Horse trading: News look to cut Broncos loose
For sale ... the Brisbane Broncos. Photo: Getty Images
NEWS LTD may consider selling its majority stake in the Brisbane Broncos in a historic move as the media company continues its strategic exit from rugby league.
Sources told Fairfax Media an accounting firm had been engaged to perform due diligence on the club in a move that suggests News is preparing for a prospective sale of its 68 per cent shareholding in the Broncos.
The revelation follows an approach by an international consortium interested in buying News Ltd's other NRL team, Melbourne Storm, on the condition that premiership-winning coach Craig Bellamy remains in charge.
Suggestions the Broncos could also be up for sale came as no surprise to rugby league insiders, given the rapidly changing face of News's involvement in the sport. The company handed back control of the game to the ARL Commission last February and soon after said it would look to relinquish its interest in the Storm. Now it appears the media company is considering the same move at the Broncos, which remains one of the blue-chip brands in Australian sport. Along with six premierships in the cabinet and a capital city market all to itself, the club has net assets of more than $26 million and returned a pre-tax profit for the June half-year of $2.22 million.
It is understood the Broncos would be worth at least $23m but it is hard to estimate what they would fetch on the open market. As the Broncos are a publicly listed company, a News spokesman said he was unable to make any comment other than to say: ''We are very happy with our shareholding.''
However, News's influence on the game has diminished in the past year, with the company agreeing to forego the first and last rights in broadcast negotiations it held until 2027 during discussions for the new television deal. By doing so, the News-controlled Fox Sports is less likely to retain the pay-television rights after the present deal expires in 2017, and there is speculation the NRL may broadcast matches itself.
With the departure of league diehards such as John Hartigan, Peter McCourt and Lachlan Murdoch - one of the Broncos' biggest backers within the corporation from the executive ranks at News, insiders say the passion for the game has diminished at the company's Surry Hills headquarters. Under chief executive Kim Williams, News has begun a major restructure in an attempt to transition itself for the future - as most media companies, including Fairfax, are doing.
In that regard, selling out of the Storm and the Broncos may be seen as a cost-saving move. But any change of hands at the Broncos would be a historic moment in the game as the Murdoch empire has been involved with the club since 1994, when Traveland - a subsidiary of the News Ltd-owned Ansett Australia - became the major sponsor. Ansett later became a sleeve, and then jersey, sponsor of the Broncos.
News took a controlling share in March 2002 and has repeatedly said that a club considered the benchmark in the NRL was not up for sale.
Among the potential buyers if the Broncos sale goes through are the franchises seeking a licence to enter the NRL, including the Brisbane Bombers, Ipswich Jets and Papua New Guinea. Bombers director Craig Davison was one of three businessmen who owned a 24.5 per cent share of the Broncos and asked News to sell its majority stake in 2011.