Special investigation: How NRL clubs lost a staggering $42.7 million
in 2 hours
Phil RothfieldSports Editor-at-LargeThe Daily Telegraph
THESE are the frightening financial figures NRL clubs didn’t want you to see.
Figures from official auditing that reveal a $42.7 million disaster in a secret NRL document into the financial health of all 16 premiership clubs.
Only three clubs — South Sydney, Brisbane and the New Zealand Warriors — made a profit last season while Parramatta and Penrith in Sydney’s west lost a combined $14.4 million.
The crisis is set to prompt the NRL to implement a new salary cap on non-player costs, amid fears of an ‘arms race’ as club spending spirals out of control. The AFL already has a $9.4 million cap on football operation at each club.
BREAKDOWN OF EVERY NRL CLUB’S FINANCIAL PERFORMANCE
The 16 NRL club chief executives were sworn to secrecy when they were shown the audit results at a meeting in Auckland last Friday before the Nines tournament.
It was agreed only the average club loss of $2.7 million would be revealed to the media before the document was leaked to The Daily Telegraph by from someone inside the room.
The figures are for football operations without taking into account Leagues Club grants, which only nine of the 16 clubs benefit from. The losses came despite grants of $7.87 million from the NRL last year. Under the deal struck with the clubs and commission chairman John Grant at the end of last year, the clubs will receive an extra $1.5 million a year in 2016 and 2017.
Importantly the NRL and clubs have agreed to hold talks on ways to contain costs within football departments in future.
One of the options is to have a cap on football department expenditure from 2018, similar to a salary cap for players. It already has the support of the majority of clubs.
“The growth in non-player expenses has been extensive in all sports,” said Dragons chief executive Peter Doust.
“Some would say it’s become an arms race. It’s something that needs to be discussed because we can’t be going outside our means as we continue to grow. Club sustainability and looking after the players are what’s most important.”
The poor performances of Parramatta ($8 million loss) and Penrith ($6.4 million) are the most disturbing results for the game.
Both clubs faced extra costs in game development and junior funding in an area where the AFL is pumping in millions of dollars to fully establish a growth base for GWS.
Parramatta also had to cope with a substantial salary cap fine. The saving grace is that both the Eels and the Panthers are supported by strong leagues clubs.
The Rabbitohs were one of only three clubs to make a profit last season.
Even North Queensland reported a loss of $360,000 despite winning the competition.
They did employ two former first grade coaches, John Cartwright and David Furner, to help Paul Green and also spent $1 million on a new high-performance unit.
The Rabbitohs were the biggest success story, on the back of their grand final victory the previous year. Their membership grew to 35,000 — more than double most clubs — which provided income of more than $4 million alone.
Losses by the Titans ($3.3 million) and the Knights ($1 million) will be felt throughout the game because both clubs need to be topped up by their owners — the NRL — to balance the books.
Neither club has support from a leagues club. The fact NRL grants will increase to $9.37 million next year will make it more appealing for potential buyer to step in.