Troubled waters for Sharks

[Assassin]

Troubled waters for Sharks
By Josh Massoud
November 14, 2008 IT'S the uncertainty no one in the Sutherland Shire wants to relive.

Just 15 years after their beloved footy side staved off insolvency, the Cronulla Sharks have again been forced to seek financial aid as the leagues club struggles to deflect the ravages of soaring poker machine taxes and indoor smoking bans.

The Daily Telegraph has learned Sharks officials requested a $1million loan from St George Bank in September to pay wages and bills over Christmas. The football club needed the liquidity because Sharkies Leagues Club no longer has the means to drip-feed it cash on demand over the slow-trading summer period.

St George Bank, however, could only approve $500,000. In addition, the bank asked the Sharks to conduct an independent financial review of both the leagues and football clubs.

The global economic crisis has tightened lines of credit to all lenders. Plus, the entire Sharks group no longer boasts enough financial surety to command a $1million loan.

As auditors from sleeve sponsor and global accountant PKF interviewed staff at the Sharks base in Woolooware, group chairman Barry Pierce conceded "hard calls" would need to be made.

Possible measures could include staff redundancies, player salary cuts and the axing of junior teams.

But the $500,000 loan will maintain the status quo over the short-term, as will a bonus from major sponsor LG and NRL prizemoney for finishing in the top four last season.

"We have got PKF in at the moment - they are doing a review of both the football club and the leagues club and St George Bank is supportive of that," Pierce said.

"I want to stress that we've got the full support of the bank - they've been behind us for 18 years."

Despite receiving a $1.5million licensed club grant and finishing equal first in the minor premiership, the football club is still expected to record a $500,000 loss for 2008.

Pierce was involved when Cronulla flirted with insolvency during the early '90s, and suggested the current climate was even tougher for Sydney-based clubs. "It was hard times 15 years ago, but we didn't have smoking bans and gaming taxes to contend with back then," he said.

On the positive side, Cronulla have retained all their sponsors for 2009 and will earn big money from the South Australian government for transferring a home game to Adelaide.

The leagues club is also sweating on offers from two builders interested in building a nursing home and retail complex in land surrounding the club.

[Assassin]

Put simply the Sharks just don't get enough people to their games each week!

They were luckly to average over 10,000 people to each of their home games this year which is lucky to be a third the income teams like the Bronco's or Titans would take on the gates each week.

These teams have been relying on their leagues clubs (poker machine income mostly) to fund the team each year and now its starting to haunt them.

I don't know about the titans but I do know the Bronco's run 100% self seficiant to their leagues club. Not a dollar from the pokies ends up paying the bills for the team.

Its time for the Sharks to look well outside the square for how they get their crowd numbers up. Perhaps the "saturated" sydney market has just one too many teams despite what Gallop says. It may be convenient for fans to have 4 games playing in town each weekend but it won't help numbers. That 12million relocation grant must be starting to look attractive.

[Steve]

Well, the Titans don't have a leagues club, and building one has been pushed back, so definitely running without one.

You pay close to $200 for a jersey these days, most fans have a jersey as well as other merchandise, not only those who attend games, but the ones who don't still buy merch.

Rugby league pulls the biggest tv ratings in Australia, which means advertising pulls the most dollars. Someone is making money out of rugby league, but it isn't the clubs.

[Capital_Shark]

That time of the year already, is it? I'd better get a move on the Chrissy shopping.

The Sharks own a goldmine of land, which includes their stadium, the only club that does own their own ground. Every RL team has to make the move to running without relying whatsoever on kick ups from Leagues clubs. The Shark's way will be through the development of the land they own, which should go a long way to covering costs.

[Ryan]

Boss says Sharks not endangered
By Todd Balym
November 14, 2008

CRONULLA chief executive Tony Zappia has moved to assure fans of the NRL club's future, saying the Sharks are not broke and will never move from Sutherland shire.

It was reported on Friday that the Sharks were on the brink of insolvency and had sought a bank loan to pay players during the offseason.

Zappia insists the situation is not that dire and quelled fears they would investigate the NRL's multi-million dollar package for relocation to the Central Coast.

"In terms of players not being paid that is incorrect. That is absolutely incorrect," said Zappia.

"It is going to be tight, but other footy clubs are in the same position.

"We have never been one of those top two or three financially strong clubs. We're obviously affected a little bit more than some others.

"I think today running organisations on credit is standard practice.

"Our base for next year is solid. All our majors and top end sponsors are moving forward with us and are on board for next year. Now it is just a matter of going through and seeing if there are areas we can cost save.

"There is certainly no talk of relocation. That is not on any agenda. The club will stay exactly where it is."

