Balmain seek extension of deadline in desperate bid to save share of Wests Tigers
Date February 2, 2016 - 6:29PM
A desperate Balmain Tigers are seeking a year-long extension to repay $5 million in debt to the NRL in a last-ditch bid to save the foundation club.
Tigers chairman Leslie Glen met with the NRL’s head of club services, Tony Crawford, on Tuesday to raise the proposal as the days count down to their repayment deadline of March 31.
If the financially stricken club cannot meet that obligation they will be forced to sell their 50 per cent shareholding in Wests Tigers in the following six months, ending an association of 108 years with top-level rugby league.
As it stands they are no chance of repaying the debt, which ballooned as League Central covered the bills of their side of the joint venture over the past two years, but an ambitious Glen claims that with an extension of 12 months they could be in healthier shape.
He believes that with extra money expected to be distributed to clubs as a result of the recently signed $1.9 billion television rights deal - all clubs are set to receive bonuses of $1.5m this year and next year, and annual grants will rise significantly above the salary cap from 2018 - Balmain can survive, but only if they are permitted to tread water for another year.
“I think (the NRL) are sympathetic and we’re hoping that our joint partners, Wests Ashfield, will be similarly sympathetic given our situation,” Glen said.
“We know (the NRL) have expressed the view that they do not want to lose a foundation club. We believe that 2017 will set a different financial landscape for every NRL club and basically if we were able to hold on until then I think our longevity is assured.”
Despite Glen’s optimism, however, the ploy to buy more time is next to no chance of being approved.
The last of the NRL’s payments towards Wests Tigers was made on January 31 and if Balmain were to be cleared for another year to wipe their debt it would mean Wests Ashfield having to carry the freight for the NRL team entirely without the help of head office.
An NRL spokesman said on Tuesday: “We are meeting with all the parties before we come to a final position.”
The Wests side was unaware of the push for an extension to the March 31 deadline but are highly unlikely to be willing to cede a competitive advantage to rival teams by allowing a share of bonuses and grants to be channelled towards Balmain repaying their debt rather than going towards the NRL team’s operating costs. Wests Tigers themselves also owe $1.5m to the NRL.
Balmain’s bleak financial position - they were $11m in the red according to their most recent annual report last August - casts major doubt on whether they would be able to repay their debt to the NRL even if they were given an extra year. While the NRL grant will rise to 130 per cent of the salary cap in 2018 - meaning if the clubs’ total spending limit on players is lifted to $10m as has been mooted, the grant will be $13m - there is no such significant increase next year. And the two $1.5m bonuses heading the clubs’ way in 2017 and 2018 will not be straight cash handouts. Half of the money will be loans so teams can reduce their losses.
Even so, Balmain are clinging to hope of another lifeline as they also await a decision from the NSW Land and Environment Court in April on the future of the destitute Balmain Leagues Club in Rozelle.
The developers, Rozelle Village, in December waived their rights to terminate the club’s lease at the vacant site after freezing interest repayments on the Tigers’ $11m loan last April.
A green light from the court over a disputed development application would secure Balmain’s future financial well-being, Glen said.
“Every club runs through a bad patch financially and we believe the financial difficulties are now starting to look like they’re resolvable,” Glen said. "Our two start-up clubs at Five Dock and Sydney Markets (Flemington) are starting to give us a very good return. With Rozelle coming online that would put us in a much healthier position.
“If we got the extension this time next year we would have a very good shot at being able to manage a repayment set-up both with our developer at Rozelle and the NRL.”
If Balmain are forced to sell, Wests Ashfield will have first option to buy their 50 per cent share.
Read more: http://www.smh.com.au/rugby-league/balmain-seek-extension-of-deadline-in-desperate-bid-to-save-share-of-wests-tigers-20160202-gmjuwh.html#ixzz3z0QNhamA
Follow us: @smh on Twitter | sydneymorningherald on Facebook