Success comes at a high price for Parramatta Eels
Parramatta has finally experienced success on the field but it has come at a considerable cost, with the football club expected to post another league-high loss of more than $10 million.
The Eels played finals football for the first time since their fairytale 2009 grand final appearance after finishing the regular season in fourth place. However, the club’s performance off the field wasn’t as impressive. Parramatta are still in the process of coming up with an audited figure, but it’s expected the result for the financial year will be a loss of at least $10 million.
It is only a slightly better result than the previous financial year, a $12 million loss. That outcome was the worst in NRL history as the 16 clubs lost a combined $53.4 million.
It was thought that Parramatta’s blowout was a one-off; the result of the salary cap scandal, the $750,000 fine that came with it, big payouts to Anthony Watmough and Will Hopoate after contractual disputes, more than $1 million in legal bills, a raft of payouts that came with a turnover in staff and a loss of sponsorship revenue.
However, some underlying issues appear to remain as the Eels continue to be the NRL’s biggest spenders at a time when the Brisbane Broncos are the only club consistently in the black.
Parramatta went through the entire season without a major sponsor and have yet to sign one for 2018. They are also in a legal dispute with their former major backer, Dyldam, over alleged unpaid bills.
The Eels boasted club record membership numbers totalling almost 25,000, the third-highest in the NRL, after emerging from the cap scandal. The Eels are currently playing home matches at ANZ Stadium while their new ground at Parramatta is being built.
Upon coming to power, Eels chairman Max Donnelly publicly stated his intention to slash the funding from the Parramatta Leagues Club to the footy club by about half for this financial year. However, a fresh blowout in costs will result in the leagues club cutting another hefty cheque.
“The accounts are being finalised now, we haven’t done them, but I’ve got a pretty good idea of where we’re going to be,” Donnelly said. “It’s obviously better than last year but not as good as I’d like. There are a whole lot of factors that contribute. Not having a major sponsor is one issue. The deal that was done at ANZ is shocking for us, you can get an extra 10,000 in and get no more money. It is a really bad deal. We virtually make nothing out of playing games of football there.
“We’re stuck with the deal, it was done before I got there. They were worried about where they could play and ANZ was the only place they could play. They rushed into this deal that wasn’t very favourable.”
In a bid to ensure clubs are financially viable, the NRL has increased club grants to 130 per cent of the salary cap. To ensure the money is spent prudently, there will be a soft cap on football department spending of $5.7 million from next season.
Regardless, recent history suggests the days of buying premierships are over. Cronulla won their maiden title at a time when they were ranked 15th for football department spending. The Sharks and previous premiers North Queensland and South Sydney have consistently been ranked outside the NRL’s top spenders.
Donnelly said his goal remained to halve the Eels’ reliance on the leagues club and hoped the ambition was achievable next season.
“That was the goal. We do fund our juniors, there’s our rep program,” he said.
“We probably had too many second-tier players. We’re addressing a lot of issues. It will certainly be a lot better next year.
“I would think it would be around $5-$6 million next year.”