V’landys drops $500 million bombshell on clubs
ARL Commission chairman Peter V'landys has ordered rugby league's most powerful executives to build a future fund amid revelations suspending the NRL season would result in a code-destroying $500 million loss.
The Sunday Mail can reveal V'landys, sick of seeing billions of dollars wasted, will turn up the heat on the ARLC's investment committee to generate assets to protect the NRL against the type of COVID-19 disaster threatening rugby league's viability.
"The investment committee know I will be putting a lot of pressure on them to get some revenue-generating assets with high returns," he said.
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V'landys' edict comes after the ARLC chairman delivered a $500m hammer blow to every club CEO on Thursday in a bid for financial transparency and to illustrate how dire the situation was for rugby league.
V'landys told the 16 club bosses that by continuing to play games behind closed doors, the NRL's financial losses would reach a smaller, albeit still devastating, $110 million.
It is understood the NRL has $147 million in the bank.
Rocked by the doomsday figures, V'landys is on the financial warpath and has instructed the code's investment committee to begin the task of digging the NRL out of trouble.
The investment committee is tasked with driving the NRL's financial direction and investment strategies.
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It comprises some of the sharpest business minds in Australia, including Dr Gary Weiss, Roosters billionaire car magnate Nick Politis, Broncos superannuation mogul Karl Morris, former Storm chairman Bart Campbell and UBS investment guru George Kanaan.
Despite having secured $2.825 billion collectively from their two most recent broadcast deals since 2012, the NRL has no assets. Their cash reserves could be wiped out totally if a raft of NRL players were struck down with COVID-19, which would force the NRL to suspend the season.
Unlike the AFL, which purchased Melbourne's Marvel Stadium in 2018, the NRL has no assets to liquefy, which has left the code financially vulnerable during the global coronavirus ordeal.
V'landys' predecessor Peter Beattie rammed home the code's financial incompetence two years ago. In the NRL's 2018 annual report, Beattie wrote in part: "It remains a source of embarrassment that the game still has no assets after more than 100 years of rugby league."
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"We've got a good broadcast deal now, but we need to start running the NRL as a business more cost-efficiently so we have more money available," V'landys said.
"We have one of the best business brains in Australia in Dr Gary Weiss. We also have businessmen like Nick Politis, Karl Morris and Bart Campbell, who is one of the best commercial minds I have ever come across.
"So we are lucky as a code to have people of this ability to help us _ and they know how I feel about this issue (accruing assets and wealth)."
Each NRL round successfully played during the COVID-19 saga is worth around $13 million to the sport. Cancelling 10 rounds could cost the NRL approximately $140m, not to mention the many millions lost for individual clubs in gate takings, merchandise and corporate sales.
The ARL Commission was able to determine the real threat of a $500 million loss after every club was ordered to provide financial modelling to NRL chief financial officer Tony Crawford.
By encouraging clubs to analyse every part of their business to cut costs, V'landys also told CEOs that the NRL was looking at a "savage reduction" of staff within League Central to save money.
The 16 club CEOs were also told that every ARL Commissioner would take a pay-cut equal to the percentage of the players if that process was to eventuate.
V'landys is credited as the man who saved NSW racing, using his own entrepreneurial mind to devise The Everest in 2017, which has become the richest turf race in the world with prizemoney of $14 million.
But the ARLC chairman has no plans to meddle with the investment committee, instructing them to map out their own strategy to make the NRL a financial powerhouse.
"Any good organisation plans for the future and has assets that can generate a return," V'landys said.
"The coronavirus is the perfect example. This has been a global disaster and when we are playing in front of empty stadiums, how on earth are we going to pay the clubs and the players if we don't have cash reserves?
"I'm not talking about buying our own stadiums necessarily, but the committee will have a brief to deliver assets.
"It might be investing in warehouses or real estate, I don't know, that's up to them to devise a strategy and report to me. They are the experts."
One major headache could be how much money is at the investment's committee's disposal to build wealth.
"With this coronavirus, I'm not exactly sure how much funds will be available for the finance committee to use," V'landys said.
"The committee will do their due diligence and come back to me with some plans around how much we will need.
"But I want to safeguard the game. The game has to protect everybody, the clubs, the players, the office staff, the stadium workers.
"The NRL is a huge industry and a situation like this highlights how many parts of society are affected if rugby league wasn't to be played."
Originally published as V'landys drops $500 million bombshell on clubs