Off the Wall

  • by
  • February 16 2010 9:04AM

Readers of this column will not have been surprised at today's news that the income Sydney based NRL clubs received from their licensed clubs has been cut by more than a third since 2005.

My only surprise, as one who raised the issue constantly, is the extent of the decline.

In 2005 Sydney based NRL clubs received payments of around $28.8 million from their licensed clubs, principally through the profits derived from poker machines. This year those payments will total just $19.1 million.

When you take into account inflation and rising costs, the real value of the licensed club contribution to the nine Sydney based NRL clubs has declined by closer to 50 per cent.

In 2007, the St George Illawarra Dragons benefited to the tune of $4.5 million from its licensed clubs. For this season, the grant is just $2.9 million. In 2005 Penrith received a $6 million grant or subsidy from its leagues club profits - this year it is just $3 million.

But even these dramatic decreases, and their impact on all levels of football club activity, mask the full extent of the problem. Many district junior clubs and teams rely on revenue from their local leagues clubs - and that has been on the decline as well.

The licensed club sector has been hit by a combination of factors - higher state taxes, and the impact of the economic downturn foremost among them.

Whilst licensed clubs in Queensland have not had the same tax impost to contend with, times are tough for most clubs right across Queensland as well as New South Wales.

The immediate question is simply this - is relief in the form of taxation reductions on the way?

New South Wales will go to the polls in March next year. The NRL, and the clubs, need to be seeking at least some taxation relief from the major parties now. I know that has been sought in the past, but the latest figures strengthen the case.

There is another reason why the NRL and clubs need to be very active. The anti-poker machine lobby is well organised, and has some powerful supporters in Canberra - led by Senator Nick Xenophon who was elected to the Senate from South Australia with an anti-poker machine platform. He has a chance of having a supporter elected at this year's federal elections.

So I am pessimistic about any significant tax relief being granted, and even if it is profits probably won't return to their former levels because club patronage is definitely on the decline.

The only way the NRL, and the games stakeholders across the board, are going to secure the financial base of all NRL clubs is to secure a better post-2012 free and pay television rights agreement. If that happens, they payments to clubs can be increased and the salary cap raised.

Sponsorship helps, but these are tough times when it comes to attracting sponsors.

Today's story simply re-enforces the seriousness of the financial situation facing a majority of the NRL clubs.

Tomorrow's story needs to be that the ARL, NSWRL and QRL will work with News Limited and the 16 NRL clubs to deliver an independent commission and a streamlined and less costly administrative structure that can give priority to securing the game's financial future!

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