Hopeful To Discuss A License Fee With The NRL, Bears Showing Disappointment, Negotiating Stages
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Mornings with Matt White
WA NRL Bid Chairman- Peter Cumins 10/10/24
Welcome back to the morning show right here on SCN 1170 am in Sydney. And a big welcome to those joining us for the next two hours on SCNQ 693 in Brizzy 1301 1170 is our all tell open line number. And of course, our text line is running hot this morning. Oh, four, five, seven, seven, three, six, seven, three, six. We are going to dig right into the big rugby league issue of the moment because the last few days have been full of surprises in the game from east coast to west. The Western Bears were informed their bid for an expansion team would not be accepted. The sticking point, it seems, the main one is a license fee. Well, the Western Bears bid chief Peter Cummins now joins me on the morning show. Good day, Peter. Thanks for your time this morning. G'day, Mattie. Is the Western Bears bid dead or do you see it on life support? Unfortunately, I see it on life support. Disappointing as it is. And where does that leave you with a glimmer? I believe so. I'm hopeful that we can have further negotiations with the NRL and come to some compromise on this license fee. Did you think Peter that at the stage that you'd got to and we'll get to the license fee in just a sec? But did you think because today, from my understanding, October 10 was meant to be the day of your official announcement. Did this blindside you? Absolutely. We were in Sydney having a meeting with our team and prospective CEO and chief operating officer and developing plans for the next 100 days and setting interviews with coaches and players and it really did come from left field. So, yeah, definitely blindsided. How did it unfold for you personally? Was it Andrew Abdo who gave you the call? It was. Yep. And how did that call go down? It was a very polite and civil conversation and he just advised us and our bid was unsuccessful and I just said to him, look, wherever this goes, if whatever your next model is and it doesn't pan out, then we're still here and keen to support. From my perspective, I don't want to put any obstacles in the way of getting a team to Perth. That's the only reason I'm involved in this, certainly not to make money when you look at the investment case for, you know, rugby league. The average NRL club makes just over $900,000 after tax. So, if you're putting up, you know, $30 or $50 million, it's not a good investment. OK, let's talk about the numbers, Peter, because it appears as though the big sticking point here is the license fee. It's my understanding that you were advised to put a license fee in your bid. You elected not to do that. Is that how it panned out and why didn't you include a license fee? Firstly, in the bid document or the bid request document, there was no stipulation of a license fee and it wasn't a condition of having a license granted. So, although we had had the informal discussions with Peter Beatty about a license fee, and a lovely man is, we for a number of reasons, and if I've got time just to articulate that, decided against volunteering a license fee. Firstly, no other clubs paid one, including the dolphins, the most recent, and who are in a much better position to be able to afford one. The other is that our view was that we bought a significant commercial and whole of gain benefit to the NRL through this Western Bear's license. It was new eyeballs, new members, new spectators, new sponsors. On the other element to it, obviously, was the reintroduction of the foundation club back into the NRL. And to load us up at a start-up stage with a very significant license fee, we thought was completely unreasonable, particularly when you consider that the establishment of a new club in an AFL state adds considerable cost, both on an ongoing op-ex basis as well as capex. So, we just felt that it was completely unreasonable. And so, our view was with all of those commercial and whole of gain benefits that far outweighed any benefit that a license fee was going to bring to the game. So, the informal discussions were with Peter Beatty. The advice around that license fee was not a stipulation, not a condition, but an informal advisory. Can I ask you what that number was? I mean, the figures put around was about somewhere between 15 and 20 million, and you've said publicly already that your start-up costs are, what, at $16 million. Was that around the figure that you would have been considering if you had to put something on the table? So, that was the number that was sort of informally advised to us. And when we considered all of that against these other issues, you know, there's a cash boom before you'd get a opportunity to kick a football of around $16 million. We've also got an issue with Western Australia not being a rugby league state, but we don't just have facilities that we can walk into on day one. So, the government's going to provide those scores, but that's sort of three to five years away. So, we had to make arrangements to build a suitable but temporary accommodation that cost around $10 to $16 million. Now, that is a significant cost that, you know, clubs on the East Coast don't have. So, if you add to that a $20 million license fee, on top of the $30 million that we've already raised, we're talking about $50 million investment to generate a $900,000 profit. I mean, it doesn't commercially add up. Now, you've got the top clubs like the Brisbane Broncos, their last year, public accounts, made $4.2 million after tax profit. So, you know, that's at the very top end. But if you take out those top clubs, that $900,000 average drops even further. So, we have to be really