NRL clubs feeling the pinch as poker machine tax hits grants from licensed clubs
* By Joe Hildebrand and Dean Ritchie
* From: The Daily Telegraph
* February 16, 2010 12:00AM
CONCERNED NRL chief executives fear some Sydney-based clubs could collapse amid revelations that almost $10 million has been hacked from their budgets.
An investigation by The Daily Telegraph has revealed that annual grants from the licensed club industry to the nine Sydney NRL sides they support has been slashed by a third in just five years - from $28.8 million in 2005 to an estimated $19.1 million this year.
Senior teams are now desperately feeling the pinch and junior and grassroots competitions have been decimated.
The State Government's unpopular poker machine tax has been identified as the major reason behind the stunning reduction in grants from leagues clubs to football clubs.
"It is a major problem for the game. Rugby league could be in a drastic state within two to three years," Souths' chief executive Shane Richardson said last night.
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NRL boss David Gallop said clubs were hurting badly. "There have been numerous examples of clubs being forced to drop teams out of junior competitions and cut competitions altogether," he said.
"Cuts across the board have impacted on every club. I can definitely say that our footy clubs have been hit hard by the leagues clubs being put into a position where they haven't been able to provide the traditional funding sources."
The cuts also come amid an exodus of punters from clubs and a resurgence of gambling in pubs.
St George Illawarra enjoyed a $4.5 million grant in 2007, which has now been reduced to $2.9 million in 2010.
The Sharks' $2.5 million grant in 2008 has been pruned to $750,000 in 2010, Parramatta are down from $5 million in 2008 to $3 million and Penrith drop from $6 million in 2004-05 to $3 million this year.
Souths boss Richardson said: "We have to make sure clubs don't collapse but it's a real danger. This $10 million is the tip of the iceberg. The only way clubs will disappear is through natural attrition.
"Leagues clubs can't afford to keep putting money in. I have great confidence in the game but rugby league has major financial difficulties.
"Hopefully the membership drive will solve some problems, but we need a business plan that doesn't rely on poker machines.
"I've been saying this for four years but no one has listened. It's biting hard."
Wests Tigers chief executive Stephen Humphreys and Panthers boss Mick Leary also spoke of their fears. "Clubs are facing a difficult challenge. It's not easy," Humphreys said.
Parramatta CEO Paul Osborne said his club was exploring every path to financial security. "This is why membership is important. We are looking at all revenue streams," Osborne said.
The Bundaberg Red Cup was cut from 12 teams to 10 last year and just eight this season.
And last year the Roosters were forced to pull out of the Harold Matthews and S G Ball junior competitions after their leagues club funding dropped from $6 million a year to its current level of between $3-4 million.
The powerful Souths Juniors has even been hit, recording a $6 million loss last year as it tries to comply with the 2007 indoor smoking ban. Latest figures show gaming revenues in clubs have taken another dive, prompting warnings from some operators clubs may soon be unable to provide any rugby league funding.
A spokesman for NSW Treasurer Eric Roozendaal said Clubs NSW agreed to the tax rates through a memorandum of understanding, and that the Government had introduced financial hardships provisions to assist clubs experiencing a decline in gaming revenue.
