League's $2b revenue boost a start, but not enough

BRAD WALTER
Last updated 09:21 22/02/2013

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Rugby League bosses have been told the game will generate AU$2 billion in revenue over the next five years - but ARL Commission chairman John Grant says that is not enough.

Grant presented the ARLC's 2012 financial report to a historic annual general meeting on Thursday of the 16 NRL club chairmen and their counterparts from the NSWRL and QRL, then provided them with budget estimates for the next five years.

Not surprisingly, the figures highlighted the poor financial state of the game under the previous joint venture between News Ltd and the ARL, and the vastly improved situation since the commission took control a year ago.

After generating only $185 million in revenue from broadcast rights, sponsorship and gate receipts last year, the ARLC's revenue is projected to increase to $284 million this year and $323 million in 2017.

Grant said that under the five-year, $1.025 billion broadcast deal, the game would earn $2 billion but only 10 per cent of that was not accounted for in expenditure.

''Our revenues in broadcast terms will more than double in the next year, and our commercial revenues are up by about 25 per cent so we are dealing with a lot more revenue, which is one of the reasons we have locked away $200 million in the growth fund over five years.

''Broadcast funding [including New Zealand television and a new media rights deal with Telstra] is just over $1.2 billion, and commercial revenue is about $800 million.

''That is about $2 billion, and of that amount 10 per cent only will go into our growth fund - and it is not enough.''

After inheriting a game with only $4.8 million in the bank, Grant said the ARLC aimed to put $40 million a year aside in a futures fund for big projects but he hoped that figure would be more.

According to the 2012 financial report, the first made public by the game's administration since the end of the Super League in 1997, the NRL received:

  • $101,563,667 from broadcast rights;
  • $39,919,406 from game receipts for finals matches and State of Origin; and
  • $14,022,212 from sponsorship.

Among the expenses in 2012 were:

  • $46.2 million in club grants;
  • $8 million in a one-off payment of $500,000 per club;
  • $69,079,584 in operational expenses;
  • $14,730,317 in marketing and media expenses, and;
  • $22,133,755 in administration expenses.

Between 2004 and 2012, the game's income grew by eight per cent a year but the ARLC has targeted 13 per cent annual growth for the next five years.

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''The point we made to all of our commission members is that it [$200 million] is not enough, and we need to generate more revenue so that is one of the things that we are chasing,'' Grant said.

''That is why digital [media] is important, that is why new sponsorships and new properties and creating new events are important.

''When you do the numbers and how much we spend, $200 million is what is left. It just speaks to the paucity of this game prior to this latest revenue rights [increase].

''This game has been run on the smell of an oily rag, and there has been nothing in the bank and no investment in the future. Yet it has been as successful as it has been.''

- Sydney Morning Herald

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