Greenberg defends NRL’s $3.7 million loss

 

The NRL has posted a $3.7 million loss for 2017 but is optimistic of returning to the black with a profit of close to $40 million this year.

After revealing the governing body’s financial results, CEO Todd Greenberg brushed off accusations the game was broke, predicting a big surplus next year as the game’s new five-year $1.8 billion broadcast deal kicks in in season 2018.

He pointed out the game had recorded an average $10.5 million surplus over the 2013-2017 broadcast deal and because television revenues are paid at a flat rate each year, profits needed to be viewed over the course of a broadcast cycle.

Greenberg said the result was better than forecast after slashing $2 million from administration costs and increases in non-broacast revenue ($147.9 million up from $144.2 million).

“Next year we’ll see the game return to a strong surplus position at the first year of a five-year broadcast cycle,” Greenberg said.

“When I see certain headlines and media commentary about the game being broke, that couldn’t be further from the truth.

“We’ve made great commitments to clubs and great commitments to players, states and the grassroots. The game is being very well managed financially and the distributions are bigger and better than ever.”

He said he expected to post a profit close to $40 million next year and for profits to average $7.5 million over 2018-2022.

He said surplusses would not be as big this cycle after agreeing to a record club-funding agreement which is designed to shore up clubs long-term.

The NRL was forced to bail out Newcastle and the Gold Coast over the last four years after they went broke and Greenberg said the governing body was no longer in a position to prop up struggling franchises.

As part of the club funding package, the NRL has established a distressed club fund, which all 16 clubs are required to sink money into each year.

Over the next five years, that fund will grow to $15 million and any club which runs into financial trouble will be propped up out of that.

“It won’t happen. And the reason it won’t happen is it can’t happen because we don’t have money put aside to prop a club up,” Greenberg said.

“So when we pay an amount to all the clubs, what they’re going to do is pay back an amount each on an annual basis and it goes into a fund.

“That’s their insurance fund. If one of them falls over, they can apply to that fund to help them. We won’t be helping them because we don’t have money in the centre to prop the clubs up again.”

-AAP

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