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A very clear message emerged from day one of the NRL annual clubs conference yesterday - expansion beyond the current sixteen team premiership is now further away than ever.
Within a matter of months the NRL will effectively be run by the 16 current clubs, so the views expressed yesterday on expansion - and apparently they were unanimous views - are the views that count.
I would love to see a PNG team in the premiership - and I hope it will happen - but the reality is any expansion is not going to happen before the new television agreement starts in 2013. That will disappoint the proponents of a Central Coast team, the most logical area for premiership expansion to take place in.
The NRL is going down a very different course to the AFL - which is using its substantial cash reserves to establish teams in Western Sydney and on the Gold Coast to boost its television audience as it negotiates a post 2011 television rights agreement.
The NRL, or more particularly the 16 clubs, believe that consolidation, not expansion, has to be league's priority. There are risks in that approach, but one has to concede there are also valid reasons for consolidation and caution. The reasons may be summarised thus;
- A significant number of NRL clubs, principally Sydney clubs, remain in some financial difficulty, or at least uncertainty. Expansion would see a wider sharing of television rights and other revenue. The clubs who will soon own the game are very much aware of just how precarious finances remain.
- There is real uncertainty about several revenue streams the game is increasingly relying on. I have no doubt that by 2013, alcohol sponsorship of sport, and alcohol advertising, will be on the way out. Aspects of it may already be prohibited. The advertising of gambling, including sports betting, may well be restricted, and poker machines - which still contribute to the finances of many clubs - will be under pressure from the anti gambling lobby as well.
- Even an expanded premiership might not attract the additional television rights revenue that would be needed to help fund new clubs. The uncertainties about television rights cannot be ignored. We will be negotiating after the AFL, and when you look at the balance sheets of Nine and Ten in particular, neither the AFL nor the NRL can expect the generosity of the last negotiations (especially those of the AFL thanks to Kerry Packer) to be repeated.
- There is a welcome admission in David Gallop's comments after yesterday's meeting that the game has to focus on junior development, especially in the areas where the AFL is targeting. One hopes that whatever savings one administration (if it ends up being one administration) delivers are put into junior development, and saving the game in regional areas.
By ruling out expansion for at least five years - and probably more - the clubs may be putting at some risk the game on the NSW Central Coast in particular. But that has been an issue for some years as it is - and one hopes the NRL keeps an open mind on post-2013 expansion.
If one of the existing clubs folds - and there are a couple that clearly still face significant financial and other challenges - the NRL will need to urgently consider a NSW Central Coast team joining the premiership to maintain a 16 team competition. Maintaining the enthusiasm of the Central Coast league supporters, and sponsors, needs to be a priority.
The message emerging from yesterday's conference is clear - the game continues to face significant challenges, and especially financial challenges. There are risks in sticking with a 16 team only strategy. But the uncertainties I have mentioned probably mean those risks simply must be taken.