During this NRL season, the most conspicuous red smear has not been the blood wiped across the face of the prop who has copped a stray elbow. It’s been the sea of red ink covering the game’s ledger.
Australian Rugby League Commission chairman Peter V’landys has done a wonderful job keeping the competition running and, particularly, boosting the game’s morale in the most trying circumstances. But Pugnacious Pete is an inspiring wartime leader, not a human ATM.
The NRL expects to lose $150 million this season, most notably from the media-rights money lost when its deals with Nine and Fox Sports were renegotiated. Those losses extend into future seasons.
Meanwhile, competition leader Penrith revealed last month it would bleed $12 million in ticket sales and other projected revenue during a season that would normally fill the club’s coffers. Presumably, others have fared even worse.
Like society itself, it has been possible for rugby league to suspend thoughts of the future and the long-term economic havoc the pandemic will cause.
Struggling clubs have continued to sack coaches and pay out their lavish contracts, perpetuating just one of the profligate practices that had left the game more vulnerable to a sudden change of fortunes than it should have been given its media-rights riches.
But now the season is coming to an end, the bills are hitting the in-trays and axes are being sharpened.
The NRL’s announcement on Monday it would sack 25 per cent of staff to save $50 million had been anticipated.
But it is no less brutal when the human cost is revealed.
So, when a report was tabled valuing the NRL at up to $3.1 billion — as reported in The Australian on Monday — you can imagine the eyes of NRL and club officials lit up like smokers after a long-haul flight.
Beyond the valuation, the details of a potential injection of private equity capital are scant. Most notably, there is so far no thought of what control the game would forfeit for the cash that would allow it to continue business (pretty much) as usual.
Private equity investment in sport has become more common as other sources of revenue have been ravaged by COVID-19 restrictions.
The Italian Serie A and the English Cricket Board are just two organisations to have recently considered a revenue source that has traditionally been out of bounds.
In Australian sport, the potential influence of private investors has usually been considered contrary to a peak sporting body’s traditional standing as a not-for-profit organisation acting in the best interests of the sport as a whole.
So when the ARLC or the administration of any other sport ponders selling a stake in its operations, a pressing question arises: Is the sport (or even the peak league) theirs to sell?
You might argue the NRL belongs to the fans who monetise the game through their viewing habits; the clubs who continue to pull the strings for better or worse, or even the now-more-empowered players who are paid a percentage of the game’s revenue rather than mere weekly wages.
But if the actual deed to rugby league is hard to locate, there remains that vague general belief rugby league is owned by and on behalf of its various stakeholders, including the grassroots clubs and participants at the foot of the game’s trickle-down economy.
So what happens when you introduce another cashed-up but far less passionately invested owner? One with a sharp eye on profit projections and not much concern about whether the Canterbury Bulldogs can get out of the cellar or the local juniors can put a junior team on the park?
What promises would need to be made about financial accountability and profitability by a game that has, by its own admission, run a billion-dollar business like a cash bar at a suburban club to get a hand on those investor billions?
Even after the redundancies at NRL headquarters, you can assume there will be more cutbacks across NRL clubs and the game itself. Grassroots programs will suffer, as will potential growth areas such as women’s rugby league.
The ARLC might contend this will allow it to present to investors a lean competition with a large component of its media-rights contract locked in, one with the capacity to grow significantly when the COVID-19 restrictions are lifted.
But clubs that see private-equity cash as an immediate solution to their current financial plight should be wary.
The kind of investors with a spare billion or two will be far less sentimental than the local sponsors who pay over the odds to drink beer with club executives in corporate boxes and mingle with players in the sheds or at the annual dinner.
They certainly won’t have the same historical attachment to each of the nine remaining Sydney NRL clubs struggling to make ends meet in an intensely crowded sporting market.
You might argue the ARLC is desperately in need of the kind of bookkeeping accountability a major private investor would insist upon. That a billion-dollar game can’t prosper with its nickel-and-dime economy.
But before cashing private equity cheques, the ARLC and its stakeholders would do well to remember the next time potential belt-tightening measures including mergers and relocations are on the table, it would not just be the old club warlords and rugby-league-loving NRL administrators who are deciding the fate of the century-old game.