New Zealand. If the Warriors players decide they won’t continue after round two expect this situation to become very tense if the owners were to miss out on their share of the broadcast revenue.
KNIGHTS: Knights CEO Phil Gardner has declared the club financially “secure”, even if the NRL season is temporarily halted because of coronavirus. “The Knights are in the fortunate position of being one of the most financially stable clubs in the NRL,” Gardner said of his franchise, which is owned by The Wests Group.
DRAGONS: The Dragons are solid financially thanks to being partially privatised by WIN Corporation, whose owner Bruce Gordon boasts a listed net worth of $702 million. WIN owns a 50 per cent stake in the joint-venture club, with the other half owned by St George District Rugby League Club.
EELS: While the Eels boast financial backing from Parramatta Leagues Club, it has been publicly reported that the footy club lost $10 million in 2017 and then $4 million the following year.
Contrary to some media reports, the Eels have not yet spoken definitively about the impact of any potential pay cuts as they still await further information from the RLPA and NRL.
SEA EAGLES: Live hand to mouth, according to majority shareholder Scott Penn. There simply isn’t a cash reserve to cover financial hardship. Each year the shareholders, primarily the Penn family, inject around $1 million to balance the books. The club dealt with an outstanding $2m tax bill last year. Have a modest budget and battle through financially every year. Rejected an offer for the club last year said to be worth $18m.
PANTHERS: Panthers Group owns five licenced clubs so have stable financial support. The club lost nearly $6 million in 2018 but did spend $2.5 million on junior league. Last year, Panthers recorded a $2 million profit from membership and ticket sales. Would survive longer than most other Sydney clubs suffering financial hardship.
RABBITOHS: As safe as any club is at present. Have the financial clout of Russell Crowe and James Packer behind them. The Rabbitohs have been prudent in recent years resulting in a $4m cash reserve. Most of that money has come through the club’s 29,000 members. Crowe and Packer own 37.5 per cent of the club, the remaining 25 per cent owned by South Sydney Members Rugby League Football Club.
STORM: Backed by the strong ownership group of Gerry Ryan, Bart Campbell and Matthew Tripp, Melbourne was recently independently valued in excess of $30 million after the Storm’s owners agreed to allow prominent Victorian businessman Brett Ralph on board. Storm boss Dave Donaghy has called for a measured approach to the coronavirus situation.
“It’s unprecedented times. It’s going to require everyone pulling in the same direction with cool and calm heads,“ said Storm boss Dave Donaghy said.
ROOSTERS: The Eastern Suburbs Leagues Club, which pays the football club an annual grant, recorded a very healthy net asset position of almost $129 million for the year ending October, 2019. On top of a financially successful leagues club, the Roosters have the backing of Nick Politis, who made a fortune selling cars.
BRONCOS: The powerhouse Queensland club reportedly has around $15 million in the bank and could survive for several months if the NRL is postponed. The Broncos reported a $3 million profit in 2019, well ahead of their NRL rivals.
COWBOYS: The club has been pretty profitable in the past two years but could be affected if the NRL season is postponed.
TITANS: The privately-owned Titans will be affected if the season is postponed. Owners Darryl Kelly and Rebecca Frizelle will likely have to top up their own cash to keep the club going.
Originally published as Manly chairman Scott Penn’s plea for federal government to provide financial assistance for NRL clubs
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