Expansion A 2nd NRL team in Melbourne...

[finders]

Thanks for picking up on that.... what I meant was they are closer to being financially viabile without News Ltd direct involvement than you think. 2 issues have hamstrung the Storm, lack of suitable venue and lack of FTA exposure. The new Melbourne Football Stadium means 1 of 2 issues are resolved. FTA coverage is the last major issue to resolve.

The Storm are a red hot team that is still on the up and should remain top 4 competitive for the foreseeable future, particularly in the early seasons of the new venue. Very difficult to attract people to Oly Park, and even harder to attract repeat patronage to a s/hole. When Victorians experience RL football at a rectangular shaped purpose built for RL football stadium, repeat patronage is far more likely.

So how come they were a miserable failure at Telstra Dome when they played there??

 

[griffnrl]

I think News Ltd can only afford to prop up one Melbourne based team. From an article in the SMH last July looking at the 2006 financials pf NRL clubs.

Get rich or die trying

Melbourne
End of October 2006

Total revenue: $14,098,000

Sponsorship: N/A

Gate takings: $549,000

News Limited grant: $13.11 million

Loss: $781,798

...

So 2 teams in Melbourne will need about $25mil per year from News Ltd.

The figures make it look like News Ltd grant the Storm 13 million, but that isn't strictly true, due to the unusual way the club is set up.

If you look at their balance sheet Melbourne have no sponsorship revenue, but we all know that they have a suite of sponsors paying quite considerable money.

The News Ltd funding is in the form of a sponsorship guarantee (this was actually standard practice with the way Super League clubs were to be funded). That is News Ltd guarantee that sponsorship will reach a certain point, and if it doesn't they provide the shortfall.

However how it works is that have the management rights to the sponsorship properties from the Storm, and then on-sell the various properties to different sponsors (Medibank, Hostplus, Jayco, etc). So the sponsorship revenue that the Storm get is paid to News Ltd, not the Storm. News Ltd are only out of pocket for the difference between $13.11m and whatever revenue Melbourne actually bring in.

 

[Aucklander]

[/B]
So how come they were a miserable failure at Telstra Dome when they played there??

He said a "rectangular shaped purpose built for RL football stadium" not a stadium designed for Aussie Rules and Cricket.

 

[genghiskhan]

He said a "rectangular shaped purpose built for RL football stadium" not a stadium designed for Aussie Rules and Cricket.

Docklands was built for the rugby codes and soccer. They just wanted Aussie rules to pay for it.

There is a lot of wishful thinking in rugby league that if you build it they will come. History shows us that even if you build it they won't come. Just think about the Sydney Football Stadium. It was purposely built for rugby league because apparently the SCG just wasn't suitable. Nowdays, only the Roosters play on the stadium, and they still can't draw a decent crowd. South Sydney even wanted to redevelop Redfern Oval rather than play on it.

 

[Aucklander]

Docklands was built for the rugby codes and soccer.

I've watched both codes of Rugby at Docklands and there is no way you'll ever convince me it was built for them.

Great for Aussie Rules and Cricket, but not much else. Even soccer is hard to watch at the venue.

 

[genghiskhan]

I've watched both codes of Rugby at Docklands and there is no way you'll ever convince me it was built for them.

Great for Aussie Rules and Cricket, but not much else. Even soccer is hard to watch at the venue.

Not much use arguing this point now. Melbourne is getting its stadium designed specifically for union, soccer, and league so we will soon be able to see whether the low crowds stem the quality of the stadium or something about the sports themselves.

 

[Aucklander]

Not much use arguing this point now.

True enough. You only have to visit the stadium for proof.

Melbourne is getting its stadium designed specifically for union, soccer, and league so we will soon be able to see whether the low crowds stem the quality of the stadium or something about the sports themselves.

So long as I'm comfortable, don't have to go to stinking filthy toilets, wait in long cues for food and drinks and be able to actually view the game properly, I couldn't care less how many people turn up.

 

[JF_Bay_22_SCG]

same arguments apply surely.... local derbies bringing bigger crowds and the hope that one of the two teams are always in the top 4 or thereabouts. more clubs in the city spending more money on promotion at all levels.

I think there would be better-placed teams to have a new side. Personally seeing the success of the Gold Coast Titans I think they'd get far more benefit of having a team in western Brisbane to take on the arrogant Broncos well & truly.

Plus I think they have to start looking at reversing the damage done to the code by News Limited by having teams in WA & SA again too. Then RL can seriously look to be seen as a proper national competition again.

JF

 

[JF_Bay_22_SCG]

True enough. You only have to visit the stadium for proof.



