Having looked at the finances of both the ARU as a whole and the Reds (see here and here respectively), let’s take a look how the NSW Waratahs are doing (their annual report is here).
Two years ago the NSW rugby union decided to split into two parts, the amateur bit and the Waratahs, who report on the professional game in NSW. I will only be looking at the second part since its inception and not from before the split as, basically, I suffer from the same chronic laziness which affects Sam Ikin from time to time, but there is enough info to get a good picture of the state of play.
Profits and Revenue
First, the bits that get all the attention. In 2010 (their first year of operation as a separate entity) the Tahs made a loss of a bit over 200 grand, which went on set up costs and various other things which seem to eat money. It’s a bit like moving house, for some reason new set ups and organization changes just cost money. In 2011 they shifted this to a profit of a bit less than 50 thousand and there’s no reason for this not to continue, so pretty good then. Their revenues are just a bit shy of 19 million in 2011, up by a million from 2010. It’s ok, but it could be better, as I’ll explain.
Liquidity (ability to pay the bills)
The acid test figure (current assets / current liabilities) was 1.17 in 2010 and it has improved to 1.3 in 2011. This means in effect that the Tahs have enough cash to meet their short term debts 1.3 times over. Recall the Reds figure was a concerning 0.44 (they haven’t enough on hand to meet their debts, if they are called in) and the ARU are at 1.85. Tick in the box.
The Unique Sydney Market
I’d be remiss if I didn’t mention the market the Tahs are in. Sydney has 2 AFL clubs and 10 professional mungo clubs. There can’t many cities in the world with such a cut throat market as this, especially seeing as the leagies used to make a habit (and still would if they could afford to) of head hunting union players with any talent. I can’t think of rival sports competing for the same market share where it’s so easy to convert player and be so sure of raising the profile of your code as it is with league and union in Sydney. More importantly, in a saturated market, the only way to grow is to grab slices from the competition. To turn a profit in such a market is good going.
Sponsors and Crowds.
Tah crowd levels are pretty good given the market conditions (see the graphs), but, they could be better and the management must be concerned about both the drop from 2010, especially seeing the crowd figures the rivals get, both from other codes and from north of the Tweed. It would be frighteningly easy to get slowly swallowed up over a few poor years. I reckon the boring brand they often play (or at least have the reputation of playing) must effect turn out. The fact that they seem to under achieve also must keep the punters at home or push them elsewhere. They’ve got to address this.
I said I wasn’t too happy about their revenues and what I’m saying is that I reckon they could do better. Consider the turn around the Reds’ finances have had on the back of a team playing an attractive, winning game. I wonder if the chief bean counter complains to the coach about how much not quite being a great side costs them?
The Tahs have targeted an annual revenue of 10 million from corporate sponsorship. Currently they make a bit over 5 Million and the ambition to nearly double it is pretty bold. The Reds get about 1.5 million and the Balmain Tigers (who claim to be the most sponsored side in NSW) get 490 grand but they get another 5.4 million from the pokies (author shakes head at seeing bogan-ness quantified). The Tahs might be dwarfed by the league market but they seem to have the finances to hold their own and seem intent on keeping it that way through sponsors but it needs to be matched with a winning side.
To sum up, the Tahs are a pretty well run organization from the money side of things but there is room for improvement. They need to get the crowds back in and if they could get the team playing an attractive brand of rugby and better yet, winning they’d really be in good shape. Like the ARU, 3 out of 5 – I like the plans to raise get bigger crowds and more sponsorship as they need these. What they also need is a winning side as the 2 are closely related.
