It is almost impossible for an NRL club to go broke today, given the ARL Commission effectively pays the players’ salaries and provides $5 million to each club for administration expenses, but Wests Tigers have finished the 2023 season $1.4 million in debt.
It won’t push the wooden spooners into bankruptcy, especially not while they are backed by the rich Wests Ashfield licensed club, which can fund any deficit.
But if the ARLC was to suddenly reduce the annual grants to NRL clubs or the Wests Ashfield directors were to lose control of the board and the money dried up, the football club would retreat to where it was nearly 50 years ago.
Back then, when the Magpies played at Lidcombe Oval and club president Bill “The King” Carson was at war with the Wests Ashfield board, the annual grant from the licensed club would have funded the salary of just one top player.
The discord was such that when the Magpies secured a major sponsor from lawnmower company Victa in the late 1970s, the Wests Ashfield board cut the annual grant by the amount of the sponsorship.
The arguments over funding continued when Wests merged with Balmain to form Wests Tigers in 1999, with the two foundation clubs having equal numbers on the then 10-director board of the NRL’s new joint venture. Any call for cash to meet a shortfall required Balmain and Wests to contribute equally.
However, Balmain resisted this because they were broke. They were able to stall the inevitable because they dominated the Wests Tigers board via the representative of Wests League Club at Campbelltown, who traditionally voted with the Tigers.
So, Wests Tigers operated with fewer funds than other NRL clubs because Balmain couldn’t contribute.
The Tigers were coached by Tim Sheens from 2005-11 and though he may have worked for less back then, he received a reasonable payout when he left this year after a second stint as head coach.
His $1 million settlement is the major contributor to the Wests Tigers’ $1.4 million deficit, along with termination payments to his partner, who worked in administration, and the club’s former recruitment manager, Warren McDonnell.
Those payments are unusual and Wests Tigers, like all NRL clubs, are expected to post a surplus next season. That, however, assumes club grants remain the same and projects such as the Las Vegas extravaganza remain cost-revenue neutral.
This brings us to Tuesday night’s Wests Ashfield board meeting, which followed fan dissatisfaction that culminated in an online petition calling for an independent review of Wests Tigers.
The Wests Ashfield-commissioned report, prepared by former NRL chief financial officer Tony Crawford and businessman Gary Barnier, is near completion, with Crawford saying: “We took the board of Wests Ashfield through the process, explaining our thinking, and will then move to other key stakeholders, such as Balmain and Wests Magpies. The final report should be completed inside a month.”
It is likely the report will recommend the addition of independent directors to the present seven-person board, which Wests Ashfield currently dominates via an entity known as the Holman-Barnes
Group.
However, there will need to be safeguards to ensure Wests Ashfield doesn’t cede control and, therefore, refuse to fund future deficits in the event of the ARLC cutting back on grants.
One director, speaking anonymously because discussions had been confidential, said Wests Ashfield would never “sell off the farm” but could choose to carve out essential reserve powers, take a back seat and allow directors with specialist skills to make football decisions.
To be fair, Wests Tigers would have broken even this year if they reduced their ramped-up spending in the south-west of Sydney, but this region is their long-term source of players and fans. It is, therefore, their future, especially if the mega-rich Wests club at Campbelltown rejoins the Wests Tigers board.