For most businesses caught in the crosshairs of the Covid-19 pandemic, the one-two combination of “assessing the damage” and “counting the cost” has been the modus operandi. The universal goal has been survival, with key focuses on staffing and budgets.
In the corridors of power at the National Rugby League and Rugby Australia there have also been carefully played hands of opportunism. During the past two weeks, the chief executives of both organisations – the NRL’s Todd Greenberg and RA’s Raelene Castle – have resigned, succumbing to myriad pressures pre-dating the pandemic.
In each case, Covid-19 can be blamed only for expediting matters.
At the NRL, the tenure of Greenberg appeared on shaky ground even before a ball had been kicked in 2020, and while initially it seemed he might be afforded time to navigate through this unprecedented period, the patience of the clubs and Australian Rugby League Commission chairman Peter V’landys quickly wore thin.
With the competition’s very existence at stake, V’landys was unwilling to accept inertia at NRL HQ. When it became clear to him that was all Greenberg had been offering on a matter as critical as finding a way to involve the New Zealand Warriors in the competition’s scheduled May 28 restart, something had to give.
“The Warriors were clueless about what was going on, but that was just the tipping point [for Greenberg],” Panthers legend and NRL commentator Greg Alexander tells The Saturday Paper.
“The financial position the NRL were in was one of the major factors as well, then this [pandemic] just brought everything to a head.
“I think V’landys’s hand was forced. He realised that unless he got involved [in the operations side of the business], he might have been letting the ship sink on his watch. And he wasn’t willing to do that.”
Clubs had also taken issue with NRL inactivity since the onset of the pandemic, and V’landys had again served as mediator amid claims all 16 clubs had been short-changed about $54,000. This was made up of a shortfall in a $1.21 million guarantee from V’landys to help clubs through the Covid-19 period, and a missing portion of a rainy-day fund clubs had been adding to monthly since the start of 2018. As the depth of the NRL’s financial woes – and its reliance on broadcast deals – was sorely exposed, it was a broadcaster that swung hardest.
“This health crisis in our community has highlighted the mismanagement of the code over many years,” read a Nine Entertainment statement on April 9. “Nine has invested hundreds of millions in this game over decades and we now find [the NRL] have profoundly wasted those funds … we’ve bailed them out many times … It would now appear that much of that has been squandered by a bloated head office.”
If it was a power move from Nine to enact change at the top, it proved ruthlessly effective. Greenberg’s tenure included impressive rises in revenue but the absence of cash reserves in the past six weeks has justified the broadcaster’s central gripe. The clubs’ need for a $40 million bailout package and a 53 per cent cut in the NRL’s operating costs have been the immediate repercussions, as the governing body rushes ahead with plans to resume the competition – either exclusively in New South Wales or, depending on a ruling from the Queensland government, that state as well – to stave off a more perilous financial position. None of it comes as a shock to those inside the game.
“For many years, clubs have been disappointed with the amount of money spent by the NRL – the size of the operation and the reliance on consultants for what seems like every decision made,” Alexander says. “It felt to me like there was a big spend, so I wasn’t surprised that there wasn’t the money to fall back on, and we all knew there were no assets.
“The push has been on to get more [club] members and increase the revenue stream from other sources but I don’t think there are many sports in the world that aren’t reliant on broadcast deals and that’s what dictates what the clubs and the players receive.
“There’s still a lot of work to do [between the NRL and its broadcast partners] but we’ll see where it falls when everything is sorted out.”
Not far from NRL headquarters in Sydney’s Moore Park lies the HQ of Rugby Australia and a similar feeling of unrest and instability.
There’d been a sense of inevitability that Raelene Castle’s days were numbered from the moment news broke on April 22 that 11 former Wallabies captains had signed a letter calling for “the current administration to heed our call and stand aside to allow the game to be transformed”.
Castle was appointed to the top job two-and-a-half years ago and even at that point it was considered a brave move for the former Bulldogs NRL chief executive, given the increasingly parlous state of rugby union. Not six months later, the Israel Folau saga began. The calamitous handling of the controversy generated endless newspaper fodder and triggered questions about Castle’s capability of steering RA safely through inevitable challenges. On-field, the Wallabies lurched from one poor performance to another, and Australia’s Super Rugby franchises struggled (with two finals spots in the past two years), while last year RA suffered a reported operating loss of $9.4 million. The financial issues have been brought into sharper focus still during the pandemic. Last week, RA went cap in hand to World Rugby, requesting a loan of an estimated $16 million.
All of that has contributed to the sport’s dire situation in this country, but perhaps the killer blow for Castle came with her handling of the ongoing broadcast agreement negotiations. Her decision to flat out reject Fox Sports’ low-ball offer of $20 million a year – vastly below the existing $57 million per annum deal due to expire this year – and take the rights to tender could by some be considered admirable. However, her rejection of their second offer of $40 million a year for five years – possibly emboldened by the reported entry of Optus to the fray – led to Fox’s withdrawal from the race. When the pandemic struck, there was speculation Optus was only days away from signing a landmark deal as RA’s new partner. Instead, the governing body now has an anxious wait to see if a troubled Fox is willing to return to the negotiating table, or if Optus will in fact save the day.
Would the securing of a broadcast deal have spared Castle? Probably not. The three new members of the RA board – Brett Godfrey, Daniel Herbert and Peter Wiggs – have openly been heading in a different direction as they look to improve relations with states and likely pick up negotiations with Foxtel chief executive Patrick Delany, whose relationship with Castle was reportedly strained but with whom new board member Wiggs is close via his position as V8 Supercars chairman. In addition, interim RA chairman Paul McLean – who is expected to be replaced in July – last week agreed to meet the former Wallabies captains whose letter had effectively pushed Castle out the door. The leading voices among those to have signed that letter have been Nick Farr-Jones and Phil Kearns, with the latter having unsuccessfully run for chief executive against Castle in late 2017.
Wallabies legend Andrew Slack – another former captain – opted not to sign the letter. “I remain unsure of the wording of the letter, the timing of it and most importantly, any positive effect it might have,” he wrote to Farr-Jones and Kearns.
In a column for News Corp he expanded on his reluctance: “I also expressed concern that any intended coup would see babies being tossed out with the bathwater. The letter spoke of a plan being needed to assist Australian rugby to move forward. Had that plan been formulated, at least in part, and included in the letter, I may have taken a different stance.”
Slack was not the only high-profile former Australia skipper to refuse to put his name to the letter: John Eales, Tim Horan, Mark Ella, Mark Loane, Tony Shaw and David Wilson were all notable omissions. Regardless, the letter was immediately impactful in hastening the removal of Castle, though the call for revolution in the ranks seems oddly timed given the new-look board has barely had a chance to put its feet under the table. According to Eales and Shaw, change was already afoot under interim chairman McLean.
As top-level rugby league and rugby union fight for survival, the Australian Football League appears best placed to come out the other side of social distancing restrictions with its house in order. The game-changer for the AFL was being able to secure a $600 million line of credit by borrowing against its biggest asset, Marvel Stadium. While Covid-19 has undoubtedly had a major impact on both the governing body and its clubs, the league has greater cash reserves than either rugby code. That, together with a straight-shooting administration and a more transparent relationship with the AFL Players Association, could well put it on the path to recovery sooner than its rivals.
As it stands, whoever takes on the unenviable tasks of assuming the chief executive’s positions at the NRL and RA will be setting sail in treacherous waters.
This article was first published in the print edition of The Saturday Paper on May 2, 2020 as "Quit or be punted ".
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