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The Parksider

The SKY contract for RL - good or bad?

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Did I not say they were dragging their feet, I didn't say it wouldn't happen. Once Sky offered RL a lot of money union had to jump.

They had already jumped before Sky offered RL a penny. Pugh was hardly asking Mo for advice. His organisation had already accepted professionalism as inevitable and were discussing whether "professional rugby" would like to rejoin the RFU.

Pugh wasn't worried so much about Bradford Northern buying up rugby union players, he was worried about a Packer or Murdoch-funded Super Rugby doing so and about the loss of income with no more All-Black or Wallaby tours (since all their players would be "professional"). Far, far more damaging.

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However, 14 clubs times £1.1m Sky money = £15.4m p.a

That £15.4m could be divided amongst a new top tier of 10 SL clubs (£1.54m to each club), and then arguably a full salary cap could be paid. Revenue from increased crowds could be possible and the business model may not be of losses outside the top few clubs.

However, we'd seriously have to think about ring-fencing SL totally, without licencing once the top 10 were decided and voted in, and without even discussing P&R, as the huge gap to the Championshiop would become a chasm of unreachable proportions, even if a CC club grew it's revenue to £1.5m and 3000 attendances.

Would the clubs go for it - the current top 8 would.

Would the rest of the RL game? Would there be a choice?

The only choice would be to eek a few more quid out of Sky (maybe £4 - £5m per year) to either underpin a top 10 SL even more, or to go towards a different distribution of funds for the idea of a 2 x 10 club SL that has mooted recently on here.

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It had nothing to do with British rugby league and Sky. Pugh and the Northern Unions would have accepted the loss of European rugby union players.

It had to do with a threatened SANZAR break-away that was part a response to Australian rugby league but mostly the fear of a professional rugby union league outside their remit. SANZAR presented the IRB with a stark choice either you agree to professionalism or we will break away and play professional rugby union anyway. The IRB decided that they couldn't do without Australia, New Zealand and South Africa and promptly endorsed professionalism.

Despite the increasing revenue raised from television rights, sponsorship and advertising, the IRB attempted to maintain the cherished principles of amateurism.

However, the pressure to allow players to be paid openly for playing became too intense by the mid 1990s. The impetus for change came particularly from the Southern Hemisphere national unions as a result of a combination of factors involving competition between rugby union and professional rugby league for players, the deregulation of broadcasting in both Australia and New Zealand, and a struggle for television rights in both codes. This increased the demand for televised rugby competitions and the derived demand for rugby players. This put pressure on rugby union administrators to supply competitions in order both to meet the demand and to generate revenue to retain the involvement of key players.

Deregulation of broadcasting brought an increased demand for the rights to broadcast popular sport, including league and union. Prior to 1989, Television New

Zealand (TVNZ) had a monopoly on television sports coverage in New Zealand. However, the situation changed to one of multiple bidders with the establishment of TV3 (a privately owned terrestrial channel) in 1989 and, even more significantly, Sky Television (a pay-TV satellite provider) in 1990. In 1992, the NZRFU sold the broadcasting rights of the All Blacks’ tour of South Africa to Sky Television; this deal provided the NZRFU with significant additional revenue, boosted significantly the number of Sky Television subscribers and ended the public broadcaster’s monopoly on televising rugby union matches (Obel, 2001). In Australia, deregulation of broadcasting in 1995 intensified competition for television rights, especially for league. This led to a split in rugby league in Australia

into two competing professional competitions: the Australian Rugby League backed by Kerry Packer’s Optus Vision and Super League with Rupert Murdoch’s News Corporation. This put upward pressure on salaries of league players and increased the attraction of defection to league from still-amateur union players in Australia and New Zealand.

