WHY NRL NEEDS $30M BANK LOAN
Greenberg to borrow $30m for clubs
THE NRL has been forced to apply for a $ 30 million bank loan to pay for club funding agreements it could never afford.
Chief executive Todd Greenberg not only needs approval from the banks but also broadcasters Channel 9 and Fox Sports, who will act as “guarantors”.
This is the second injection of cash the NRL has needed in 2017, having already received a $50 million advance from Fox Sports to ease its cashflow problems.
The need for the $30 million loan arose after the independent commission caved in to the 16 clubs on funding deals from 2018 onwards.
After 18 months of negotiations, commission chairman John Grant eventually guaranteed the clubs $13 million a year in annual grants at a cost of more than $1 billion over the five years of the broadcasting deal.
It saved his job and got rid of a no-confidence motion in his leadership.
Yet the NRL bean counters quickly discovered they won’t have the money when the first club instalments are due to be handed out in November.
Only the $30 million loan would ensure the clubs get what they were guaranteed.
It’s one of the reasons why Grant had no choice but to confirm he will leave in February at the end of his term.
Under the strategic plan that Grant published soon after the independent commission came into power, the game was supposed to have $200 million in the bank by 2017 in a future fund.
Instead, it has basically got nothing.
It’s not helping the NRL in that it still hasn’t sold the Gold Coast Titans or the Newcastle Knights to private owners.
Both clubs are losing about $2 million a year under the NRL’s ownership.
Also, the commission was forced to save a desperate St George Illawarra with a $6.5 million loan — money that still hasn’t been repaid by the joint-venture club.
The new $30 million loan will be paid off over the five years of the broadcast deal and will attract millions of dollars in interest.
Placing further pressure on the NRL administration is the ongoing negotiations with the Rugby League Players’ Association over its members’ future salaries.