Monday Buzz: Financial hit of coronavirus crisis to rock rugby league
Many of the 16 NRL clubs are already losing millions of dollars without the added effect of coronavirus and are facing bankruptcy, writes PHIL ROTHFIELD.
NRL
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When the Manly Sea Eagles ran on to Brookvale Oval to host Melbourne Storm on Sunday afternoon, another $2.5 million jumped into the NRL’s coffers.
The same when the St George Illawarra Dragons played the Wests Tigers. Another $2.5 million.
That’s why the great game can’t afford to stop, and why NRL bosses will need to convince the Warriors that they must remain in Australia.
Many of the 16 clubs are already losing millions of dollars without the added effect of coronavirus and are facing bankruptcy.
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THE PLAYERS
The Daily Telegraph understands NRL boss Todd Greenberg asked the New Zealand Warriors players to stay in Australia for up to three weeks. They would agree to only seven days at a meeting on Saturday night.
“It’s a reality and it’s on the table that we get through this weekend. We’ve got to make a decision with the players,” George told New Zealand media.
“What do we do? Do we continue to live this week-by-week scenario?
“We gave the players the option. If you want to come home, you can. That could change during the course of the week. Players might want to come home during the week.
“The reality is that they’ll stick it out for seven days and there’s a massive decision to make one way or another.”
If the Warriors return home they would have to self isolate for two weeks.
George believes the worst-case scenario is close to inevitable.
“I think it will get to a point where there are multiple players (catching coronavirus) and to protect everyone they will have to cease the competition,” George said.
Players may be forced to carry some of the financial burden of a shutdown.
Under the collective bargaining agreement, the NRL can negotiate a reduction in the salary cap for unforeseen multimillion-dollar falls in revenue, like in this case.
The RLPA is monitoring the situation with the NRL and the players.
“Players are concerned,” Clint Newton said.
“But there has been no major backlash. We need to carefully consider all the consequences of suspending the competition.
“This is constantly changing. The players being included in all communication is critical.”
Earlier, North Queensland skipper Michael Morgan called for the competition to be postponed.
“It’s not ideal that we’re travelling every second week,” he said.
THE COST
The game’s finances are shakier than Peter V’landys’ relationship with Todd Greenberg.
Every weekend of rugby league is worth $14 million to the NRL in television rights from Fox Sports and Channel 9.
Throw in another $5.5 million in ticket sales, corporate hospitality, merchandise, ground signage and food and beverage income.
Plus there is the $10 million Telstra naming rights sponsorship deal.
That’s why the premiership will continue next weekend, providing government health experts don’t advise the NRL to suspend the competition.
For a business that has only $75 million in the bank, the $20 million each week is vital.
Not just for the superstars and the big pay packets but for the survival of clubs, grassroots, park football participation and thousands of employees across the code.
“Our game has never faced a challenge like this,” independent commission chairman V’landys said.
“It could have catastrophic effects on us.
“You can’t have costs but no revenue. The longer we don’t play, the more financial pressure there is on the game. Our money will only last so long.”
THE CLUBS
On Saturday, the independent commission agreed to a $6.8 million stimulus payment to the clubs that was sitting in the NRL’s distressed club funding account. Each club received a $425,000 payment to ease immediate cash flow problems.
It’s estimated the clubs will need $4 million handouts to survive, $64 million all up.
That’s on top of the $13 million grants they already get.
Some clubs need more help than others.
The nine Sydney teams are nowhere near as financially strong as the Brisbane Broncos, the Cowboys or Melbourne Storm.
Greenberg, who has been under fire from the clubs, has vowed to ensure their survival.
THE GRASSROOTS
V’landys says the decision to ask the government for emergency funding is vital for junior rugby league and overall participation.
“We’re talking about a whole of game problem,” V’landys said.
“It’s not just about the NRL players getting paid.
“The state leagues need funding to run junior competitions and it is in the government’s best interests to have kids playing sport.”
The junior competitions that were scheduled to start in two weeks’ time are now likely to be put on hold.
THE FANS
The 16 clubs will be forced to refund more than $28 million to members and season ticket-holders if the competition is called off.
Some clubs have already spent the revenue from membership and need urgent NRL bail-outs. Most clubs emailed their members yesterday about refunds.
In an email to members, the Cronulla Sharks said: “In relation to potential refunds or compensation, the Sharks ask for patience and understanding. The club will also continue to work closely with Ticketek and the NRL in regards to refunding tickets for the games affected.”
Greenberg has established a working group to determine how fans will be compensated.
“We understand that fans have already paid for club memberships and upcoming matches where they will be locked out,” he said.
“There’s no answer to how long the lockout may last and we ask everyone to remain patient, but fans should rest assured knowing you are a priority for both the NRL and every club in the game.”
THE VENUES
The NRL will stick to its current schedule for next weekend’s games.
However, there is talk of venue sharing if the competition continues.
All Sydney games could be played at Bankwest or ANZ Stadiums to save the costs of opening other venues. The Warriors and Titans will share Cbus Super Stadium on the Gold Coast.
There is also the Wayne Bennett option being considered of all 16 clubs relocating to North Queensland and playing out of Cairns and Townsville.