The NRL will invest more than $200 million in the development of rugby league over four years after securing the broadcast rights deal plus delivering increases in sponsorship, major game revenue and merchandise sales.
After funding and expenses, the NRL delivered a record $49.6 million in the 2013 financial year, including significant revenue growth in both broadcast and central operations.
ARLC chairman, Mr John Grant, and NRL chief executive, Mr Dave Smith, today presented the NRL 2013 financial results, which represented a $60 million turnaround from 2012.
‘We have significantly increased our investment in the game following the new broadcast rights deal, with 100 per cent of all revenue generated by the media rights deal invested in the game,’ said Mr Smith. ‘Our non-broadcast revenue through sponsorship, major game revenue and merchandise covers all central operating expenses – and still generates a surplus, which is reinvested in the game.
‘Our results show that Rugby League is investing more in the game than ever before and is now truly positioned to enter a period of growth that will make it the strongest and healthiest it has ever been.’
Mr Smith said the NRL would invest in areas that generated strong commercial returns.
The NRL is forecasting that more than $200 million will be available for strategic investment in the future of the game, of which $80 million is forecast to be set aside for a ‘sustainability fund’ that is invested to generate a commercial return over the next four years.
Like private sector companies, the NRL is creating a reserve to ensure it has financial security to withstand any unforeseen events. The NRL’s goal is for non-broadcast revenue to double over the next four years.
In addition, at least $120 million will be put into a ‘growth fund’ over four years to be used to invest directly in the strategic priorities of the game from grassroots to NRL clubs, fans and members, stadiums and infrastructure, and commercial operations that generate more returns for investment.
The $120 million will be spent on football and participation, fans and members and financial sustainability and governance.
ARLC chairman, Mr John Grant, said 2013 had delivered a solid injection to the growth fund and, as this was invested over time, it would ensure Rugby League has a sustainable foundation from which it can continue to evolve as the most dynamic and exciting sport in Australia.
‘We set out as a commission to create a financial base that, if invested wisely, could make a real and long-term difference to Rugby League,’ he said.
‘In 2014 and beyond, we will work with our clubs, state leagues and affiliates to apply the funds in ways that meet the game’s strategic priorities.’
Mr Smith said strategic investments were already being made in the game.
More than $4 million has already been spent on a membership drive and player education and welfare in the three months since the end of the 2013 financial year (October 31).
And a further $30 million has been identified to invest in key programs including activities to create a stronger fan and membership culture; support for clubs playing in the state leagues, grass roots infrastructure and touch football participation.
‘The $1.2 billion broadcast rights deal, negotiated in 2012, provided the opportunity to fundamentally change the way we operate,’ said Mr Smith.
‘We are using this opportunity to embed a new funding model where all revenue generated by the media rights deal is wholly invested back into the game, and central business expenses are self-funded by non-broadcast revenue. At the same time, we are being disciplined with our costs, especially in relation to staffing and administration.
‘This will continue with the aim of keeping operating cost increases in line with inflation or lower if possible over the next four years.’
Highlights from the 2013 financial results include:
· Central revenues of $314 million with increases across both broadcast (up 118%) and central operations (up 16%). Led by 25% increase in sponsorship and 14% in major game revenue.
· A higher yield from major events and sponsorship to give the NRL a better quality income stream.
· More than $241 million invested into the game.
· $2.2 million investment in new governance measures, including the Integrity Unit, to deliver a state-of-the-art drug testing regimen, policing the NRL rules, and managing the salary cap.
· Increase in club funding from $76 million to almost $120 million (up 57%), ensuring that for the first time NRL club funding was greater than the agreed salary cap.
· Increase in funding for state leagues and affiliates to about $17 million (up 18%).
· More than $22 million allocated to support grassroots competitions and Rugby League school-based activities.
· Stable operating costs achieved despite revenue growth with a two per cent increase in administration costs to $15.7 million plus an extra $2 million in competition, player education and welfare and community costs.