Struggling NRL clubs have been warned: profit or perish.
ARL Commission (ARLC) chairman John Grant has told clubs if they are not running at a profit by 2018 when more increased funding arrives, they risk having their licences revoked and being thrown out of the competition.
“The message has got through to them,” Grant told News Corp Australia. “And it had to.
“This isn’t about us versus them. But if we now provide a level of funding, then the clubs are to be sustainable … that’s the deal.”
Thirteen of the 16 NRL clubs reportedly ran at a loss in 2015, with South Sydney, Brisbane and the Warriors the only clubs to turn a profit.
Private owners and leagues club backing are available to assist the eventual bottom line of most franchises, but it is those who have had to approach the game for help that are in Grant’s firing line.
The ARLC has already been forced to bail out the likes of Gold Coast, Newcastle, St George Illawarra and the Balmain side of the Wests Tigers merger in recent years.
When combined with the increased administration costs related to securing a new television rights deal, the organisation ran at a loss of $18.7 million in 2015, down almost $40 million on the previous season.
A salary cap placed on football-related spending has been touted as a possible solution for the ailing clubs, however Grant has indicated expenditure is something that should rest entirely with the clubs.
“Clubs already realise this `Arms Race’, it needs to stop,” Grant said.
“I’m not going to use the word cap when it comes to addressing what clubs spend because I don’t think that’s the solution.”