Re: bulls might go bust? : Tue Mar 27, 2012 11:50 am  

Looks like more evidence the league needs to be reduced and the sky money shared out 10/12 ways rather than 14.

Looking forward it would be good to have a larger league with more teams but at the moment we are losing too much quality. There are still 4/5 teams in the league that struggle to stay in business and operate well under the salary cap. Then at the same time the top teams are not allowed to pay their players the money required to stop them going to the RFU and NRL.

The current league does not provide elite teams nor a competitive completion.

Re: bulls might go bust? : Tue Mar 27, 2012 11:57 am  

bewareshadows wrote:

I've always wondered where the money was going.

It's not just a matter of where the money is going though is it? There is what is coming in to consider too. They have been offering ridiculously low season ticket prices for a few years now and I'm not sure how many sponsors they have or how well Odsal goes in the income generating scheme of things but it may be the revenue that has proven detrimental rather than the outgoings. They haven't exactly spent big on their players lately have they?

I'm surprised really that anyone is surprised by this. The RFL didn't purchase the lease (or whatever it was they did exactly) just because the stadium is historic. That was a smokescreen and I would say at least some people weren't taken in by it. I know I wasn't. Odsal is no more historic than Belle Vue or or any other number of traditional old grounds that have disappeared or been under threat due to changing times and fortunes, yet the RFL has not stepped in to save them.

Re: bulls might go bust? : Tue Mar 27, 2012 12:29 pm  

St pete wrote:

It can't be working as its obvious clubs Ste still spending over what they can afford.

We've had London, Wakefield, crusaders and now the bulls all on verge/gone bust.

It's evened it out playing wise or the likes of Wigan and Warrington would have all the best players but it certainly not working off the field.

Look at the clubs listed there. Should any of those organisations exist in the modern world? London is an unsustainable business plan as they/the RFL don't have the ability to market them and generate crowds. Wakefield look under better management now, but were comical commercially for years, Crusaders never had a relevant business plan. Bradford is the only club where financial doom wasn't an inevitable consequence of time and questions need to be answered as to how Bradford have ended up in that situation.

Rugby League finances are a mess in general. Wigan were bankrupt and bought for a fiver after irresponsibly and unsustainably spending beyond their means to basically buy trophies they were otherwise incapable of winning. Warrington is a similar story as pre-Moran they were in an awful mess financially and commercially. They were lucky on several scores, firstly the council's quite ridiculous charity, then Tesco's and also Moran.

Finances should be a key part of the franchise process going forward, of a rigorous process they should put in place now. This debacle proves the franchise review process was a farce and it needs to be stopped.

There HAS to be a change of direction at the RFL. We need to be more professional and more commercially aware.

Re: bulls might go bust? : Tue Mar 27, 2012 12:32 pm  

Offside Monkey wrote:

But, would the RFL not just pocket that, now that they own the ground? Or do they lease the whole facility to Bradford to manage?

Its also not very fair to Hull (or whoever) to take the fixture away from them because some else has made a mess.

I thoughtr Hull couldn't host it due to some ground work being done and the venue of the second match had not yet been decided.

Re: bulls might go bust? : Tue Mar 27, 2012 12:35 pm  

According to posts on the Bulls board the RFL loaned Bradford money to keep going and they couldnt pay it back so thats why the RFL bought Odsal so from what they are saying the RFL took Odsal as part of the deal they are most unhappy over there as they feel they havent been told all the facts by the board

Re: bulls might go bust? : Tue Mar 27, 2012 12:51 pm  

SaintsFan wrote:

It's not just a matter of where the money is going though is it? There is what is coming in to consider too. They have been offering ridiculously low season ticket prices for a few years now and I'm not sure how many sponsors they have or how well Odsal goes in the income generating scheme of things but it may be the revenue that has proven detrimental rather than the outgoings. They haven't exactly spent big on their players lately have they?

I'm surprised really that anyone is surprised by this. The RFL didn't purchase the lease (or whatever it was they did exactly) just because the stadium is historic. That was a smokescreen and I would say at least some people weren't taken in by it. I know I wasn't. Odsal is no more historic than Belle Vue or or any other number of traditional old grounds that have disappeared or been under threat due to changing times and fortunes, yet the RFL has not stepped in to save them.

By all accounts your correct from what I was told on the golf course today.

Apprantly the bulls took a loan off the rfl last year in order to stay in business, that money didn't even touch the sides to the debt but kept them going a little longer but couldn't pay the instalments to the rfl. Early this year the bulls approached the rfl again for another handout but the rfl refused and suggested they buy bulls stadium for let's say 1 million. It as the bulls owed the rfl let's say 500k they effectively only gave them 500k.