In response to a potentially damaging drain of players to league and the market opportunity that existed for union competitions that would meet the increased

demand for televised rugby union, the national organizing bodies, the NZRFU, the ARU and SARFU, combined to form SANZAR and agreed a contract worth US$550m over ten years with News Corporation. Before this came to fruition, the national unions had to fight a rearguard action to prevent the loss of key players to the World Rugby Corporation (WRC), a rival global professional rugby organization backed by Kerry Packer. For a variety of reasons (well documented in Obel, 2001), the WRC collapsed, but the threat posed by the WRC led to the introduction of professional contracts in order to retain key players. This left SANZAR in a dominant position, with commercial control over the most exciting and valuable competitions in Southern Hemisphere rugby. It was thus able to exert sufficient pressure on the IRB to renounce the amateur eligibility rules and hence legalize the Southern Hemisphere professional contracts.

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Ironically the Sky deal saved the IRB's bacon because otherwise the WRC deal may have gone through.

1995

The Kerry Packer-backed World Rugby Corporation unveiled plans for a professional rugby "circus" that posed a serious threat to the future of rugby union as an amateur game at its highest level.

Reports suggested that nearly a thousand leading players had been recruited for three years to play in a 30-team competition. Packer had previously created a similar venture with the ground-breaking World Series Cricket series, a breakaway competition that ran in opposition to established international cricket between 1977 and 1979. The scheme reportedly failed when the world champion Springboks decided en masse to stay with the establishment, which was supported by Rupert Murdoch's News Corporation.

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However, 14 clubs times £1.1m Sky money = £15.4m p.a

That £15.4m could be divided amongst a new top tier of 10 SL clubs (£1.54m to each club), and then arguably a full salary cap could be paid. Revenue from increased crowds could be possible and the business model may not be of losses outside the top few clubs.

However, we'd seriously have to think about ring-fencing SL totally, without licencing once the top 10 were decided and voted in, and without even discussing P&R, as the huge gap to the Championshiop would become a chasm of unreachable proportions, even if a CC club grew it's revenue to £1.5m and 3000 attendances.

Would the clubs go for it - the current top 8 would.

Would the rest of the RL game? Would there be a choice?

The only choice would be to eek a few more quid out of Sky (maybe £4 - £5m per year) to either underpin a top 10 SL even more, or to go towards a different distribution of funds for the idea of a 2 x 10 club SL that has mooted recently on here.

This is nonsense. A 10 team SL means 4 current SL teams are to be disposed of. The league want a 2nd French club and a Welsh club, that'a another two teams to be jettisoned. A 10 team league means 18 league games. That's going to reduce revenue by a lot. The monotonous nature of the fixture list would turn people off. Someone would still have to finish bottom and might not be able to compete without their investor, London comes to mind. If they go to the wall, you will have a 9 team league with no ready repacement due to your contemplated total ring fencing of SL.

If you go that route, the CC clubs will seriously comtemplate a breakaway competition. They will have no choice and with 5 or 6 of the former SL clubs in their ranks, plus a greater geographical spread of clubs, plus lesser wage costs, it might just be a more attractive league than the rump SL you are proposing. Looking at the sponsors Featherstone have recently found, there might be a market out there for more investment or sponsorship for a breakaway league with a countrywide exposure.

Is that what we want, a split game? I think reducing numbers in SL to prop up a failing system by splitting the money between a smaller number of clubs is a recipe for failure. It would be far better to keep the league at present numbers and reduce player expenses.

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Rugby Union declared itself open to amateur and professional players on the 26th August 1995. News International made their first move in Australia in January 1995 and made their first offer to th RFL in April that year. Sanzars response of threatening to breakaway was a direct threat of the Murdoch moves in RL. Sanzar saw a cashed up RL game in Australia as a real threat, the IRB was dragging its heals despite the Aussies wanting to go open to b lock the threat, when Murdoch threatened the RFU by cashing up British RL it was then that they decided to go open.

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That's not what the sources say though.

The WRC signed up the world's best rugby union players that's a recorded fact. They didn't sign up to play rugby league. The SANZAR unions got them back onside by telling them that if they turned their backs on on the WRC then they would see them right by giving them a share of the Murdoch money. The IRB was left with an ultimatum that either they backed professionalism or SANZAR would go professional without them.

