This week I have written a follow up piece in relation to this same issue. Before I get into it however, I just wanted to say a big thank you to Damian Irvine who helped me out with this piece. Damian got in contact with me following the article I wrote and has been so generous with his time and extremely willing to speak to me and give his perspective. For that, I am very grateful!
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While we as fans often focus on the
results of our team - NRL clubs as a whole need to consider so much more than
this. Sport is primarily a business and smart and savvy business decisions need
to be made by the administration of each club to ensure that their clubs are
successful both on and off the field.
Ultimately, commercial decisions involve more than just ensuring that a
football team is winning on the park. A club also needs to be able to meet its
financial obligations.
As revealed in an SMH article last week, the position of many NRL clubs is not as healthy as some fans would hope. 14 out of our 16 clubs are operating at a financial loss this year. The only two teams that are self sufficient are the Brisbane Broncos and the North Queensland Cowboys. These are the only two teams in the current NRL competition that are able to be self-sufficient based on merchandise sales, sponsorship and entrance into the games. It is interesting to note that both these teams operate outside of the saturated Sydney market where the majority of NRL teams need to compete not just with each other, but also with rival codes like AFL and Rugby Union. These two teams almost have a monopoly of support in their geographical location in Queensland. This raises questions however as to why clubs like the Titans and the Storm cannot capitalise as much on their isolation from the Sydney market to the same extent that the Broncos and Cowboys do.
In stark contrast to the performance of these two clubs, there are concerns about particular NRL
clubs like the Sharks and the Tigers. The Sharks face challenges in the near
future following the ASADA investigations which will continue into the off
season. In the past, the financially viability of the club has been and now
will continue to be seriously questioned over the coming months. It is likely
that if the fall out from the ASADA investigation results in penalties even
close to that suffered by the Essendon Bombers, that the Cronulla Sharks will
be unable to survive. As revealed in an SMH article last week, the position of many NRL clubs is not as healthy as some fans would hope. 14 out of our 16 clubs are operating at a financial loss this year. The only two teams that are self sufficient are the Brisbane Broncos and the North Queensland Cowboys. These are the only two teams in the current NRL competition that are able to be self-sufficient based on merchandise sales, sponsorship and entrance into the games. It is interesting to note that both these teams operate outside of the saturated Sydney market where the majority of NRL teams need to compete not just with each other, but also with rival codes like AFL and Rugby Union. These two teams almost have a monopoly of support in their geographical location in Queensland. This raises questions however as to why clubs like the Titans and the Storm cannot capitalise as much on their isolation from the Sydney market to the same extent that the Broncos and Cowboys do.
In relation to the Tigers, at the moment the club is facing a battle between the Balmain and the Western Magpies sides for control over the club with Balmain willing to sell part of their stake in the Wests Tigers to a private investor in order to resolve a more than $1 million current shortfall. Balmain currently is not able to contribute money to the shortfall and are also in talks with the NRL for a 'rescue package'.
While not all the NRL clubs are in such a
precocious financial position, other clubs like Canberra, Parramatta, Penrith
and St George are heavily dependent on their leagues club or clubs to help make up the
deficit. This is concerning for a number of reasons. Firstly, that much of this revenue is generated as a result of gambling and pokies, raising further questions as to whether this
is an appropriate revenue stream for clubs to take advantage of, considering
the complete disconnect between pokie revenue and football.
There has been a history of this sort of revenue being generated by the clubs. Damian was able to give me an interesting perspective on this. As a result of large gaming revenues generated by the leagues club throughout the 1970's to 1990's, football clubs had greater ability to use this revenue to cover any deficit in their financial obligations. In recent years, the revenue generated from this source has not been as much as it once was. This is in an environment where the costs of operating a football club have increased dramatically and where the salary and remuneration given to top executives and middle management has risen. As a result, clubs operate in a scenarios where they are unable to sustain their businesses and depend on working licenced club managers who face their own difficulties in a challenging market. The NRL clubs need to work towards being sustainable businesses rather than depending on completely unrelated revenue sources.