If true, it seems the rfl saw the only chance they had to get the money back which effectively screwed the bull and with obvious reasons no bank would touch bulls request for a loan.

That's what I was told, fact or fiction I don't know.

Re: bulls might go bust? : Tue Mar 27, 2012 12:58 pm  

Saddened! wrote:

There HAS to be a change of direction at the RFL. We need to be more professional and more commercially aware.

Absolutely.

To think that behind closed doors the RFL was loaning money (some of which no doubt came from us punters) to a club in trouble while making out they were operating a rigorous audit policy through the licensing system - which is supposed to be live and which the RFL this year stated that would be acted upon mid term - and then overtly lie in a press release saying they were buying the lease of Odsal to preserve the stadium. Like that fooled anyone! No doubt now they will claim the 'it's not our business to reveal a club's financial matters' line again as they did with the Cru collapse and Wakefield. This looks a bit more like corruption than simply an amateurish approach.

Re: bulls might go bust? : Tue Mar 27, 2012 1:44 pm  

I've said it many a time, we need a breakeven cap.

We are also a club who opperates until possibly this year well into a loss. This was sustained and burdened by our board.

If we had a break even cap, then no club could outspend their income. It would cause huge pain in the first few years as currently clubs are competiting with each on the basis of losses. It's unsustainable.

Basically club x thinks that a player will boost their position in the league and attract more fans and more money. So they buy said player and pay wages that they cannot afford along side their running costs.

Club y now has to respond, they too cannot afford the wages along side their running costs but they have to do it for fear of loss of position in the league, a reletively weakened squad and reduced income from less fans.

So both club x and y upgrade, therefore keeping them at the same level player wise they already where, but financially wise worse off.

With a finance cap, you would have to match projected income or income from last year to expediture this year. So you have to pay all your bills and staffing costs, before you can offer player contracts, those contracts would then be payable up to any level so long as the expenditure did not bust the income.

It could be done on a year by year basis, or over the period of a licence. There would need to be some room for falling a little below the line. But bust that an no licence next time. That way clubs turning a profit can spend as much as they like, until it matches that profit. This would not prohibit sugar daddies from wading in, the only provision is that they could not load a club with debt that would sink it when they walked away. It would also allow off book payments, rich man has 100k he wants to throw at a RL team, that team can pay an extra 100k on player wages. The man walks away then the money is a gift not a loan.

In the end though the RFL may fudge the books to create a viable competition, but it's down to clubs to manage finances. The problem is that loading a club with debt or paying people off a never ending overdraft holds no impact for the owners when they can walk away if it all goes wrong.

In the end I doubt we would have a finance cap though as clubs including our own would complain that it stops risk taking and gives no club outside the best supported a chance of winning.

Re: bulls might go bust? : Tue Mar 27, 2012 2:01 pm  

bewareshadows wrote:

I've always wondered where the money was going. Maybe it's not a mis-conception, but if that's the case then the rule is an ineffectual rule.

I think the issue is that the philosophy of the cap has changed over the years. In its early years it was a safety measure and was tightly linked to clubs' ability to generate revenue. Over the years the emphasis has switched to providing a level competition, and the link between maximum spend and turnover has been severed. That means that smaller clubs can pay wages that occupy a large proportion of their turnover.

Surely it would make sense to reintroduce a system where the cap is either a flat rate £1.65m or 50% of the club's turnover (whichever is lowest). If a club has a low turnover but also has a rich backer then some kind of test could be carried out to ensure that necessary funds are in place to honour all playing contracts before allowing permission to spend up to maximum is granted.

There have to be some serious question marks over the licensing system now, though. Do we know at what point the RFL gave Bradford their emergency loan? Before or after awarding them a grade B licence?

Re: bulls might go bust? : Tue Mar 27, 2012 3:01 pm  

Dux wrote:

I think the issue is that the philosophy of the cap has changed over the years. In its early years it was a safety measure and was tightly linked to clubs' ability to generate revenue. Over the years the emphasis has switched to providing a level competition, and the link between maximum spend and turnover has been severed. That means that smaller clubs can pay wages that occupy a large proportion of their turnover.

Surely it would make sense to reintroduce a system where the cap is either a flat rate £1.65m or 50% of the club's turnover (whichever is lowest). If a club has a low turnover but also has a rich backer then some kind of test could be carried out to ensure that necessary funds are in place to honour all playing contracts before allowing permission to spend up to maximum is granted.

There have to be some serious question marks over the licensing system now, though. Do we know at what point the RFL gave Bradford their emergency loan? Before or after awarding them a grade B licence?

Good post and it also crossed my mind has to when the bulls was given grade B licence.

Some might say that possibly the rfl tried to hide the fact they borrowed bulls the money.