NRL 2020: Penrith Panthers to cut teams as financial reality hits hard

Penrith have the biggest rugby league nursery in the country – but they spend a fortune bankrolling it every year. But with funding set to be slashed, they admit something has to give next year.

SYDNEY, AUSTRALIA - MARCH 20: Brent Naden of the Panthers celebrates with teammates after scoring a try during the round 2 NRL match between the St George Illawarra Dragons and the Penrith Panthers at Netstrata Jubilee Stadium on March 20, 2020 in Sydney, Australia. Due to the COVID-19 virus outbreak, the fixture will be played with no fans in attendance due to a NSW Public Health Order prohibiting outdoor events with more than 500 people. (Photo by Jason McCawley/Getty Images)

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Penrith are preparing to axe several teams from the seven grade competitions they play in as part of the game’s brutal cost-cutting measures.

The Panthers outlay nearly $4 million a year to run sides in the Canterbury Cup, Jersey Flegg, SG Ball, Harold Matthews Cup, Laurie Daley Cup, Andrew Johns Cup and Tarsha Gale Cup.

However, that is about to stop next season.

The coaches and managers of these teams, along with their development and recruitment staff, rack up substantial costs for a club that has already been crippled by the coronavirus pandemic.

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The Panthers’ Rugby League Academy has some of the most talented young stars in the country. Picture. Phil Hillyard

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Penrith also have to cover living-away-from-home costs for young recruits, tertiary education allowances, medical expenses and clothing.

The numbers are being crunched and the club’s board will make a final decision later this year on which of the seven sides are to be cut.

“There is no way they can all stay – it would financial suicide if they do,” Panthers Group CEO Brian Fletcher said.

“I can’t possibly see us involved in all that in the future. It’s one area that will definitely change.

“Looking at the finances, there is no way in the world we could justify spending nearly $4 million a year developing those competitions. You have to look at it as if it’s your own business.

“Given the grant will be slashed, how can we afford to spend that sort of money. It doesn’t make sense.”

Penrith Panthers CEO Brian Fletcher says changes will have to be made. Picture: AAP

The NSWRL generously pays around $350,000 a season to clubs who participate in several of these competitions.

Fletcher didn’t want to predict which teams would be axed but said: “How can we afford to spend $4 million when we get a return of $350,000 from the NSWRL? These are the things now being looked at by the board.

“We just have to be ahead of the curve and to make sure we get all this out in front of us.

“This was OK five, six years ago when poker machines were flying but poker machines are now going south everywhere.

“Naturally, we have to balance the books. Expenses are the first thing you look at and this is a huge expense on the business.

“This will be put to the Panthers board when the (licensed) clubs reopen. We have to make a calculated decision. They would all be under the microscope.”

Penrith Panthers Leagues club has had to temporarily shut its doors due to the Coronavirus threat. Picture: AAP

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Reduced NRL grants will only add pressure to cut junior teams.

Like all clubs, Penrith are trying to survive without broadcast money and reduced revenue from sponsorship, merchandise and membership.

They own investment land but would be reluctant to sell off assets in the present climate.

“It’s a tough time, it’s tough for everybody,” Fletcher said. “You’ve got players, coaches, staff … it affects so many people. Anyone who says it’s not tough isn’t telling the truth.

“You just worry about the future because we have to come out the other end making sure all these people have got positions in the workforce, that rugby league continues and players’ wages don’t get destroyed.”

Penrith City Council has increased annual rent for Panthers Stadium from $90,000 to $180,000, which the club plans to query.

Originally published as NRL 2020: Penrith Panthers to cut teams as financial reality hits hard