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NRL records $12.5 million loss despite record revenue
The financial fortunes of the National Rugby League saw a $39 million reversal in the year ended 31st October 2015.
Despite record revenues of $334 million, for the past financial year, going from a $20 million surplus the previous year to an $18.7 million loss in 2015 – largely as a result of propping up the Gold Coast Titans and Newcastle Knights, both of which are owned by the NRL, and supporting state associations in Western Australia, South Australia and Victoria.
Anticipating further losses for the next two seasons, Australian Rugby League Commission (ARLC) Chair John Grant told Brisbane newspaper The Courier Mail that the governing body sustaining losses is part of the strategic plan to grow the game.
Grant explained “we have moved from a phase of accumulation to distribution, which was always the plan during the five-year (broadcast rights) cycle.
"So we are on track. What the results show us is that in terms of income, we are just as attractive to the broadcasters as the AFL but there is a still a significant gap in terms of sponsorship and commercial income.
“That is where we think the opportunity exists for us to further grow."
The league signed a record five-year $1.8 billion deal with Nine Entertainment Co, Fox Sports and Telstra late last year, which will begin after the current contract expires at the end of the 2017 season.
In the last year the NRL’s broadcast revenue was around $205 million while non-broadcast revenue was up 9% to $129 million.
Operating expenditure rose $19 million to $127 million, including a $12 million increase for event, game and sponsorship expenses to $71 million. Administration costs rose about $2 million to $23 million and the 16 clubs received $219 million in distributions, up $26 million.
Grant said the league had identified costs that could be stripped out of running events such as State of Origin and that the sustainability or future fund now worth $52.8 million, would remain untouched.
In advance of the new broadcast deal, Grant said $50 million of the new deal would be brought forward in the next two years, $48 million of which would flow to the clubs – which will also receive 130% of the salary cap from 2018.
Grant added “(this) means all the clubs should be profitable from then on.”
South Sydney and Brisbane Broncos are the only Australian-based NRL clubs to record profits.
Among loss making clubs, the Australian Financial Review recently revealed that 2015 premiers North Queensland Cowboys made a $360,000 loss despite their grand final win.
The NRL’s distribution of funds increased from $193 million to $219 million with clubs receiving an 11% boost and the NRL now boasts $52.8 million in a “sustainability fund”.
Grant added “in our thinking and maturity we’re behind the AFL but we’re not far behind.
“We used to be 15 years behind. Three years ago we were 10 years behind. Now we’re not that far in terms of the maturing of the clubs’ views, amount of money flowing into the game and how we’re spending that.
“It’s good. We’re learning something all the time and learning quickly in the clubs and NRL.”
Lower image: John Grant
3rd December 2015 - NRL CLUBS AGREE NEW FUNDING DEAL
27th November 2015 - NRL ANNOUNCES $1.8 BILLION BROADCAST DEAL WITH FOX SPORTS AND CHANNEL NINE
20th October 2015 - DAVE SMITH TO LEAVE NRL AFTER THREE YEARS AS CHIEF EXECUTIVE
11th August 2015 - NRL SECURES NEW FREE TO AIR TELEVISION DEAL
27th February 2015 - AUSTRALIAN RUGBY LEAGUE POSTS $49.9 MILLION NRL PROFIT
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