The NRL clubs also need to be more realistic in the way they are governed. In an environment where most of the clubs are operating in deficit, salaries of management need to be kept in line. No other industry would accept increasing salaries in the face of continuing financial losses.
So what is the solution?
First of all, the NRL clubs need to become more creative in generating revenue. In my opinion, the most underutilised source of revenue for the clubs is game day. There have been numerous articles this year about the dwindling crowd numbers for season 2013. For example, earlier in the year, a Daily Telegraph article suggests that crowd numbers have reduced from a round 4 average of 22,388 to a round 19 average of 11,480. Read more here.
Clubs and the NRL need to work together to begin getting people through the gate again and need to consider why there has been a decrease in crowd numbers this year. I think there are many reasons for this. First of all, the NRL has shown tremendous disrespect to people who would prefer to attend matches live in favour of seeking higher ratings and a greater viewer base at home. This can be seen in a number of ways. Firstly, the introduction of Thursday and Monday night football. For viewers at home, these games are fantastic. It means that there is NRL on television more nights than not during the week meaning that people watching at home have no excuse for not getting their NRL fix.
I am a fan who prefers to watch my football live. I love the atmosphere and get a real buzz from being close to the action. However, like most people, I work and having to leave work early on a Thursday or a Monday to attend the football is near impossible. It is even a battle on a Friday night. This means that the games I am most likely to attend are those that happen on a Saturday or a Sunday and depending on how your team is treated in regard to scheduling, this means that the games I can actually attend are few in number. Professionals are not the only ones who struggle to get to Thursday or Monday night games. Those with young children have problems keeping the little ones up that late, especially if they have to attend school the next day.
This is not the only reason crowd numbers are down this year. Club which have tremendous followings like Parramatta, Wests and St George Illawarra have not performed well meaning that fans are less likely to attend games. In this sense, clubs are not enemies but need to work together. Poor attendance for one club means that when they play other teams, particularly teams that are performing much better than them, overall crowd numbers go down. Local derby's depend on a good contest and if the teams cannot provide this, fans will not attend games.
Further, there have been many people disillusioned with the refereeing and the impact that refereeing decisions can have on the outcome of the game. This has also contributed to a sense of general dissatisfaction with the game.
The NRL clubs need to get back to basics - members and people who attend games need to be valued. According to Damian, game day is not given as much consideration by clubs as it should be. This I find staggering but unsurprising. In an environment where clubs are being offered a guaranteed revenue stream by some of the larger stadiums there is even less incentive for the clubs to think about the best way to ensure that their supporters turn up to watch their team play live.
However, the bottom line is, the more people that walk through that gate, the more revenue generated from ticketing, food and beverage sales. Maximising the game day experience should be an absolute priority not just for the clubs from a financial position, but to ensure the health of our game long term. No one enjoys footy in a half empty stadium.
In this sense, the clubs are not enemies, but
should work together to ensure their financial viability. There was an attempt
at this last year between the Rabbitohs, Rooster, Bulldogs, Dragons and Tigers
in relation to ideas and resources. This recognised that while the clubs are
competing between each other for the ultimate prize come October, the clubs all
have similar goals in what are difficult economic conditions. What came of this is unclear. There has been a history of this sort of revenue being generated by the clubs. Damian was able to give me an interesting perspective on this. As a result of large gaming revenues generated by the leagues club throughout the 1970's to 1990's, football clubs had greater ability to use this revenue to cover any deficit in their financial obligations. In recent years, the revenue generated from this source has not been as much as it once was. This is in an environment where the costs of operating a football club have increased dramatically and where the salary and remuneration given to top executives and middle management has risen. As a result, clubs operate in a scenarios where they are unable to sustain their businesses and depend on working licenced club managers who face their own difficulties in a challenging market. The NRL clubs need to work towards being sustainable businesses rather than depending on completely unrelated revenue sources.
