Warriors CEO Cameron George speaks with Matt Brown on the deal struck between the NRL and the players association.
COMMENT:
Although there are soothing noises coming from Warriors HQ, you have to wonder if the club is approaching crisis point, courtesy of the coronavirus.
The NRL has plans to kick off an empty-stadium competition in July and their rescue package of $40 million in which the clubs receive a$2.5m grant to keep them afloat has been followed by big cuts to player salaries (five months pay if the NRL doesn't re-start).
That's great, as far as it goes. But there are other pressing financial and operating issues which will be keeping Warriors CEO Cameron George busy as he contemplates "re-modelling the business" – corporate-speak for potential cost cuts and layoffs, among other actions.
Pressure on the NRL is such that reports out of Australia suggest the revamped competition in July will go ahead without the Warriors if border controls and coronavirus measures dictate that the team cannot fly back and forth.
To make sure they can take part, the Warriors will almost certainly have to go back to base themselves in Australia for the 20-week duration of the revamped 2020 competition. If they can't participate, their ongoing NRL funding (thought to be about $1m a month) will be in question – and likely to disappear. But how do they pay for 20 weeks in Australia?
That's not the only financial pressure the Warriors face. They are not receiving the regular influx of cash from live fixtures/attendances.
The November-February period is the normal barren period for all NRL clubs. They have to keep paying player salaries and staff wages – but have little income for those months. The Warriors reportedly have little in the way of financial reserves and the barren period is when they raise money through season memberships.
Details of membership numbers are closely guarded and while the Warriors website claims over 12,000, not all will be full season, reserved seat, memberships; many take advantage of shorter-term, fewer-benefits "memberships". A full membership is $259 and, if we assume about 7000 members – just to hazard a guess – that's about $1.8m and, with all the various deals re shorter memberships, it's easy to see the Warriors income from this being $2m-plus.
Warriors CEO Cameron George. Photo / Photosport
In normal times, that's a key part of their revenue. Now? It's possible it is helping preserve the status quo as the club negotiates this difficult time. So what happens if there is no rugby league at all in 2020 or – as seems certain – there are no matches at Mt Smart and/or the shortened season starts but is called off when an NRL player tests positive?
The deadline for refunds has passed but, now New Zealand is in lockdown with many people suffering financially, what will the club do if members say they want their money back?
The most likely answer is just to roll over memberships to next season – though that then gives them a financial hole to fill next year.
Then there are sponsorships – a big part of their revenue, maybe about 25 per cent or more. No one knows how sponsors, all dealing with their own virus-related financial issues, will be placed to meet commitments. In Australia, national rugby union sponsor Qantas has promised to honour its sponsorship commitments on one hand but, with the other, is asking for a government bailout.
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The Warriors have ongoing ownership costs. It's understood that, when Mark Robinson's Autex Industries bought the Carlaw Heritage Trust's two-thirds stake last year, they did so on an instalment plan. It's thought they have ongoing payments to make, likely to be seven-figure sums as well.
The trust – whose sole beneficiary is Auckland Rugby League – will not be happy at this turn of events. When Autex bought out the trust's two-third share of the Warriors, the Herald had this to say about the decision to sell (backed by 20 of the 30 ARL clubs): "…the CHT, which was set up with the proceeds of the development of Carlaw Park, have ultimately decided they couldn't afford to invest any more trust money in an NRL club, with the Warriors expected to need significant funding over the next few years". That was long before the virus showed up.
Again, with its heart solidly devoted to rugby league, the trust is unlikely to play hardball. However, there must be questions about unknown factors like security – is the security for this arrangement tied to the club or are there personal guarantees from the owners?
If the answer is the former, that could be a concern for the trust. Whatever the answer to that situation, with all these financial quandaries, new owner Robinson must be wondering what he has bought into; it is difficult to see a future for the Warriors where he doesn't put his hand in his pocket and emerge with several million dollars.
No one is surmising that the club will fall over or the trust will wind it up or anything ghastly like that. The trust and NRL would be loath to let that happen – although having no New Zealand side would cut costs a fair bit. The Warriors can also be thankful Autex and Robinson are successful.
But that is more of a picture of the knife-edge the Warriors are currently walking than blanket assurances everything will be all right.
And if you had to hazard a guess at the club's immediate future, most would say it would be in Australia, with a great deal of money to come from somewhere.
