How 116 club bosses burned through $396 million in 10 years
NRL clubs have squandered almost $400 million in a decade of financial mismanagement — and some are even blaming Todd Greenberg for the explosion in operation costs.
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NRL clubs have squandered almost $400 million in a decade of financial mismanagement that has led to an astonishing turnover of 116 different chief executives and chairmen at the 16 clubs.
As the NRL faces its biggest financial crisis in history, an investigation reveals the clubs have lost $396.7 million since 2000, money burnt on dozens of coach sackings, overstaffing of football departments, player contract payouts, salary cap fines, the peptide scandal and legal expenses.
And some are even blaming NRL CEO Todd Greenberg for the explosion in operation costs which date back to his days at the Canterbury Bulldogs when he poached Des Hasler from Manly on the first million-dollar coaching contract in 2012 and handed him an open chequebook to sign the most expensive support staff in the game.
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With the salary cap levelling the player rosters and backed by a thriving Leagues club, Greenberg’s move was seen as the beginning of an arms race that blew costs out of control.
A study of annual reports and financial records from the last 10 years reveals:
# Costs for coaching and high performance have spiralled out of control, rising from an average of $1.6 million in 2012 to as high as $9 million last year – an increase of 462 per cent.
# Four clubs — the Newcastle Knights, Gold Coast Titans, St George-Illawarra and Wests Tigers — would have gone bankrupt but for the NRL’s intervention.
# The Cronulla Sharks have had eight chief executives in this period and the Parramatta Eels and Manly Sea Eagles have both had seven.
# Only three clubs have had the stability of one chairman.
The bleak figures from a decade of financial failure raise concerns about the NRL’s recently acquired $250 million line of credit from UK financiers and plans to hand out the funds to struggling clubs.
“They will never be in a position to pay it back,” said one senior official.
The clubs that have lost the most money – Parramatta, Penrith, Canterbury and Cronulla – can no longer rely on multimillion-dollar grants from their Leagues clubs for survival.
The bigger licensed clubs, Canterbury and Penrith, used to make annual profits of up to $35 million to support their NRL teams, but both lost money last year.
They have wasted millions sacking coaches and moving on players in recent years.
Making their position even more vulnerable is the fact licensed clubs are no longer trading during coronavirus.
Explaining how the management instability of having 116 different bosses has contributed to the disaster, one long-time official says: “Inexperienced CEOs have made some really poor business decisions.
“They haven’t stood up to coaches and said ‘enough is enough’ as far as costs go.
“There’s been this obsession to win premierships with irresponsible spending.”
New independent commission chairman Peter V’landys was shocked to find unmaintainable cost structure and shocking examples of overspending when coronavirus forced the NRL to open their books last month.
Still, he says: “There is no point looking backwards. I’m about the future.
“We’ve acknowledged our costs are unsustainable in all areas of the game.
“Our complete focus now is to cut expenditure at the NRL and introduce measures to ensure the clubs can be profitable and survive long term.”
In fairness there are a number of clubs that run a good business.
The Broncos, Rabbitohs, Roosters, Storm, Cowboys and Raiders have all been well managed.
Others are improving but they still lost a combined $31 million last year despite getting $208 million in grants from head office.
V’landys has guaranteed the survival of all clubs but says money from the $250 million line of credit will be handed out carefully.
“We’re not just giving money away without due diligence to ensure clubs don’t have an underlying problems that they need to rectify first.
“However I’ve given a commitment that all 16 clubs will remain in the competition and that commitments will be honoured.”
Cost cutting will start from NRL headquarters from now on.
No more years of spending $183 million or $500,000 a day to run the business.
But the clubs need to be equally as responsible because History shows the more money they get the more they waste.