Far from being threatened, the RFU voted against professionalism in 1995.

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This is nonsense. A 10 team SL means 4 current SL teams are to be disposed of. The league want a 2nd French club and a Welsh club, that'a another two teams to be jettisoned. A 10 team league means 18 league games. That's going to reduce revenue by a lot. The monotonous nature of the fixture list would turn people off. Someone would still have to finish bottom and might not be able to compete without their investor, London comes to mind. If they go to the wall, you will have a 9 team league with no ready repacement due to your contemplated total ring fencing of SL.

If you go that route, the CC clubs will seriously comtemplate a breakaway competition. They will have no choice and with 5 or 6 of the former SL clubs in their ranks, plus a greater geographical spread of clubs, plus lesser wage costs, it might just be a more attractive league than the rump SL you are proposing. Looking at the sponsors Featherstone have recently found, there might be a market out there for more investment or sponsorship for a breakaway league with a countrywide exposure.

Is that what we want, a split game? I think reducing numbers in SL to prop up a failing system by splitting the money between a smaller number of clubs is a recipe for failure. It would be far better to keep the league at present numbers and reduce player expenses.

Its not nonsense, its an idea.

The 18 game season SL1 could then have a set of additional games from teams in SL2 - that will make the Leigh's, Featherstone's and Halifax's happy.

Top half of SL1 plays top half of SL2. Bottom half v bottom half. Something along those lines?

Or those in the western half of SL1 plays the western half of SL2. East SL1 v East SL2

Salary cap and Sky distribution may have to be a bit lower than present in SL1 and a bit higher than present in the Championship in SL2.

This would only work if Sky could be persuaded to pump up some extra cash per season. If its £5m its not a lot of their revenue but it represents a significant increase over what they are paying now.

Depends on how much they want to keep top class RL on tv.

My guess however, is that everything is pointing towards 10 or 12 teams and possibly that Sky show more games per week. The end result could be that all games are covered by video ref and puts that little beef to bed. Its been mentioned a lot in player/coach interviews recently.

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That's not what the sources say though.

The WRC signed up the world's best rugby union players that's a recorded fact. They didn't sign up to play rugby league. The SANZAR unions got them back onside by telling them that if they turned their backs on on the WRC then they would see them right by giving them a share of the Murdoch money. The IRB was left with an ultimatum that either they backed professionalism or SANZAR would go professional without them.

Far from being threatened, the RFU voted against professionalism in 1995.

WRC was none starter without S.A. and when they refused to play ball the whole thing collapsed, Jack Hobbs at NZRU was also instrumental in persuading a large number of NZ players not to sign up further weakening Packers plan, there was still a threat from Murdoch cashing up RL and that is where the pressure was. If S.A. players had started signing en-mass with Packer it would have been different but they didn't and so the pressure on the IRB to act against the packer threat diminished.

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We've been googling, haven't we?

If you go through the links again then you'll find that whilst the NZRU were worried about defections to RL and to a lesser extent the ARU, nobody else was. And those fears turned out to be misplaced as no major players switched codes (I can't think of any). The NZRU even managed to hold onto Lomu somehow even though he'd agreed terms with Canterbury before the 1995 RUWC.

The WRC was a different beast. 27 out of the 28 Springboks signed up to it and the majority of the All Blacks and Wallabies as well. They also had European players as well. They were a serious threat. In contrast no International player signed for Super League.

The threat went when Pienaar switched sides and persuaded the Springboks to accept SARU's improved offer i.e. professional terms. The All-Blacks followed due to similar reasons and the Aussies were left with nowhere to go. SANZAR then presented the IRB with a fait accompli and the IRB voted in favour of professionalism rather than create a new "great schism".

There was no pressure from RL in the end, RL was hardly a threat to the Saffers who were the ones who pulled the plug on the WRC and it certainly wasn't a threat to the RFU who voted against professionalism.

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We've been googling, haven't we?