The NRL clubs also need to be more realistic in the way they are governed. In an environment where most of the clubs are operating in deficit, salaries of management need to be kept in line. No other industry would accept increasing salaries in the face of continuing financial losses.
So what is the solution?
First of all, the NRL clubs need to become more creative in generating revenue. In my opinion, the most underutilised source of revenue for the clubs is game day. There have been numerous articles this year about the dwindling crowd numbers for season 2013. For example, earlier in the year, a Daily Telegraph article suggests that crowd numbers have reduced from a round 4 average of 22,388 to a round 19 average of 11,480. Read more here.
Clubs and the NRL need to work together to begin getting people through the gate again and need to consider why there has been a decrease in crowd numbers this year. I think there are many reasons for this. First of all, the NRL has shown tremendous disrespect to people who would prefer to attend matches live in favour of seeking higher ratings and a greater viewer base at home. This can be seen in a number of ways. Firstly, the introduction of Thursday and Monday night football. For viewers at home, these games are fantastic. It means that there is NRL on television more nights than not during the week meaning that people watching at home have no excuse for not getting their NRL fix.
I am a fan who prefers to watch my football live. I love the atmosphere and get a real buzz from being close to the action. However, like most people, I work and having to leave work early on a Thursday or a Monday to attend the football is near impossible. It is even a battle on a Friday night. This means that the games I am most likely to attend are those that happen on a Saturday or a Sunday and depending on how your team is treated in regard to scheduling, this means that the games I can actually attend are few in number. Professionals are not the only ones who struggle to get to Thursday or Monday night games. Those with young children have problems keeping the little ones up that late, especially if they have to attend school the next day.
This is not the only reason crowd numbers are down this year. Club which have tremendous followings like Parramatta, Wests and St George Illawarra have not performed well meaning that fans are less likely to attend games. In this sense, clubs are not enemies but need to work together. Poor attendance for one club means that when they play other teams, particularly teams that are performing much better than them, overall crowd numbers go down. Local derby's depend on a good contest and if the teams cannot provide this, fans will not attend games.
Further, there have been many people disillusioned with the refereeing and the impact that refereeing decisions can have on the outcome of the game. This has also contributed to a sense of general dissatisfaction with the game.
The NRL clubs need to get back to basics - members and people who attend games need to be valued. According to Damian, game day is not given as much consideration by clubs as it should be. This I find staggering but unsurprising. In an environment where clubs are being offered a guaranteed revenue stream by some of the larger stadiums there is even less incentive for the clubs to think about the best way to ensure that their supporters turn up to watch their team play live.
However, the bottom line is, the more people that walk through that gate, the more revenue generated from ticketing, food and beverage sales. Maximising the game day experience should be an absolute priority not just for the clubs from a financial position, but to ensure the health of our game long term. No one enjoys footy in a half empty stadium.
One final consideration is a comparison
between the performance of the AFL and the NRL. Based on figures, the NRL seems
to be underperforming compares to the AFL, particularly when you compare the
wealth of one of the NRL's better performers like Brisbane with a club like
Collingwood, who generate more than 50 per cent more revenue than the Broncos.
This does not take into account however that there is tremendous disparity
between the rich and poor clubs, with the unevenness of the playing field being
noted in research
conducted earlier this year.
Damian Irvine suggests that the NRL has
been hampered by a lack of centralisation in the past. The AFL has had a
Commission since 1985 and has had control over the AFL since 1993. This is
compared to the NRL where the Commission only took charge in 2012. This should
see a more centralised view taken to earning and generating revenue, hopefully
to the benefit of the 16 NRL clubs.As a NRL appreciator and enthusiast, I am passionate about the NRL and ensuring its survival. With many teams under pressure at the moment financially, the NRL and the clubs need to work together to ensure the continuing health and functioning of our game.
Love,
@LadiesWhoLeague
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