So long as I'm comfortable, don't have to go to stinking filthy toilets, wait in long cues for food and drinks and be able to actually view the game properly, I couldn't care less how many people turn up.

But you have to admit standing on mud in the freezing rain & wind at Storm games with your view blocked by advertising balustrades is not going to win horribly many fans to RL.

I swear, even under cover in the eastern stand I serious froze my gonads off watching a couple of those night games at the Graveyard last year. Even the skeletons were asking for blankets & hot water bottles at times.

JF

 

[JF_Bay_22_SCG]

Docklands was built for the rugby codes and soccer. They just wanted Aussie rules to pay for it.

They did build it to be multi-functional, as there is the facility to bring the seats in to accommodate rectangle field sports. But I think the AFL, the senior partner in the stadium, used their bullying rights to pressure the facility to keep it in its oval configuration using the old chest nut of it affecting the grass.

They did have one rugby league test match at the ground (notably outside AFL season) & it seemed to go ok.

Will the AFL going to own the ground before too long, it is best for other sports to look elsewhere. As the all-mighty AFL are masters at intimidating other codes for their own benefit.

JF

 

[JF_Bay_22_SCG]

There is a lot of wishful thinking in rugby league that if you build it they will come. History shows us that even if you build it they won't come. Just think about the Sydney Football Stadium. It was purposely built for rugby league because apparently the SCG just wasn't suitable. Nowdays, only the Roosters play on the stadium, and they still can't draw a decent crowd. South Sydney even wanted to redevelop Redfern Oval rather than play on it.

Any why is that? Because the SCG Trust charged such pathetic rents to sporting clubs, thinking that they were going to never leave.

Telstra Stadium basically offered the ground to Souths for under cost price I hear, hence they went there instead of staying at Moore Park.

Remember the arrogance of the SCG Trust knows no bounds. This is the organisation that took 15 years to realise the SCG was NOT competitive with other grounds in terms of facilities & decided to belatedly re-build. This is the ground that said they had the perfect purpose-built facility for cricket yet refused to increase the ground size to suit its major tenant the Sydney Swans. This is a ground that thinks it is ok to charge people $20 to park on dirt outside the ground, then get caught in a traffic jam afterwards.

JF

 

[Dasher39]

But you have to admit standing on mud in the freezing rain & wind at Storm games with your view blocked by advertising balustrades is not going to win horribly many fans to RL.

I swear, even under cover in the eastern stand I serious froze my gonads off watching a couple of those night games at the Graveyard last year. Even the skeletons were asking for blankets & hot water bottles at times.

JF

It's not called the Graveyard for nothing.

As both a Victory and Storm member, I cannot wait until the new stadium is built so I can watch both my teams in a purpose built, state of the art and modern stadium.

The breeze you get from behind the Nikau Stand at OP is bloody freezing on those cold winter nights. OP just isn't an inviting venue. The only General Admission is the uncovered standing room. How many families are going to want to take their kids along to stand all night in the freezing cold.

At the new stadium they'll have the best facilities, be undercover and have a seat. I have no doubt that Storm attendances will go up when the new stadium is built, not sure by how much but they will go up, especially with the Storm becoming increasingly popular in Melbourne.

Oh, and for anyone to say that Telstra Dome was built for Rugby (League or Union) and Football (read Soccer) has ****ing rocks in their head. It was originally intended to be a rectangular stadium to be used for the Sydney Olympics, but when no investors could be found (hardly a surprise given the "strength" of both codes in Melb at the time) they pretty much begged the AFL to come on board. The AFL did and thus it became an oval and to satisfy Rugby and Football they incorporated the worst retractable seating possible. Retractable seating that is never used.

Bring on Swan Street Stadium!

 

[Aucklander]

But you have to admit standing on mud in the freezing rain & wind at Storm games with your view blocked by advertising balustrades is not going to win horribly many fans to RL.

I swear, even under cover in the eastern stand I serious froze my gonads off watching a couple of those night games at the Graveyard last year. Even the skeletons were asking for blankets & hot water bottles at times.

JF

OP is a hole. An insult to those of us who call ourselves sports fans.

 

[Aucklander]

It's not called the Graveyard for nothing.

As both a Victory and Storm member, I cannot wait until the new stadium is built so I can watch both my teams in a purpose built, state of the art and modern stadium.

The breeze you get from behind the Nikau Stand at OP is bloody freezing on those cold winter nights. OP just isn't an inviting venue. The only General Admission is the uncovered standing room. How many families are going to want to take their kids along to stand all night in the freezing cold.