If you go through the links again then you'll find that whilst the NZRU were worried about defections to RL and to a lesser extent the ARU, nobody else was. And those fears turned out to be misplaced as no major players switched codes (I can't think of any). The NZRU even managed to hold onto Lomu somehow even though he'd agreed terms with Canterbury before the 1995 RUWC.

The WRC was a different beast. 27 out of the 28 Springboks signed up to it and the majority of the All Blacks and Wallabies as well. They also had European players as well. They were a serious threat. In contrast no International player signed for Super League.

The threat went when Pienaar switched sides and persuaded the Springboks to accept SARU's improved offer i.e. professional terms. The All-Blacks followed due to similar reasons and the Aussies were left with nowhere to go. SANZAR then presented the IRB with a fait accompli and the IRB voted in favour of professionalism rather than create a new "great schism".

There was no pressure from RL in the end, RL was hardly a threat to the Saffers who were the ones who pulled the plug on the WRC and it certainly wasn't a threat to the RFU who voted against professionalism.

Why was SANZAR created?

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To take advantage of the new possibilities that deregulation of the Australian TV industry offered. The colonials had long wanted to have something equivalent to the five nations. Now they had someone who was prepared to pay for it.

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To take advantage of the new possibilities that deregulation of the Australian TV industry offered. The colonials had long wanted to have something equivalent to the five nations. Now they had someone who was prepared to pay for it.

Dergulation was what started the SL war, that saw an explosion in the value of player contracts, SANZAR was created in response to that, they then negotiated a TV deal as SANZAR, they may have had the intention of then trying to persuade the IRB to allow them to pass some of those proceeds to players but that isn't what happened.

The IRB didn't respond as SANZAR expected, they were still under threat from RL, especially at this time, to losing players.

The chain of events all starts from Murdoch exploiting deregulation to create SL.

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It's a chain reaction to the deregulation first and foremost.

Like I said the Saffers were not remotely worried about losing players to RL. Only a handful of Springboks ever crossed codes. The Kiwis and Aussies had their concerns about Super League but nobody else did.

SANZAR made derisory offers to their players who were not pleased but despite this none of them crossed codes. The WRC came in with a much improved offer which caused SANZAR to increase their offer and present a fait accompli to the IRB. The IRB were worried about the WRC but not the Super League since it was only ever going to be a minor nuisance to anyone but the Kiwis and Aussies; it would not have been sufficient to change other countries votes but for instance the French had long wanted professionalism and were always going to vote in favour. The WRC was a different kettle of fish, it would have brought an end to the cosy world of rugby union.

The IRB were just about to vote in favour of professionalism when Vernon Pugh met up with Mo to discuss whether the two codes could be reunified. Professionalism was already a done deal, it just hadn't been rubber stamped at this point. Mo returned home even more convinced that the SL deal had to be accepted because RL was finished as an elite sport without it.

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I've noticed a few comments questioning the sustainability of full-time professional rugby league.

The problem back in the first half of the nineties was that it was the part-time game that was no longer sustainable.

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It's a chain reaction to the deregulation first and foremost.

Like I said the Saffers were not remotely worried about losing players to RL. Only a handful of Springboks ever crossed codes. The Kiwis and Aussies had their concerns about Super League but nobody else did.

SANZAR made derisory offers to their players who were not pleased but despite this none of them crossed codes. The WRC came in with a much improved offer which caused SANZAR to increase their offer and present a fait accompli to the IRB. The IRB were worried about the WRC but not the Super League since it was only ever going to be a minor nuisance to anyone but the Kiwis and Aussies; it would not have been sufficient to change other countries votes but for instance the French had long wanted professionalism and were always going to vote in favour. The WRC was a different kettle of fish, it would have brought an end to the cosy world of rugby union.

The IRB were just about to vote in favour of professionalism when Vernon Pugh met up with Mo to discuss whether the two codes could be reunified. Professionalism was already a done deal, it just hadn't been rubber stamped at this point. Mo returned home even more convinced that the SL deal had to be accepted because RL was finished as an elite sport without it.

