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Melbourne's Profitability

Discussion in 'Rugby League Forum' started by Canteen Worker, Aug 2, 2008.

  1. Canteen Worker

    Canteen Worker Well-Known Member 2016 Tipping Competitor

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    Worth noting that the SMH today reports the Storm as still losing $5 - $8 million a year. The report was in the context of a push to change the structure of the body administering League - in the context of News Ltd still trying to run the game to pay off the millions expended in the SuperLeague debacle it chose to enter into.

    It is little wonder so many decisions seem to favour this team - can you imagine how much more they would lose if they were not successful.

    It makes a joke of the talk of moving teams to places that are not Rugby League strongholds. Adelaide, Perth etc are pipedreams and will never happen. Central Coast and QLD are the only areas worth pursuing.
     
  2. c_eagle

    c_eagle Member

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    How many millions have the swans lost over the last 26 years? It takes this amount of time and money for that kind of investment to pay off. $5-8 million a year may be a lot less than the benefit the NRL gains from its sponsors for having a presence in Melbourne.

    And yeh, I believe Rugby League needs to invest this amount of money in other regions in order to grow the game.
     
  3. Corso_Pete

    Corso_Pete Well-Known Member Premium Member 2016 Tipping Competitor

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    How can a club have a such a large shortfall? Most clubs have an operating budget of around $14m - $15m. It is reasonable to assume that Melbourne's budget is similar.

    Judging by their jerseys and signage at their ground they appear to have adequate sponsorship, Their crowds, whilst never spectacular seem to be solid around the 10,000 mark. Of course the value of their sponsorships may well be the answer to the question, if that is the case then you would have to have question the long term viability of the Storm.

    In terms of national sponsorship of the NRL, at the moment Telstra, what value are they getting from the limited exposure they are receiving in Melbourne. News Limited will eventually pull out of the ownership of Rugby League and presumably the Storm at around the same time. You do not have to be Houdini to work out what will happen to the Storm when that happens. 
     
  4. c_eagle

    c_eagle Member

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    Melbourne have the second biggest jersey sponsorship portfolio. Apparently Telstra have told the NRL that without a presence in Melbourne, they wouldn't have come aboard as sponsor.

    From what I gather, the Storm need to be profitable by circa 2012, when their new stadium is up and running. I think this is too soon. The AFL would never pull the plug on an expansion project because they know that you need to lose money for a long period of time before reaping the full reward.

    That's the difference between the attitude of Rugby League and the AFL. Which has worked?
     
  5. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

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    Melbourne must be supported.  If not then let's just play with a boutique game which will, in the long term, wither under the onslaught of the other codes.  Expansion is the key.  Just look at union to see that super 14 is the blueprint for forward progress.  Sure clubs will lose money but all businesses do when they go into foreign markets.  If Gallop can't see this then he's a moron.  Private ownership, sponsors, are the way forward.  If Delmege withdrew support for us we'd fold, and it's the same with the Storm.
     
  6. Matabele

    Matabele Well-Known Member

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    All the hoo ha about the salary cap.  But what do you think the grant to clubs would be if News Ltd weren't gouging most of the "profits" out of the game, and what would the salary cap be then?
     
  7. ManlyBacker

    ManlyBacker Winging it Staff Member

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    RL definitely needs Malbourne to be in the comp. Their supporters are a solid group who spend huge amounts on merchandise. I am surprised by the amount they are losing. Much as I hate them it would be a dark day if they were let go.
     
  8. Corso_Pete

    Corso_Pete Well-Known Member Premium Member 2016 Tipping Competitor

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    I have no problem with Melbourne being in the comp. From the responses here it seems that there sponsorship arrangements are better than average so why are they losing so much?

    Manly's shortfall last year was only $200K. That is a big difference to the Storms loss of $8m when you consider that both teams last season were on par, well almost anyway.

    When News Limited depart there are not that many benefactors in Australia that would be prepared to continue pumping huge amounts of cash into a club, that on the surface is a financial basket case.
     
  9. Matabele

    Matabele Well-Known Member

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    I suppose they would blame it on their travel costs.

    But have a look at their playing roster and work out how they do it for $4m..............
     
  10. Corso_Pete

    Corso_Pete Well-Known Member Premium Member 2016 Tipping Competitor

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    Travel Costs!!!!!!!!!!!!!! Cowboys, Warriors seem to cope.

    The salary cap, well that may be a different issue, they seem to be fined each year for some cap indiscretion yet they never seem to suffer a penalty (other than a fine)

    I am not into any conspiracy theories but the Storm do tend to push my limits. 
     
  11. weev

    weev Well-Known Member

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    Why is the Storm spending so much?

    My guess is its because there is no salary cap for coaching and training staff, administrators, recruitment costs, facilities, and wrestling experts.

    Simply put, the Storm have deep pockets. The owner of the team, News Ltd, also co-owns the whole code, which raises issues of ethics and fair play. But that's a different story!
     

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