Zappia confirmed sponsors, global accountants PKF, had conducted an independent review into the club's finances with a report due prior to Christmas.

But unlike some other NRL clubs, Zappia did not believe cutting funding to junior teams was the answer to Cronulla's financial woes.

"Junior rep teams are certainly part of the livelihood and future of our club. More importantly, the Cronulla Sharks were set up to propagate the game of rugby league and we need to ensure that continues to happen in the future."

While Cronulla battle for every penny the news for NRL premiers Manly was exciting as the Sea Eagles signed a three-year major sponsorship deal with Quantum Energy Technologies worth more than $2.5 million.

It took the Sea Eagles less than two months to secure the deal as the club continue to reap the benefits of a premiership win.

"At a time of much financial gloom it is refreshing that the code and the Sea Eagles in particular can clinch such a significant financial partner," said Manly chief executive Grant Mayer.

"It is a tremendous fit for the club and also makes a statement that we take the issue of climate change seriously."

You can stop panicing now CS, there has been another press release

[Capital_Shark]

You can stop panicing now CS, there has been another press release

haha no panic here mate.

Furthermore, I hear word that Ricky got another big name sponsor on board just the other day.

Really, if the club was tits up financially, the bank wouldn't of given them half a mill.

[titanstattman]

Oh well if ur not in debt ur not moving forward...

[Ryan]

Sharks outlook not negative
Margie McDonald
November 15, 2008

THE salaries of Test players Anthony Tupou and Paul Gallen and former international Trent Barrett are safe and the Cronulla Sharks will not be relocating or shutting down minor-grade teams.

The club will admit it is in financial trouble. But, despite newspaper reports to the contrary, it is not broke and it is not Robinson Crusoe in the world of the NRL.

The Sharks saw the writing on the wall three months ago and commissioned accountancy firm and Cronulla sleeve sponsor PKF to do a review of both the leagues club and football club.

That report is in its final stages and due before the Cronulla board in early December.

CEO Tony Zappia said the NSW Government's poker machine tax and smoking bans had hit the leagues club hard.

The Sharks have in the pipeline a proposed commercial development for a 2.8ha block of land they own adjacent to the leagues club.

"We're going forward with a proposed development so we needed to ensure that what strategies we have in place now meet the requirements in going forward," he said of the PKF review.

"It's something probably that other clubs should be doing.

"I'm not saying there's other clubs in dire straits like us, but they are still having difficulties with their bottom line."

But as the leagues club's revenue had been slowing and the forecast losses for the year would be about $500,000, the Sharks went to the bank requesting a $1 million loan. They were given $500,000.

"The bank has been very supportive but said they would give us 50 per cent now and when the review is completed and they see the recommendations, we would sit down again," Zappia said.

Cronulla had awoken to headlines reading: "Sharks Broke".

But Zappia insists this is not the case. The club's land assets alone are worth $24m. The proposed development has value projections of between $80m and $100m. It will become a wholly owned subsidiary of the club with the Sharks eventually selling about 50 per cent.

Zappia, who was football manager at Parramatta before taking on the Sharks role in 2007, said the football club normally received about $1.5m a year from the leagues club.

He knows this has to be reduced, a problem many Sydney clubs face. Some receive up to $4m from their leagues clubs.

The Roosters are trying to trim $2m and Wests Tigers have chipped away at their dependency from $3m - when the joint venture club formed in 2000 - to $500,000 in 2008.

"We watch our costs carefully, we're not extravagant," Tigers chief executive Scott Longmuir said.

"And we drive our business hard. We use that brand to its best effect - the third-most recognised in the NRL - to bring in sponsors, membership and more merchandise sales."

But the 2009 national and world economy would be in a far more perilous state than for the 2008 season, he added.

"But we're in a good position to drive our core business. Others have different models like at Manly and Souths, which have gone down the path of the private ownership model.

Newly arrived Roosters chief executive Steve Noyce would not give a figure on his proposed cost-cutting.

"I've only been here four days but one of my jobs is to work hard and minimise the dependence on the leagues club and grow our own income," Noyce said.

"On one hand we've got to keep a close eye on our expenses but you can never lose sight of the fact you've got to drive revenue.

"The climate makes that difficult but if it was easy, everyone would want to be an NRL club CEO or director."

Zappia wanted to allay any fears the Sharks cost-cutting would lead to players' salaries being reduced or junior teams being axed.

"The issue of players getting reduced salaries or not being paid is absolutely incorrect," Zappia said.

"As for other grades, and unlike some clubs, we are in SG Ball (under-18) and Harold Matthews (under-16), and we've got development squads.

"We're not going to reduce teams that are the livelihood of our club and the district."

Why can't they get $1m with $24m in land assests, f'n tight ass banks!