“We need to think big”: Dave Smith. Photo: Tamara DeanUltimate League: Click here to sign up for our Fantasy NRL game In the money: Highlights of the results
Expansion is firmly back on the agenda after the NRL announced plans to invest more than $200 million to make rugby league the No.1 code in Australia within four years.
Bolstered by a $49.4 million profit in his first year in the job, NRL chief executive Dave Smith declared the game was now a big business – and would behave like one – as it searched for new opportunities.
”Rugby league is poised for growth in a way that it never has before and we will consider growth, and we will make rugby league even stronger and healthier than it is today,” Smith told the annual general meeting of the game’s stakeholders at Darling Harbour on Monday.
With four years of the $1.2 billion broadcast deal to run, no new teams are expected to be admitted to the NRL until 2018 but Smith confirmed expansion would be carefully considered at the end of the season and he hinted that franchises may be invited to join a national second-tier competition before then.
While there are several bid teams already established, including the Central Coast Bears, West Coast Pirates, Papua New Guinea Hunters and private consortiums in Brisbane, Ipswich, Rockhampton and Wellington, Fairfax Media understands that Smith won’t call for applications. Instead, he will commission studies on the benefits of expansion and what areas would offer the most value to the NRL if a team was established there. The NRL may even use some of the $80 million being put aside in a ”sustainability fund” to help with start up costs.
”I am looking at it from top to bottom,” he said. ”We will look at the premiership and we will look at the competition structures and we will look at what works and what doesn’t work and we will look at what creates value and what doesn’t create value. This year we will take all of it into consideration and we will think very carefully about what is the right thing to do given where the game is.”
For anyone in the room when Smith joked after watching footage of his first 12 months as NRL chief that he was ”slightly older now, definitely slightly fatter and I think my skin is probably thicker as well”, there could be no doubt the game now has ambitions that it had never previously been in a position to even contemplate. Broadcast revenue last year was worth $221.3 million and Smith said he wanted the game’s other revenue sources to equal that figure by 2018.
To do so, the NRL is aiming to increase sponsorship income from $20.6 million last year to $36 million in 2017 and gate receipts earnings from $32 million to $62 million over the same period. A target of doubling NRL club members to 400,000 by 2017 would also bring an additional $50 million in.
”We’ve got a good story to tell about rugby league and it is a story we think sits as well in the business section as the sports pages,” Smith said. ”Many of you have heard before that rugby league is a big enterprise so we need to think big.”
While Smith stopped short of declaring war on the AFL and other rival codes, he said: ”Wind the clock forward five years and we will be the biggest sporting community in Australia, we will have hopefully gone through the next [broadcast] rights deal and seen a big uptake in the value of our rights and we will have more people playing the game, more fans watching the game and better stadiums.”
Besides the $80 million sustainability fund, the NRL will put $120 million over the next four years into a ”growth fund” to invest directly on football and participation, fans and members and the financial sustainability and governance of clubs.
Smith said $11 million would be spent on bring the NSW and Queensland Cups under the NRL banner to establish a national second-tier competition, with the winners of both competitions to play off on grand final day at ANZ Stadium.
A salary cap review is also nearing competition and NRL chief operating officer Jim Doyle gave a further indication of the innovative way the game was now run when he confirmed a number of radical proposals were under consideration.
”We thought, let’s engage with all the stakeholders and let’s put on the table all the options,” Doyle said.
”We have landed on nine different topics and all of those nine topics are still being discussed, and within them there are either one solution or multiple solutions.”In the money: Highlights of the results
Central revenues of $314 million with increases across both broadcast (up 118 per cent) and central operations (up 16 per cent). Led by 25 per cent increase in sponsorship and 14per cent in major game revenue.A higher yield from major events and sponsorship to give the NRL a better quality income stream.More than $241m invested in game.$2.2m investment in new governance measures, including the integrity unit, to deliver a state-of-the-art drug testing regime, policing the rules, and managing the salary cap.Increase in club funding from $76m to almost $120m (up 57 per cent), ensuring that for the first time club funding is greater than the agreed salary cap.Increase in funding for state leagues and affiliates to about $17m (up 18 per cent).More than $22m allocated to support grassroots competitions and Rugby League school based activities.Stable operating costs achieved despite revenue growth with a 2 per cent increase in administration costs to $15.7m plus an extra $2m in competition, player education and welfare and community costs.
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