At the new stadium they'll have the best facilities, be undercover and have a seat. I have no doubt that Storm attendances will go up when the new stadium is built, not sure by how much but they will go up, especially with the Storm becoming increasingly popular in Melbourne.

Oh, and for anyone to say that Telstra Dome was built for Rugby (League or Union) and Football (read Soccer) has ****ing rocks in their head. It was originally intended to be a rectangular stadium to be used for the Sydney Olympics, but when no investors could be found (hardly a surprise given the "strength" of both codes in Melb at the time) they pretty much begged the AFL to come on board. The AFL did and thus it became an oval and to satisfy Rugby and Football they incorporated the worst retractable seating possible. Retractable seating that is never used.

Bring on Swan Street Stadium!

Well said.

 

[RussellEbertHandball]

The figures make it look like News Ltd grant the Storm 13 million, but that isn't strictly true, due to the unusual way the club is set up.

If you look at their balance sheet Melbourne have no sponsorship revenue, but we all know that they have a suite of sponsors paying quite considerable money.

Erh sorry to be technical but it is their profit and loss and more particular the notes to the financial statements that is likely to reveal this. The Balance Sheet wont reveal anything about sponsorship. What it will reveal in the Storms case is that News Ltd has contributed a lot of capital and/or their is a deficiency of net assets.

The News Ltd funding is in the form of a sponsorship guarantee (this was actually standard practice with the way Super League clubs were to be funded). That is News Ltd guarantee that sponsorship will reach a certain point, and if it doesn't they provide the shortfall.

However how it works is that have the management rights to the sponsorship properties from the Storm, and then on-sell the various properties to different sponsors (Medibank, Hostplus, Jayco, etc). So the sponsorship revenue that the Storm get is paid to News Ltd, not the Storm. News Ltd are only out of pocket for the difference between $13.11m and whatever revenue Melbourne actually bring in.

That makes sense give this statement in the SMH's summary of the Storms position. Do you know how much they receive in sponsorship?

Television exposure is critical to the Storm's acceptance in AFL heartland, but recent research has shown the Storms' sponsors are the fourth-most recognised behind Essendon, the Broncos and the Fremantle Dockers.

Bottom line is that the Storm have to start making decent income from gate takings and season ticket/membership sales. I don't think that News Ltd can sustain this sort of subsidy for a couple of decades especially if they ever get out of the NRL partnership with the ARL.

 

[RussellEbertHandball]

Oh, and for anyone to say that Telstra Dome was built for Rugby (League or Union) and Football (read Soccer) has ****ing rocks in their head. It was originally intended to be a rectangular stadium to be used for the Sydney Olympics, but when no investors could be found (hardly a surprise given the "strength" of both codes in Melb at the time) they pretty much begged the AFL to come on board. The AFL did and thus it became an oval and to satisfy Rugby and Football they incorporated the worst retractable seating possible. Retractable seating that is never used.

Bring on Swan Street Stadium!

Recently I dug out a 43 page booklet the AFL produced on Docklands Stadium in 2000, to use in a discussion about a new stadium in Adelaide (on both the Adelaide and Port boards), even before the lastest announcement by the SANFL. It talked about moveable seats at the Stadium. I've never noticed them moved for any soccer, RL or RU matches I have seen played at the TD on TV. Do they actually move? If so why haven't they ever moved them? For technical reasons or administration reasons, ie save $$$? Are they worried it will destroy the grass?

 

[RussellEbertHandball]

From the 43 page booklet the AFL produced on the Docklands Stadium in 2000.

History of Colonial Stadium.

In mid 1996 the AFL Commission began giving consideration as to how it would be involved in a stadium being planned by the Victorian Government for the development and funding by a private consortium.

This stadium was to be developed as a multi-purpose venue, intended to host rectangular sports rugby league, rugby union and soccer.

The Commission reasoned that if a new state of the art sports stadium was being built in Melbourne, the possibility of playing AFL matches should be explored. Various sites were considered for the stadium, including the Showgrounds, St Kilda and Olympic Park before the Government decided upon Docklands.

Discussions continued throughout 1996 and progressed to a point in late January 1997, when serious negotiations focused on the project of the AFL becoming the prime user of the stadium.

In March 1997, the AFL Commission announced that it concluded negotiations with the Melbourne Docklands Authority to acquire the unencumbered freehold title to what has become Colonial Stadium. The AFL contacted no less than 35 matches a year for Colinial Stadium from the year 2000,........

