By Adrian Proszenko and Adam Pengilly
A new Queensland team armed with a $50 million bank guarantee will officially be invited to join the NRL in time for it to begin competing for player signatures from November 1.
ARLC chairman Peter V’landys and NRL CEO Andrew Abdo held a conference call with the 16 club chairs and chief executives on Thursday, where expansion and the game’s finances were the hot topics. The governing body revealed a profit of $50 million for the financial year, a figure that would have been $81 million had it not been for COVID-19 costs over the course of the league financial year.
The Dolphins, Firehawks and Jets are vying for the 17th licence, with Redcliffe-based Dolphins considered the favourites to become the game’s next franchise. While the AFL has propped up its expansion clubs with extra financial payments until they became established, the new NRL team is expected to stand on its own from day one. They will not, however, be burdened with a licence fee, which some existing clubs hoped would add value to their own bottom lines.
The existing clubs were told the cost of having an additional team would be $15 million per year, which would be offset by the $20 million per annum that Foxtel were prepared to pay over the next five years to showcase an extra Brisbane team.
That would allow the 16 existing teams to receive additional funds in the future, allaying fears the size of the revenue pie would be sliced up thinner between them. The new club will be required to have a $10 million bank guarantee per annum over the next five years to prove it is sustainable, with no additional handouts from head office.
The successful team will be informed within a fortnight, to ensure it has time to compile a competitive roster for 2023. Players who aren’t contracted beyond 2022 will become free agents on November 1, with a new bidder entering the battle for free agents including such as Cody Walker, Joseph Manu, Dylan Brown, Viliame Kikau, Clint Gutherson, Brandon Smith, Kalyn Ponga, Reed Mahoney, Dylan Edwards and Jack Bird. Wayne Bennett, having completed his stint with South Sydney and indicated he is moving back to Queensland, is expected to be headhunted as the coach by the chosen franchise.
Andrew Abdo and Peter V’landys addressed the clubs on Thursday.Credit: NRL Photos
The clubs were also told Rugby League Central was close to securing a new free-to-air deal, understood to be with the Nine network, the publishers of this masthead. The NRL will scale back its own digital department, a process that began on Wednesday when staff were informed there would be redundancies, given it was considered a competitor to the existing broadcasters.
The NRL was able to post a strong financial return, despite the challenge of relocation and other coronavirus-related expenses, by cutting costs by $55 million. It meant the game didn’t have to borrow money during the pandemic, allowing clubs to be funded at their highest levels at a time when the AFL is cutting back its distributions to stakeholders.
The clubs received $253 million of the $376 million the NRL distributed, the rest going to the NSWRL, QRL or spent on growing participation.
In 2019, the 16 clubs lost a collective $37.5 million, raising fears not all would survive the pandemic. However, they posted a collective surplus of more than $21 million last year thanks to increased grants and JobKeeper subsidies, putting the game in a position to expand rather than contract.
However, sources with knowledge of Thursday’s meeting told the Herald that some clubs still felt their funding should be further increased. The issue of loyalty payments, allegedly struck under a memorandum of understanding five years ago, was raised. It’s claimed the clubs are entitled to about $1.5 million each under the arrangement, although the NRL believes it has more than honoured its commitments by ramping up handouts.
Regardless, head office believes the issue is a moot point given its new arrangements – which include expansion and the additional monies the move will bring – will more than offset the loyalty payment terms.
The NRL hasn’t yet stated how much of the $50 million profit it will pass down to clubs or to what tune they will be funded in the future. Abdo and V’landys gave a commitment to provide a figure by the end of the month, although there were some heated exchanges over what the landing point should be.
While the Dolphins are in the box seat to be welcomed into the league, the Firehawks and Jets haven’t given up hope of snatching the license. Having been told after their initial pitch to the ARLC last month they needed to bring more financial clout to the bid, the western corridor-based Jets have raised a further $23 million in guarantees in just three weeks through a suite of investors.
Entrepreneur Andrew Leary raised the capital in a last-ditch bid to prove the viability of the Jets to the NRL’s expansion assessment committee.
“It’s not poker machine money, this is new investment the game can capitalise on for years to come,” Leary said.
Jets bid director Nick Livermore added: “I know that we’re going to be financially very successful through our commercial and corporate program as well as membership and game day, and we’d far outstretch the other two bids.
“We’re not backed by poker machine revenue money. That should not be the model for rugby league clubs to be financially viable.
“We represent an area which is like what Penrith and Parramatta are to Sydney. I keep coming back to the fact: do we want to have the richest leagues club backed team or do we want to see more boys and girls playing?”
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