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Tahs are down but certainly not out
April 24, 2009
With home crowds on the decrease in tough times and the Waratahs losing, the NSW Rugby Union chief executive Jim L'Estrange talks the bottom line with Greg Growden.
Q How are the NSW Rugby Union finances looking?
A We're probably going to post a small loss for this year. That has been driven by memberships and attendances being down a bit. But the major down is corporate hospitality, which has been driven by the economic climate. It will be down by about 35 per cent. That all leads to a negative budget of about $300,000. In this economic climate, that's not a bad result. The home attendances have been down by one or two thousand per game, but it's fair to say that the crowd at the Western Force match last weekend was disappointing.
Q What were you hoping for for the Force game?
A We were hoping for about 28,000. We ended up with more than 22,000, and at the end of the day, if I don't get the crowds I budget for, I have to work out how to accommodate that. We will now work out how we can save money between now and the end of the year.
Q What are your options in cutting costs?
A It revolves around working with our staff about smarter ways of doing business. It involves money you haven't yet spent, where you can save, such as in marketing and advertising. It's not a matter of dropping our head count down.
Q Would a home semi-final cure your financial concerns?
A A home semi-final brings in about $500-600,000. It would be fantastic. If the home semi doesn't eventuate, we'll be fine. We're not relying on it. We don't budget for it.
Q The Waratahs have been criticised regularly for their standard of play. Has that impacted on the crowd figures.
A You would be silly to suggest that you don't get some of that permeating on people who walk up to attend games. We rely on two groups coming to the game. The first is our members, of which we have about 10,000. And the second are those who decide to come to the game at shorter notice. You'd have to be real to suggest that when the perception is that the game is maybe not as good as you want it to be, that you potentially take a better entertainment alternative. And that's what they do. Sometimes it is to watch it on TV. Other times it is to go out to dinner. Who knows? But either way we're in the entertainment business, and we're competing in that market. People have a choice, and we're not appealing to them at this moment as a good entertainment choice.
Q You have received criticism from your members for taking a game to ANZ Stadium. Will this force you to do something different for games out there from next year?
A There's no doubt we came under a bit of criticism from members, but we also received applause for taking the game a little bit wider. Strategically, it was a good idea. New members will be found by doing this. What we have to do at the end of the season is revisit how we package our memberships. We know our members support the SFS, and maybe they need the opportunity of actually saying 'well I'll go to the SFS, but maybe won't go to Homebush Bay'.
Q How is the sponsorship?
A It's good. We're going to be down less than 5 per cent to what we wanted to get this year. Thankfully, we have some real keynote sponsors who have been really strong - such as HSBC, IBM, Mazda - and they will be there for a while longer. But it is a very hard market, and like a lot of businesses, we have lost one or two … But the odds are you've replaced it with a lesser amount of money, which means taking on more sponsors, that adds costs to your business potentially. There are only three parts to my revenue stream. It's the grant I get from the ARU, sponsorship, and my membership and ticketing.
Q How does it work having a NSW Rugby Union board and a separate Waratah Inc board?
A A while ago the NSWRU board decided the professional game needed more focus, and that needed a separate board which had the right skills to allow primarily financial sustainability of the Waratahs. That hasn't quite happened, but we have a Waratah advisory committee- Arvid Petersen, Russell Tate, Sally Loane, Will Jephcott, Ed Zemancheff and myself, and we only talk about the Waratahs, and its financial sustainability.
Q Does that committee have any involvement in the running of the Waratahs team, in particular selections?
A None. Never.
Q So there's no outside influence in the running of the Waratahs.
A There's absolutely none. I know that comes up a lot. I'm not going to say that I don't bring [NSW coach] Chris Hickey into the room, and make him accountable, like I would any business manager for the results of his business. His business is my rugby performance. He is accountable for that. I do the same with all the other departments. But never, ever have we involved ourselves in the selection process.
Q Going onto another volatile subject - club rugby. You have the situation where your chairman Ed Zemancheff said in the press that it may be a good thing for the clubs "to go it alone". Where does the NSWRU stand with club rugby?
A Club rugby is incredibly important to the development of our players. What we need to do is to encourage it. I would love to invest more in it. We can comfortably call it our tier three. We can do a lot more than what is currently being done, and it does need a bit of direction. It is actually on a bit of a crossroad, and we need to go back to the clubs and work it out. The clubs have recently said they want to take ownership of that decision making. We're happy to assist that. All we are asking is that the governance model is clear before that occurs. In the meantime, we'll work in concert with them.
Q Can you see a situation where NSWRU is not involved in club rugby?
A No, never. I will not outsource club rugby. I get a lot of my players from the club system. They nurture players, and we send the players back to the clubs. I would like to be party to the direction of those clubs because it makes the Waratahs stronger. Club rugby plays a very, very important role in the growth of the game. But the reality is that I don't have an answer for it. We just have to keep the energy coming, keep the debate going, and make decisions so that it continues to grow.
Q There is constant speculation about club competition changes. What are your thoughts about improving the competition structure?
A I'll caveat it by saying that anything I say has to go back to the club presidents. I'm certainly an advocate for a strong first-grade and second-grade competition. There is the need to differentiate in the clubs the players who have aspirations, skills and desire to strive for greater things, and those who want to just play for the club. We have to accommodate both. And we have to be a little more flexible in how the competition looks.
Q Are you concerned that some western Sydney clubs are struggling?
A We have tried to re-establish the west, and I am an advocate of having Penrith and Parramatta in the competition. There is a lot of rugby played in schools in the west, but there is not a clear pathway for those rugby-playing kids to come through. There is a responsibility for the clubs to be strong, and a responsibility of the NSWRU to support them to be strong. The clubs have to engage and take responsibility of their destiny. They can't blame the NSWRU if they haven't explored and exhausted every local avenue to increase their numbers.
Q There is a push to have the fifth Super 15 team in western Sydney. If it occurred, it would clearly make your job a lot harder.
A There is the potential to make my job a little bit harder. I'm not quite sure it would make it any harder than it is at the moment. The last few weeks have made my job pretty tough. The reality is that it will put pressure on potential sponsorship, membership, supporters … That's the pressure of business.
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Originally Posted by shasta
