NRL releases strong profit figures but off-season dramas will bite

The NRL’s combined profits for the 2018 and 2019 season should hit the $90m mark.

Australian Rugby League Commission Chairman Peter Beattie. Picture: AAP

The NRL’s combined profits for the 2018 and 2019 season should hit the $90 million mark, though the sport will be hard-pressed to repeat last year’s big increase in commercial income after an off-season marked by player controversies that will make attracting new sponsors difficult.

The league yesterday announced a standardised net profit of $46m for 2018 due to the adoption of a new accounting standard, though the actual figure was $57.5m from record revenue of $499.9m.

A sport’s profit usually falls each year of a multi-year television rights deal, during which a big profit is usually booked in year one and losses by the end of a contract, with the NRL recording a loss of $3.7m in 2017.

“We know this is the first year of the cycle — which we knew would produce strong financial health for the game,” NRL chairman Peter Beattie said. “But this is a result we can build on.”

The NRL is forecasting a strong $32m profit for the upcoming year, with broadcast revenue remaining strong in the second year of a record $2 billion broadcast deal with Fox Sports, Nine Entertainment Co and Sky Sports in New Zealand, and non-broadcast income at least holding steady.

The league’s 2018 profit exceeded its initial $32m forecast as well, with about $6.2m of outperformance being distributed as an extra payment to the 16 clubs, players and grassroots programs, chief financial officer Tony Crawford told The Australian.

“The big step up is always going to be the broadcast revenue increase, but we had a good year in terms of our commercial partnerships and sponsorships, and the 2018 State of Origin series was also really good for us,” Crawford said.

The big profit result for the NRL was mainly due to the competition being in the first season of its broadcast deal, for which the NRL receives an average $323m each year, though the league also managed to increase its commercial revenue by 21 per cent from $147m in 2017 to $178m. Yet Crawford admitted the NRL was unlikely to post similar commercial growth in 2019 after an off-season blighted by player misdemeanours, casting doubt on corporate Australia’s confidence in rugby league.

The sport’s off-field issues mean it still lags behind the AFL in terms of revenue even though its peak profit is a similar figure. The AFL’s income in 2018 could top the $700m mark after it had $650m income in 2017.

The NRL posted big increases in digital income for 2018, from $6.6m in 2017 to $23.6m, and Crawford claimed the league’s new in-house digital business managed to record a small profit in its first year of operation.

Sponsorship and wagering revenue was up about $5m to $78m, with digital income offsetting a fall in merchandising income and gate receipts.

Eight clubs also broke even or posted profits in 2018, with combined losses for the 16 teams cut from $61m to $25m last year — with Parramatta responsible for a large portion of the losses.

Clubs that recorded good financial results included Brisbane, South Sydney, Melbourne, Wests Tigers and New Zealand Warriors.

Meanwhile, the NRL has installed a finance committee to invest about $30m of revenue, led by commissioner Gary Weiss, a company director, and also including another director in corporate restricting specialist, Tony McGrath.

The committee will search for long-term investments and also includes Sydney Roosters billionaire chairman Nick Politis, his Storm and Broncos counterparts Bart Campbell and Karl Morris, and UBS investment bank executive George Kanaan.