Economic threat to Super 14 expansion
Jacquelin Magnay | October 13, 2008
Expansion plans of the Super 14 competition to include a fifth Australian side may be cast aside in favour of fast-tracking a Japan-based team following the global credit turmoil.
Australian Rugby Union chief executive John O'Neill, speaking last night from Dublin, said: "There is not a business in Australia that is not taking a deep breath at the moment and we are going through a full assessment of our outlook. This is a paradigm shift and one has to be extremely thoughtful and cautious over the next 18 to 24 months."
While rugby wrestles with the financial crisis, the AFL insists its expansionary vision will not be derailed, with the Gold Coast franchise due to meet the AFL Commission this morning to present its latest submission for final approval for inclusion in the 2011 competition. The AFL's ambitious and expensive expansion plans into western Sydney, slated for 2012, will, however, be closely monitored as the credit crisis intensifies.
"We will continue with our expansion plans but all sports will have to plan and act more conservatively with the changed economy," AFL chief executive Andrew Demetriou told the Herald yesterday.
SANZAR officials are meeting in Sydney on Wednesday, and while the rugby union expansion was not initially planned for discussion, the sudden international economic crisis has been put on top of the agenda.
Suddenly, the prospect of five Australian teams in a possible Super 15 competition may become too onerous in a marketplace in which the competition for the football dollar is intense. Some officials believe embracing a team from Japan could soften the possible impact from the current economic squeeze on future rugby TV rights deals, which expire at the end of 2010, just before the 2011 Rugby World Cup. Officials had already flagged their intent to have a six-team finals series next season and to expand to 15 teams in 2010 - with perhaps a Super 18 embracing Asia in 2013-2014.
News Ltd paid $US323 million over five years for the TV rights in Australia and New Zealand.
Rugby's uncertain times come as one of Australia's richest men, Football Federation Australia chairman Frank Lowy, warned on the ABC TV's Offsiders yesterday that "sport will have to contract" because the economic contraction would have an effect on every facet of life.
"I think the world has been living beyond its means. I think the world will have to contract and so will sport have to contract. It's as simple as that," he said.
"There is only so much money to go around. But fortunately the FFA is doing very well. We have got several sponsors, and we just signed Optus for four years this week, and with Qantas and Westfield we are very, very well supported."
The FFA received a $32m Federal Government grant last year, and is likely to receive financial support underpinning the bulk of the $50m to $60m bid for the 2018 World Cup.
Rugby will be the first of the major domestic football codes to face a broadcast rights negotiation, at the end of next year - when the effects of the downturn may still be evident. But the Australian Rugby Union has re-signed its blue-chip naming rights sponsor, Qantas, for a further four years and has a two-year deal with Bundaberg Rum.
NRL chief executive David Gallop said he was optimistic clubs would withstand the crisis, which follows reduced leagues club support because of the State Government's poker machine tax and changes to smoking legislation. For the past year, the clubs have been looking to other sources of revenue.
"It will be tight, but they will be resilient . . . to some extent, our clubs have been forced to cut their cloth to fit their suit for some time now," Gallop said.
He said rugby league had held up well this year with crowds similar to last year and club memberships up 24 per cent. "People are looking to sport to get away from the pressures of their mortgages," Gallop said.
"But there is no doubt people's discretionary spending will be impacted. This is certainly going to impact at club level to some extent, and it further emphasises the impact of the poker machine tax."