Players hadn't started to cross codes because the deal had not been completed, the cash wasn't in the bank. Not many SA players switched previously because they were already being nicely looked after. A cashed up RL could beat what SA could offer. SA after the formation of SANZAR and the TV could up their under the counter offers to their top players, that meant that the threat from Packer was nulled. However that still left Oz and NZ vulnerable to SL raids on their talent. Murdoch's SL was the real threat.

No matter how you look at it, the driver was the SL threat. Nothing else moved until Murdoch made his move.

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I've noticed a few comments questioning the sustainability of full-time professional rugby league.

The problem back in the first half of the nineties was that it was the part-time game that was no longer sustainable.

Full time professional rugby league can be sustained if you have the right management and the fan base. Which at the moment is few and far between. I'm sure the bulls and Salford won't be the last two teams to face financial trouble in the next five years. But what I don't get is why take the gambles on players etc when there is no relegation no club for me in the top flight of our game should be going bust. It isn't rocket science knowing what financial limits you have.

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Full time professional rugby league can be sustained if you have the right management and the fan base. Which at the moment is few and far between. I'm sure the bulls and Salford won't be the last two teams to face financial trouble in the next five years. But what I don't get is why take the gambles on players etc when there is no relegation no club for me in the top flight of our game should be going bust. It isn't rocket science knowing what financial limits you have.

The age old drivers are still there. Owner ego, belief that the only way to grow crowds is winning and the more you pay a player the better he becomes.

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The age old drivers are still there. Owner ego, belief that the only way to grow crowds is winning and the more you pay a player the better he becomes.

I agree Padge but it isn't the owners that lose out its the fans. I'm sure most fans would like to have a club just in SL and staying afloat never mind winning anything. Also I bet all the SL clubs are in debt just some a lot more than others.

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I agree Padge but it isn't the owners that lose out its the fans. I'm sure most fans would like to have a club just in SL and staying afloat never mind winning anything. Also I bet all the SL clubs are in debt just some a lot more than others.

it doesn't matter a jot if all the clubs are in debt, normal business practice, what matters is if the debt becomes unserviceable. That is when problems start.

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I've noticed a few comments questioning the sustainability of full-time professional rugby league.

The problem back in the first half of the nineties was that it was the part-time game that was no longer sustainable.

The best thing that could have happened, now we know Sky money cannot sustain a fully pro competition, was that we took the Sky money and created a SL for Murdoch, but one which was semi pro.

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Full time professional rugby league can be sustained if you have the right management and the fan base. Which at the moment is few and far between. I'm sure the bulls and Salford won't be the last two teams to face financial trouble in the next five years. But what I don't get is why take the gambles on players etc when there is no relegation no club for me in the top flight of our game should be going bust. It isn't rocket science knowing what financial limits you have.

Of course it can be sustained if you make the figures balance.

If £16.8M is sustained each year by SKY it is not rocket science to balance the books in theory.

But if you stop winning games all the time and your crowds fall you may panic, throw money at players who won't be better players for it and your crowds may tumble as they did at Bradford.

If the fans weren't so fickle and if there wasn't a shortage of quality players to buy then clubs would be OK.

After all Bradford didn't want to end up like Salford - few fans & can't keep any decent players.

The shortage of players is at the bottom of this, hence 12 clubs seems inevitable.

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I've noticed a few comments questioning the sustainability of full-time professional rugby league.

The problem back in the first half of the nineties was that it was the part-time game that was no longer sustainable.

Always interesting but never as short as this MH

Time for an in depth analysis for us??

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we know Sky money cannot sustain a fully pro competition,

Jeez it's sustained one for 17 years no sign of it packing up..

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Full time professional rugby league can be sustained if you have the right management and the fan base. Which at the moment is few and far between. I'm sure the bulls and Salford won't be the last two teams to face financial trouble in the next five years. But what I don't get is why take the gambles on players etc when there is no relegation no club for me in the top flight of our game should be going bust. It isn't rocket science knowing what financial limits you have.

Absolutely.

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