Club bosses will ask about private equity during talks with the ARL Commission on Friday

Private equity is expected to get an airing again when club bosses meet the ARL Commission on Friday to discuss last year’s finances.

Commissioner Gary Weiss has been exploring private equity options

Private equity is set to rear its multi-million-dollar head on Friday as club bosses question the ARL Commission over their plans for expansion and their decision to turn their back on a cash injection of as much as $600 million.

The Australian understands that some club chief executives want to know why the NRL would effectively give away 7 per cent of their operations for free — the clubs are effectively shareholders in the commission, meaning any new side would be on equal terms with the existing 16 sides — yet reject the opportunity to sell a stake for untold riches.

The commission has been exploring the prospect of private equity after becoming the latest sport in the world to be approached by prospective investors willing to take a stake in the game in return for millions.

Commissioner Gary Weiss was charged with investigating whether private equity was an option and while there has been no public pronouncement from head office, it is believed there is little appetite to sell off a stake in the game.

The commission’s determination to run their own race was no doubt strengthened by the way they emerged from the COVID crisis last season. Their deficit in 2020 was less than $25m, a remarkable result given the clubs were given more money than ever and the State of Origin series fell into this year’s accounts.

Had the Origin series been played prior to October 31, it would have closed the gap significantly. As it is, the NRL finished the year with $130m in the bank — their financial results will be officially confirmed at their annual general meeting on Friday — leaving the game with no real need to explore private equity in any great detail.

That said, the NRL has discussed the prospect of buying a stake in English Super League and there was a view that private equity would allow the game to push ahead with those plans. It would also give the clubs the sort of cash injection they crave — a chunk of private equity would have been directed their way.

However, the NRL’s strong financial results last season suggest that if they can get some clear air, free from the shackles of COVID, they may be able to generate enough money on their own to make a serious run at Super League.

That financial position may be strengthened if some clubs have their way and the commission demands that any expansion franchise pays a license fee to join the competition.

ARL Commission chair Peter V’landys is expected to provide more information about expansion during talks with club bosses on Friday, the issue having simmered over the summer.

It is understood the commission will call for bids in April before opening talks with potential franchises in June or July.

As it stands, it is a race in three, although the Brisbane Jets are believed to be running a distant third behind the Brisbane Firehawks and Redcliffe.

The commission has the backing of their broadcast partners the Nine Network and Foxtel. While Nine is yet to agree a new deal beyond 2022 — the new team will enter the premiership in 2023 — they are cashed up after enjoying healthy profits last year.

Part of the reason for that was the discounts that were handed to them by the NRL during COVID — more clarity around the amount that was refunded will be provided when the full accounts are revealed at Friday’s meeting.

Foxtel has extended its deal with the game until the end of 2027, but it is believed that contract includes a clause that caters for the deal to be potentially renegotiated if a 17th team is added to the premiership.

“I have said for the record that the business case has to stack up and it can’t destabilise the Brisbane Broncos or the Gold Coast,” V’landys said.

“We need to see how it will help the game in Queensland, particularly with participation. We are under threat up there (in Queensland) and we need to meet the challenge.”