Australian Rugby League Commission chairman John Grant said the sport needs to improve its attractiveness to sponsors and business after the NRL slumped to a $18.7 million loss in 2015 despite record revenue.
The result was a $39 million less than the $20 million surplus the previous year, with financial details released by the NRL showing the governing body lost $12.5 million in the year ended October 31, 2015, despite revenue of $334 million.
The deficit widened to $18.7 million due to losses sustained by the Gold Coast Titans and Newcastle Knights, both of which are owned by the NRL, and state associations in Western Australia, South Australia and Victoria. The league has been hit by a series of player scandals in recent years.
There was $49.6 million surplus in 2014. Losses are forecast for the next two seasons.
"We have moved from a phase of accumulation to distribution, which was always the plan during the five-year [broadcast rights] cycle," Mr Grant said.
"So we are on track. What the results show us is that in terms of income, we are just as attractive to the broadcasters as the AFL but there is a still a significant gap in terms of sponsorship and commercial income. That is where we think the opportunity exists for us to further grow."
Non-broadcast revenue was up 9 per cent to $129 million and broadcast revenue remained the same at about $205 million.
Operating expenditure rose $19 million to $127 million, including a $12 million increase for event, game and sponsorship expenses to $71 million. Administration costs rose about $2 million to $23 million and the 16 clubs received $219 million in distributions, up $26 million.
Surplus costs identified
Mr Grant said the league had identified costs that could be stripped out of running events such as State of Origin and that the sustainability or future fund now worth $52.8 million, would remain untouched.
The league signed a record five-year $1.8 billion deal with Nine Entertainment Co, Fox Sports and Telstra late last year, which will be signed after the current contract expires at the end of the 2017 season.
Mr Grant said $50 million of the new deal would be brought forward in the next two years, $48 million of which would flow to the clubs – which will also receive 130 per cent of the salary cap from 2018.
"It means all the clubs should be profitable from then on," he said.
South Sydney and Brisbane Broncos are the only Australian-based NRL clubs to record profits. The Australian Financial Review revealed this week that 2015 premiers North Queensland Cowboys made a $360,000 loss despite their grand final win.