NRL applying for $30 million loan.

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Mr Invisible

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http://www.dailytelegraph.com.au/sp...n/news-story/cad6c05654e3252c04832894843a1dc3

Phil Rothfield, The Daily Telegraph
June 17, 2017 9:00pm

THE NRL has been forced to apply for a $30 million bank loan to pay for club funding agreements it could never afford.

Chief executive Todd Greenberg not only needs approval from the banks but also broadcasters Channel 9 and Fox Sports, who will act as “guarantors”.

This is the second injection of cash the NRL has needed in 2017, having already received a $50 million advance from Fox Sports to ease its cashflow problems.

The need for the $30 million loan has risen from the independent commission caving in to the 16 clubs on funding deals from 2018 onwards.


After 18 months of negotiations, commission chairman John Grant eventually guaranteed the clubs $13 million a year in annual grants at a cost of more than $1 billion over the five years of the broadcasting deal.

It saved his job and got rid of a no-confidence motion in his leadership.

Yet the NRL bean counters quickly discovered they won’t have the money when the first club instalments are due to be handed out in November.

Only the $30 million loan would ensure the clubs get what they were guaranteed.

It’s one of the reasons why Grant had no choice but to confirm he will leave in February at the end of his term.

Under the strategic plan that Grant published soon after the independent commission came into power, the game was supposed to have $200 million in the bank by 2017 in a future fund.

Instead, it has basically got nothing.

It’s not helping the NRL in that it still hasn’t sold the Gold Coast Titans or the Newcastle Knights to private owners.

Both clubs are losing about $2 million a year under the NRL’s ownership.

Also, the commission was forced to save a desperate St George Illawarra with a $6.5 million loan — money that still hasn’t been repaid.


The new $30 million loan will be paid off over the five years of the broadcast deal and will attract millions of dollars in interest.

Placing further pressure on the NRL administration is the ongoing negotiations with the Rugby League Players’ Association over its members’ future salaries.
 

Mr Invisible

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$80 million they need this year already... $50 million pissed down the drain it seems.

Suddenly John Grant jumping ship is making more sense.

Titans - Losing $2 million a season under NRL.
Knights - Losing $2 million a season under NRL.
St Merge - $6.5million unpaid loan.

NRL need to get serious with clubs.

Titans - Find a new owner by end of season or the club is disbanded and license up for grabs (maybe a Toowoomba or Logan side - or Sunshine Coast Team).
Knights - Find a new owner by end of season or club is disbanded and license up for grabs (Central Coast Bears anyone??)
St Merge - Pay the loan by end of season or bankrupt the club and send the license to Perth for a new team.
 

blueyedsamurai

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Titans - Losing $2 million a season under NRL.
Knights - Losing $2 million a season under NRL.
St Merge - $6.5million unpaid loan.
Its hard to believe that it was the Knights that won the super league war for the ARL yet now they're in shambles and can barely stay afloat.
 

DoggiesBoy

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With the money the NRL gets from TV rights, how on earth are they in a position they need bank loans? Even the 10 million they are paying for the titans, drugcastle and st merge is chicken feed compared to what they get for those TV rights. What a complete farce this independent commission is.
 

CroydonDog

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To me the salary cap needs and club grants need to be frozen for say 5 years until the game is back in the black. The clubs under nrls control need to be sold or fold, and loans paid back. The league should never own a team.
 

GoTheDoggies

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NRL squandered the money on the bunker haha what a joke.
 

Mr Invisible

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To me the salary cap needs and club grants need to be frozen for say 5 years until the game is back in the black. The clubs under nrls control need to be sold or fold, and loans paid back. The league should never own a team.
But wouldn't that limit players ability to earn a million a season, and see thme head off to ESL/Rugby?
 

Punchbowl Dog

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The elephant in the room for the last couple of years has been the unsigned club participation agreements. Apparently 11 clubs have not signed beyond this year and the unspoken threat by these clubs has been give us $13m a season plus representation on the board. I think there are a shitload of financial skeletons in the nrl closet, when the clubs get full access to nrl financials via board seats Grant won't want to be there as he presided over the commission since day 1. Even though it will no longer be an "independent" commission the independent directors will have a majority over 2 club appointees and nsw and qld appointees. I think eventually the clubs and states, via shrewd appointees, will have a massive influence on the nrl, whether thats good or bad or inbetween who knows maybe the new setup won't waste as much $$. I've always thought an "independent commission" was a bit odd, with people with no skin in the game running the game.
 

flamebouyant

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Are we really at all surprised?? The NRL has to be one of the most unprofessionally run sports in the world.
IIm saying this though, it looks as though they never got the full amount of the tv rights deal upfront, but instead in yearly installments, and this is why its all a little messed up.
 

doggieaaron

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Overly paid officials and alot of stupid "reports" blowing lots of $$
 

Alan79

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Going off the theory that print media will say anything they want these days to sell a $1 paper, this could be bullshit.

However if its not, you have to wonder how they've gotten into this mess. Are the salaries of the commission a contributing factor? Have those controlling the finances pissed the money away in bad investments?

The NRL should theoretically be in the best state it's ever been in.
 

c-b-b

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There's been parties willing to buy the Titans but they were ignored by the NRL. Then you get stories like this. Really makes you wonder.
 

Baseball Furies

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$80 million they need this year already... $50 million pissed down the drain it seems.

Suddenly John Grant jumping ship is making more sense.

Titans - Losing $2 million a season under NRL.
Knights - Losing $2 million a season under NRL.
St Merge - $6.5million unpaid loan.

NRL need to get serious with clubs.

Titans - Find a new owner by end of season or the club is disbanded and license up for grabs (maybe a Toowoomba or Logan side - or Sunshine Coast Team).
Knights - Find a new owner by end of season or club is disbanded and license up for grabs (Central Coast Bears anyone??)
St Merge - Pay the loan by end of season or bankrupt the club and send the license to Perth for a new team.
Pretty sure (from all reports at least) that the Knights are very close to being bought out by Wests Newacstle Leagues Club. A pretty powerful club that will guarantee them their future, think Canterbury Leagues, Panthers etc.

The others, I have no clue, but you're right, a tough stance needs to be taken here.
 

Oatley Dog

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I was kind of hoping at least someone would post on here something that would indicate they have some idea of cash flows and operating principles in large organisations. Sadly I was disappointed. There is nothing at all unusual in an organisation borrowing cash to ensure they can meet their commitments, due to the timing of revenue streams and expense payments. The NRL got into a little bit of trouble having to bail out a number of teams like Tigers, Dragons and Newcastle, in addition to taking over the Titans. The TV rights payments and sponsorship agreements are all annualised which means that the NRL gets a continuing stream of income but obviously only proportional to the length of the contract. At different times of the year the NRL is required to make payments requiring cash to do so, but if that is out of sync with the income then they need to get cash from elsewhere to cover it. No big deal really. That's not to say that during the David Smith era money didn't leak out of the joint that would've reduced the need to borrow. In fact the last year of the TV contract was already spent before the year started due to Smith's poor management, but to his credit, Greenberg has spent a fair bit of time and effort making the necessary cuts to bring things back into alignment. People seem to continually overlook the fact that the $1.8b TV deal is from 2018 onwards. We are still in the contract period of the $900m deal which is substantially less. Most of this "noise" is a combination of News Ltd carrying on like schoolgirls and the argy bargy of the salary cap negotiations. Once the debt ridden teams are offloaded to other buyers the NRL will be in an even stronger financial position.
 
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