Owning the Stadium

By December 31, 2000, the AFL will make a payment of $30 million to the consortium which developed the stadium and, in 25 years will acquire the unencumbered title to freehold land and buildings comprising the Stadium and the businesses attached to the stadium.

I think the $200mil to $250mil cost I recalled was for a rectangle un-roofed stadium. Once the AFL committed, the costs went up and Graeme Samuel went to work to come up with his finance package that was such a winner for the AFL. The stadium cost $430mil in the end to build. The stadium was 100% privately financed. I think the government gave the land for free as it was part of kick starting the Docklands precinct development.

 

[Dasher39]

It talked about moveable seats at the Stadium. I've never noticed them moved for any soccer, RL or RU matches I have seen played at the TD on TV. Do they actually move? If so why haven't they ever moved them? For technical reasons or administration reasons, ie save $$$? Are they worried it will destroy the grass?

They have only been used three times that I can recall.

1) Melbourne Storm vs Brisbane Broncos (around 2001)
2) WWE Global Warning Tour (2002)
3) Australia vs NZ - RL Tri-Nations Series (2006)

Here is a few pics of the seats moved out prior to the RL Tri-Nations game in October 2006. The main reason given for the lack of movement is the damage it does to the grass, plus you also lose about 5000 seats from the capacity, because as you can see you lose the corners of the ground.

And here are some photos from the actual game so you can see what it's like with people in it.

The only problem I have comes from the last pic in which you can clearly see behind the stands that are moved in and the fact there is nothing in the corners.

 

[griffnrl]

Erh sorry to be technical but it is their profit and loss and more particular the notes to the financial statements that is likely to reveal this. The Balance Sheet wont reveal anything about sponsorship. What it will reveal in the Storms case is that News Ltd has contributed a lot of capital and/or their is a deficiency of net assets.

ok true, not the balance sheet, I meant the figure that don't show anything for sponsorship:

Melbourne
End of October 2006

Total revenue: $14,098,000

Sponsorship: N/A

Gate takings: $549,000

News Limited grant: $13.11 million

Loss: $781,798

I was just trying to explain the reason for not having any sponsorship revenue and appearing to have a very large News Ltd grant.

That makes sense give this statement in the SMH's summary of the Storms position. Do you know how much they receive in sponsorship?

I don't have those figures. I would imagine total revenue that News Ltd receives through the Storm would be about 10-11 million (sponsorship plus distributions from the NRL, etc) meaning they run at about a 2-3 million dollar loss if you don't count the News Ltd subsidy.

Bottom line is that the Storm have to start making decent income from gate takings and season ticket/membership sales. I don't think that News Ltd can sustain this sort of subsidy for a couple of decades especially if they ever get out of the NRL partnership with the ARL.

News Ltd are actually ahead on the deal. They take out $8m from NRL profits every year, and are out of pocket at the most $3m on the Storm. They are still $5m in the black. Once News exit the NRL, the NRL could just take over that role of subsidising the Storm directly - and would be $5m up on their current position.

I also think once they move to the new stadium crowds and revenue will increase substantially.

 

[RussellEbertHandball]

They have only been used three times that I can recall.

1) Melbourne Storm vs Brisbane Broncos (around 2001)
2) WWE Global Warning Tour (2002)
3) Australia vs NZ - RL Tri-Nations Series (2006)

Here is a few pics of the seats moved out prior to the RL Tri-Nations game in October 2006. The main reason given for the lack of movement is the damage it does to the grass, plus you also lose about 5000 seats from the capacity, because as you can see you lose the corners of the ground.

The only problem I have comes from the last pic in which you can clearly see behind the stands that are moved in and the fact there is nothing in the corners.

Thanks for that Dasher. Makes a reasonable difference to those in the bottom tier but that's still maybe only 20% to 25% of the crowd. The stadium lost a hell of a lot of money upto June 2006 when Ch7, after buying everone else out in Jan 2006, sold it to James Fielding Funds Management. Figures I have read are that $200mil pre tax losses, were accumulated over the first 5 years of operations, plus the $100mil capital value between the original cost of $430mil and the selling price of $330mil to James Fielding. I wonder if they will now loosen the purse strings and move the seats more often before they move the rectangle codes to the new stadium in the MOPT precinct?

 

[RussellEbertHandball]

I don't have those figures. I would imagine total revenue that News Ltd receives through the Storm would be about 10-11 million (sponsorship plus distributions from the NRL, etc) meaning they run at about a 2-3 million dollar loss if you don't count the News Ltd subsidy.

News Ltd are actually ahead on the deal. They take out $8m from NRL profits every year, and are out of pocket at the most $3m on the Storm. They are still $5m in the black. Once News exit the NRL, the NRL could just take over that role of subsidising the Storm directly - and would be $5m up on their current position.

