Sports. Honestly. Since 2011

NRL now puts relocation ahead of expansion

The National Rugby League’s (NRL) announcement this week of a $925 million dollar, four year free-to-air television rights deal with incumbents the Nine Network has effectively killed off any hope the competition would expand from 16 to 18 teams when the current media deal expires at the end of 2017. While there is much yet to be negotiated with the likes of pay TV, streaming providers and overseas broadcasters, the expansion proposition is effectively dead and buried for now. This is despite NRL CEO Dave Smith saying at the announcement of the deal with Nine that discussions towards an expanded competition had not concluded.

The short-sightedness of not pursuing expansion is apparent. Two extra teams would mean an extra game each week in a new timeslot. From a broadcaster perspective it would mean additional content, potentially leading to increased ratings and more advertising space to be sold. From the NRL’s perspective, it means potentially new markets and new fans. For the fans, it would mean more footy, pure and simple.

Many in the Sydney establishment would be pleased that expansion is not being pursued. These interests would prefer that any expected increase in rights result in higher annual grants to existing clubs. Few are profitable without this annual injection and expansion, they argue, dilutes their slice of an ever-growing pie. Shifts in culture and governance have significantly improved the fortunes of some clubs – think Souths – but these changes are not equally embraced by all clubs with some having failed to either install independent directors or refuse to manage significant conflicts of interest arising from multiple directorships or dodgy directors – think the Roosters and Parramatta.

Confidence is further eroded when several clubs are either being managed by the NRL or on financial life support – Newcastle, the Gold Coast, West Tigers and the St George Illawarra Dragons are in that category. Taking control of the management or finances of these clubs should mean they are vehicles for the future development of the game, not just left to burn resources.  Why aren’t they being used to take the game to a broader audience?

If it is now the case that expansion is not to be pursued, the only option available to the NRL is the relocation of struggling, existing clubs to new areas. Shifting a team, particularly from Sydney, should be viewed through the lens of the benefits brought through increased media rights, crowds, ratings, advertising spend and merchandise sales. The altruistic sympathies that have kept certain clubs in the game following the Super League war’s uneasy truce should be wholly abandoned. While some existing fans may be lost, it is hard to imagine that a club would lose an entire fan base – in other domestic sports in Australia, many fans make a weekend away out of travelling to support their team.

Where a complete relocation is not the answer, playing more ‘home’ games in new markets could be the answer. Some clubs – Penrith, South Sydney, Warriors, Parramatta and Canterbury in particular have deals that see them take games away from their traditional home bases to such locations as Cairns, Perth, Darwin, Bathurst and New Zealand. The dismissal of Manly’s offer to play Canberra in China, where both clubs’ sponsors are based, is ridiculous.  These actions expose the clubs and their underlying brands to new markets, new supporters and new revenue streams. In the longer term, the development of juniors from these local areas could also be pursued, bringing closer local ties. 

Consolidation has been the name of the game for the past few years but the conservative approach to developing the game in new markets will put it quickly on the back foot. It might be time for the NRL to ask for something in return rather than just keep struggling clubs afloat.

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