Gallop warns of financial stress

David Gallop NRLWith the global economic crisis in full swing, NRL boss David Gallop has warned 2009 will be a tough year in which the NRLs 16 club setup is under threat.

The NRL has been dealing with financial stress for years now, but the global economic crisis could tip things over the edge and see clubs scrambling for survival again once more.

According to media reports only 70% of leagues clubs scored a net profit in 2004. By 2010, predictions suggest only half that number will achieve any net profit.

Nearly half of all NRL clubs believe their financial position is unstable.

The Sharks have been the latest in trouble, borrowing money during the offseason to keep ahead of the bills.

Canterbury is set to enter 2009 without a major sponsor.

The salary cap will however increase by $100,000 in 2009 to $4.1 million – and the NRL to boost its handouts to clubs by the same amount.

Gallop believes the costs attached to driving a successful club are increasingly more expensive – at a time when sponsorship dollars continue to spiral downward in tough economic conditions.

While Gallop admits privatisation is an option for clubs, the drive for football memberships must be the first priority. NRL team supporters unlike their Victorian AFL cousins are simply not able to draw membership dollars.

Whether it’s a case of the clubs doing a poor job of marketing or fans being tight with their cash, the influx of supporter dollars is much needed.

“I think we need to look carefully and make sure the people that are coming in are adding value” said Gallop.

“We all know football clubs are not places where you’re looking for a profit. You’re doing it out of love for your club, love for the game.

“In these times I don’t think too many people are prepared to make that commitment.

“The state government poker machine tax, the impact of the smoking legislation… it put stress on a couple of years ago and it’s an increasing stress.”

And on players taking pay cuts?

“I don’t think its time for talking about pay cuts. It’s certainly a time for being sensible about growth.”

While Gallop said no one can be classed as ‘safe’ – he like everyone else knows the loss of any club from NRL would be a massive blow to the game at a time when it has virtually healed all wounds from the bygone Super League War.
“It does a lot of damage certainly for the fans of the club which disappears, but I think it leads to a lot of disenchantment across the game if you lose a club.

“We’ve seen it happen in rugby league and it’s a pretty painful thing.

“We’ve got a saturation of clubs across Sydney and I think that’s important for us in terms of the competition we are in with other codes.

“We’ve got teams in important regional positions for us, so I don’t think any club is expendable.

“Having said that, we can’t be out there saying we’ve got a blank cheque, either.”

Gallop was also cautious not to take a totally ‘downcast’ attitude. He said there remains a stack of positives around the clubs and the greater game.

“I don’t think its all doom and gloom… I think rugby league can be something that people feel positive about in 2009 while they go through tough times. It can be a bit of an oasis in the desert.”

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