I also think once they move to the new stadium crowds and revenue will increase substantially.

According to this Roy Master's article in March 2007, which I've quoted a few times now on these boards, News Ltd were ina worse position in 2006 re NRL distribution less the Storms losses.

How News Ltd sunk its claws in league

March 10, 2007

It appears as though News Ltd has no intention of losing control over rugby league, writes Roy Masters.

A WAR has erupted between the NRL's equity partners, the ARL and News Ltd, over the time frame of the media giant's ultimate withdrawal from the game. It's a war fuelled by accusations of conflict of interest and the huge profits News Ltd makes from rugby league.............................................

News Ltd's three NRL clubs

THE $8 million News Ltd draws annually from the NRL is returned to the code via its ownership of the Melbourne Storm.

The grand finalists made a loss of $6m last year and invested a further $2m in development of the game in Victoria.

However, News Ltd's other two clubs - Broncos and Cowboys - now make a profit.

The publicly listed Broncos, owned 67 per cent by News Ltd, made profits of $2.2m and $2.3m the past two years, with minimal support from their profitable licensed club.

Broncos chief executive Bruno Cullen says: "Over the past four years we've made a cumulative operating profit of $6m."

The Townsville-based Cowboys, a privately owned News Ltd company, made $200,000 last financial year after years of losses.

The club's chief executive, Peter Parr, says: "There has been a massive turnaround the past few years."

The three News Ltd-owned clubs are perhaps the best run of the NRL's 16 clubs.

They are leaders in social welfare programs and have all appeared in the past two grand finals.

News Ltd's original investment in them was not predatory and driven by the motive of ensuring they did not fall over in an era of stratospherically-high player salaries.

As part of the December 1997 peace deal with the ARL, News Ltd did commit to reducing its stake to one club, although no time frame was imposed on this.

In 2002, News Ltd surrendered ownership of the Raiders and indications are it will sell the Cowboys, leaving it with only the Storm and Broncos, last year's grand finalists.

But with News Corporation heir Lachlan Murdoch the No.1 cheer leader of the Broncos, it is certain the Brisbane club is the one NRL franchise News Ltd will never relinquish.

James Packer, however, puts nothing back into the game, despite sharing with News Ltd half the Fox Sports profits and is desperate the NRL do a deal with Betfair which he half owns.

The Packers also did well when News Ltd cut PBL into Fox Sports as part of the peace deal between the warring media companies at the end of the Super League war.

Packer bought in at cost price and now shares the massive profits of Fox Sports without commitments to NRL clubs.

Roy Masters

Q&A WITH NEWS LTD

Roy,
Here are our answers to your questions and some additional comments..............

 

[griffnrl]

According to this Roy Master's article in March 2007, which I've quoted a few times now on these boards, News Ltd were ina worse position in 2006 re NRL distribution less the Storms losses.

Even if the Storm make as much as a $6 million loss (which I personally highly doubt), News Ltd are still $2 mil ahead on the deal.

 

[ChrisFooty]

I'd bite the bullet and bring in WA and SA by 2010, 2012 I'd have CC and Wellington (Christchurch).

Any Sydney team who can't pay the bills beforehand has the opportunity to move to one of these areas, but I'd rather the Bears get what they are entitled too, the CC.

How many teams can the NRL sustain? I think 16 is the right amount for the short-medium term. If the NRL are going to expand with four more teams (WA, SA, CC, Wellington), would some teams have to be merged? I don't think that would be ideal for rugby league. I think even Gallop knows the NRL won't run a 20 team competition successfully.

 

[ParraEelsNRL]

How many teams can the NRL sustain? I think 16 is the right amount for the short-medium term. If the NRL are going to expand with four more teams (WA, SA, CC, Wellington), would some teams have to be merged? I don't think that would be ideal for rugby league. I think even Gallop knows the NRL won't run a 20 team competition successfully.

Why, they did before the SL war and on less money.

 

[ChrisFooty]

Why, they did before the SL war and on less money.

20 teams was not successful back then. I do not think any football code can sustain 20 teams in Australia. It's just not big enough population wise. 18 potential teams in the AFL is pushing it. I really can not see 4 new NRL team come in without others getting the flick. I really can't see any current NRL team getting the flick either.

I'm sure the NRL want one sydney team to relocate to CC. There is a nice financial carrot there, but will anyone take it? They don't seem interested in Adelaide. Perth and another Brisbane team seems the most likely in the next 10-15 years.