Matabele
Journey Man
AFTER three successive years of $1 million losses, Manly are set to break even this season.
The Sea Eagles, 80 per cent owned by Penn Sport and Max Delmege, have done so on a reduced leagues club grant of $450,000 - less than half that of previous years.
It's a scenario other Sydney clubs will face as the impacts of the NSW Government's increased poker machine tax and indoor smoking ban take hold. Gone are the days of football clubs simply relying on their licensed arm to cover whatever financial shortfall they have incurred - about $5 million a year for some - at the end of each season.
But there's no reason such changes should lead to a drastic round of cost-cutting as clubs look to balance the books.
Manly, South Sydney and Newcastle all operate on little or no leagues club funding but have found other ways of generating revenue. For the Knights, it's been through attracting big sponsorship deals - such as the $1.5 million deal with Coal & Allied announced last week - and maintaining arguably the code's strongest supporter base.
The Sea Eagles and Souths have each sold a majority interest in their club to private investors, whose profiles and business connections are able to open doors.
"It takes about $12 million each season to be competitive, so we've had to look at how we can leverage the Sea Eagles brand and make the most out of the portfolio of assets within the club," Penn Sport director Scott Penn said. "For the past few years, we've been down the bottom of the pile in terms of merchandising and gate receipts, and we've posted a series of big losses. But this year we will be just shy of breaking even, and with our funding from Manly Leagues Club reduced from $1 million to $450,000, that's a $1.5 million turnaround."
Manly officials are working on a number of projects to generate income outside their 12 home games a season under the title Sea Eagles Enterprises. But the club's biggest hurdle is the state of Brookvale Oval, which has limited facilities for corporate sponsors.
In contrast, Souths - under the control of Russell Crowe and Peter Holmes a Court - even have a milk sponsor, Murrumbidgee Dairy, for their home games at Telstra Stadium.
"One of the problems with rugby league is people saying we can only sell so much," Rabbitohs chief executive Shane Richardson said. "But we have to look outside the box because we don't have a leagues club to prop us. For example, we held a Business Connect forum on Wednesday that was attended by over 200 sponsors and business people, who were able to network with each other.
"Then there's the South Side Story documentary on ABC-TV. That's potentially very risky because we had no editorial control, but whereas Friday night football averages an audience of about 500,000 viewers, the first episode was watched by 770,000 people. That's great exposure for our club and our sponsors."
Gold Coast Titans, the NRL's newest team, are also privately run, and their introduction this season has bought an estimated $15 million in new revenue to the game.
Titans managing director Michael Searle revealed the club was close to finalising a deal for a leagues club that would also include a property development.
But the Titans' main source of income next year is going to come from the yet-to-be-completed Skilled Stadium at Robina.
As for whether more clubs are going to go down the privatisation route, Penn and Richardson say it is inevitable but former Warriors chief executive Mick Watson believes the future is in corporations owning teams rather than individuals.
"The model I think is the way of the future is the one they have in Japan, where corporations own teams," he said.
"To me, that makes sense because those corporations have a sustainable cash flow, sustainable resources, good governance principles and business experience."
Gallop said the NRL was "open-minded" to further privatisation.
"Certainly, the private owners we've had have bought with them new ideas to complement the traditional business model of football clubs," he said.
The Sea Eagles, 80 per cent owned by Penn Sport and Max Delmege, have done so on a reduced leagues club grant of $450,000 - less than half that of previous years.
It's a scenario other Sydney clubs will face as the impacts of the NSW Government's increased poker machine tax and indoor smoking ban take hold. Gone are the days of football clubs simply relying on their licensed arm to cover whatever financial shortfall they have incurred - about $5 million a year for some - at the end of each season.
But there's no reason such changes should lead to a drastic round of cost-cutting as clubs look to balance the books.
Manly, South Sydney and Newcastle all operate on little or no leagues club funding but have found other ways of generating revenue. For the Knights, it's been through attracting big sponsorship deals - such as the $1.5 million deal with Coal & Allied announced last week - and maintaining arguably the code's strongest supporter base.
The Sea Eagles and Souths have each sold a majority interest in their club to private investors, whose profiles and business connections are able to open doors.
"It takes about $12 million each season to be competitive, so we've had to look at how we can leverage the Sea Eagles brand and make the most out of the portfolio of assets within the club," Penn Sport director Scott Penn said. "For the past few years, we've been down the bottom of the pile in terms of merchandising and gate receipts, and we've posted a series of big losses. But this year we will be just shy of breaking even, and with our funding from Manly Leagues Club reduced from $1 million to $450,000, that's a $1.5 million turnaround."
Manly officials are working on a number of projects to generate income outside their 12 home games a season under the title Sea Eagles Enterprises. But the club's biggest hurdle is the state of Brookvale Oval, which has limited facilities for corporate sponsors.
In contrast, Souths - under the control of Russell Crowe and Peter Holmes a Court - even have a milk sponsor, Murrumbidgee Dairy, for their home games at Telstra Stadium.
"One of the problems with rugby league is people saying we can only sell so much," Rabbitohs chief executive Shane Richardson said. "But we have to look outside the box because we don't have a leagues club to prop us. For example, we held a Business Connect forum on Wednesday that was attended by over 200 sponsors and business people, who were able to network with each other.
"Then there's the South Side Story documentary on ABC-TV. That's potentially very risky because we had no editorial control, but whereas Friday night football averages an audience of about 500,000 viewers, the first episode was watched by 770,000 people. That's great exposure for our club and our sponsors."
Gold Coast Titans, the NRL's newest team, are also privately run, and their introduction this season has bought an estimated $15 million in new revenue to the game.
Titans managing director Michael Searle revealed the club was close to finalising a deal for a leagues club that would also include a property development.
But the Titans' main source of income next year is going to come from the yet-to-be-completed Skilled Stadium at Robina.
As for whether more clubs are going to go down the privatisation route, Penn and Richardson say it is inevitable but former Warriors chief executive Mick Watson believes the future is in corporations owning teams rather than individuals.
"The model I think is the way of the future is the one they have in Japan, where corporations own teams," he said.
"To me, that makes sense because those corporations have a sustainable cash flow, sustainable resources, good governance principles and business experience."
Gallop said the NRL was "open-minded" to further privatisation.
"Certainly, the private owners we've had have bought with them new ideas to complement the traditional business model of football clubs," he said.