conscious that we just, I made the mistake with the Western Reds of the acceding to a number of requests to get that license, in which we had to pay, for example, to fly a first and reserve grade team to Perth for every game, as well as their own cost to fly to the East Coast. And that was a crippling legacy for that club. Now, I'm not prepared to do the same this time, and that was our reasoning. Peter, I understand that the commercial realities around why you made that decision. And I understand that in negotiations, there are intermediaries, there are people that you deal with in negotiations. And in this case, it was Peter Beatty, he had the dealings with some of the reporting out here on this side of the coast and it was on this side of the country saying, should there have been a more face-to-face relationship, essentially, with Peter Verlandis in this and more of a negotiation with Peter Verlandis? Do you think that was part of this or does that not come into play for you? No, I think that's true. I mean, I've been in business for 40 years. And with every transaction, there's generally a negotiation. You know, you start at one place and finish up somewhere else. We never got that opportunity. And I'm hoping that at some stage, we do get the chance to sit back down with Mr. Verlandis and have those negotiations. Because from our point of view, we're absolutely committed and we'd hate to see the opportunity lost. If the sticking point now is a licence fee, and let's call it 20 million, if that's a sticking point, would you consider going back to the league right now and saying we're prepared to discuss a figure and that figure and have those negotiations? Would you be prepared to put a licence fee on the table? Yes, we would. And we will be going back to the NRL to make an offer. OK. All right. Have you spoken to the North Sydney Bears in all of this? We have. And, you know, they're gutted because we'd started to develop a really respectful harmonious relationship with the board. And we were working towards, you know, all sorts of fantastic opportunities to promote the Bears and, you know, they're disappointed. But they're there and have faith that Mr. Verlandis phone call in which he indicated that there will still be a Bears opportunity is what they're hanging on to at the moment that they said to us that they'd love to still have that opportunity to do something with the Western Bears. And what about the partnership with the WA Government? Because the NRL has now said it would even consider going solo on this and doing a direct deal with the WA Government. Have you had any feedback from them? No, I don't. But, you know, I wish them luck because I don't believe that, you know, state government's role is to partner up on, you know, operating rugby league clubs or sports in general. So I don't know where that will go. And we'll wait to see. But no, will we definitely make an approach back to the NRL? All right, just a final one. Then when do you think that approach would be? Because as you say, it's it's on life support. So there's still there's still breath in this yet. But obviously, obviously the phone call's got to be got to be made. Is it sooner rather than later? Are you still aiming towards quick negotiations and possibly a 2027 entry into the NRL? Certainly, that sounds our hope still. But we've got to be very conscious of the fact that, you know, if there is a fee to be paid and it's significant, we've got to make sure that we can honour a commitment that we make. So that's what we're working on at the moment. Peter, thanks for your time this morning. You've been very generous with it. Wish you the best of luck. And let's see where the next step goes in this one. Thanks for the opportunity, Maddie. Good on you, Peter. Peter Cummins there in charge of the Western Bears bid, which still remains a glimmer of hope. So out of all of that, the numbers have been put on the table as far as what they consider is reasonable. What they consider is not reasonable. Interesting that there was no official stipulation on a licence fee in the bid or nor a condition. And informal discussions with Peter Beatty who played a critical part in all of this advised that way. So where does it leave it? It sounds to me as though it leaves it back in now in the hands of the Western Bears. Come back to the table. Has the bread been broken? Or could you get back to that table in the first place? It appears as though they've still got some outreach to the NRL and the ARL Commission chief there in Peter Velandis. And then it becomes a question of how much. 0457736736 is our text line. Our thanks to Peter Cummins for that right here on The Morning Show. A big program for the next couple of hours coming up. For those of you who've just joined us on SCNQ 693, as I mentioned, a huge welcome to you. We're doing a couple of things this morning. In the spirit of Bathurst, we're looking for some combos around driver pairings, so to speak. Not the driver pairings on race day, but you're on a road trip. Who are the two people that you want in the car with you? From the land of sport. Boy, have we got some great shout outs. But you've got to give me the reason why. Now you can go ying and yang. You can just have two pollucas in there, whoever you want. 0457736736, and we'll also fit in our last listener standing quiz. Thanks to golf box. So I've got a $150 voucher on the line for the winner of our last listener standing quiz. Five questions, we're going to angle them around the Bathurst 1000, which you'll hear right here here on SCN this Sunday. So we'll be doing that, I'll give you an alert. But 13000117, have your say now on what you've heard. We've got more information around that bid and where does it go next?