I dont understand the ins and outs of it, so could someone please explain why the Bulls agreed to give up half their sky income for a few years? I'm not an economist but if your business is struggling with about £1.2 mil put in every year, how is it supposed to survive when you take £600k or there abouts off it?
Did the other Sl chairmen lose their minds?
I can understand some of the chairmen of more cash strapped clubs just being desperate for the extra cash, but clubs such as wire, wigan, leeds, hull and saints that arn't should have said this is madness!!

Yes it is isnt it

It was supposedly offered by the new owner, OK, as a sweetner to retain SL status, the presumption being he would personally make up that money , he did, but in the form of a loan, thats what he now wants back

You dont need to be a financial genius to see the flaws in this ' plan '

This is the biggest problem in RL, and all sports, new owners show incredible arrogance thinking they are somehow cleverer than the previous lot, and that despite doing exactly the same things as the last lot, the results will be different

A sure sign of madness, but a madness fed by fans unrealistic expectations

Quote: Saint Simon "I dont understand the ins and outs of it, so could someone please explain why the Bulls agreed to give up half their sky income for a few years? I'm not an economist but if your business is struggling with about £1.2 mil put in every year, how is it supposed to survive when you take £600k or there abouts off it? Did the other Sl chairmen lose their minds? I can understand some of the chairmen of more cash strapped clubs just being desperate for the extra cash, but clubs such as wire, wigan, leeds, hull and saints that arn't should have said this is madness!!'" Omar Khan didn't buy the old Bulls - he bought only the assets and set up a new business. The old Bulls were wound up and its creditors missed out. Because that isn't as good for the image of the sport and it drove a horse and cart through the principles of licensing, I guess the some of the other clubs needed a sweetener. If I was creditor I'd likely see that as the other SL clubs taking my money. 'Don't pay the creditors, instead give us £1.2m of your income over 2 years'. I don't know how much the old bulls owed (rumour was it wasn't massive), but I'd be surprised if the creditors mightn't have looked at a similar deal, and the Bulls could perhaps have come out of administration and stayed in SL without any great controversy. Unless they were offered that and wanted money up front - but you'd have to think a bird in the bush is better than none in the hand. Certainly, at least one chairman of a SL club (that runs bigger losses than most) did say things that seemed daft and short-sighted, even at the time. www.dailymail.co.uk/sport/rugbyl ... cence.html

Quote: Saint Simon "I dont understand the ins and outs of it, so could someone please explain why the Bulls agreed to give up half their sky income for a few years? I'm not an economist but if your business is struggling with about £1.2 mil put in every year, how is it supposed to survive when you take £600k or there abouts off it? Did the other Sl chairmen lose their minds? I can understand some of the chairmen of more cash strapped clubs just being desperate for the extra cash, but clubs such as wire, wigan, leeds, hull and saints that arn't should have said this is madness!!'" Omar Khan didn't buy the old Bulls - he bought only the assets and set up a new business. The old Bulls were wound up and its creditors missed out. Because that isn't as good for the image of the sport and it drove a horse and cart through the principles of licensing, I guess the some of the other clubs needed a sweetener. If I was creditor I'd likely see that as the other SL clubs taking my money. 'Don't pay the creditors, instead give us £1.2m of your income over 2 years'. I don't know how much the old bulls owed (rumour was it wasn't massive), but I'd be surprised if the creditors mightn't have looked at a similar deal, and the Bulls could perhaps have come out of administration and stayed in SL without any great controversy. Unless they were offered that and wanted money up front - but you'd have to think a bird in the bush is better than none in the hand. Certainly, at least one chairman of a SL club (that runs bigger losses than most) did say things that seemed daft and short-sighted, even at the time. www.dailymail.co.uk/sport/rugbyl ... cence.html

Okay for me, the reduction in sky money, was designed to cause a scale back of expenses. It's quite common by regulatory bodies. This didn't happen, hence the new problems arise. Company's can survive with turnover of 600,000 (and far less than that) but Bradford decided to have expenses to match previous income instead of actual income ... Which isn't good

No superleague team could survive with a turnover anywhere near that! I doubt a championship club could, wages alone at superleague, just for players are nearly treble that, plus all other staff plus the cost if running the venue etc

A question, especially for the financial geniuses at clubs.

Which would you rather have?
a) A gate of 10,000 paying £20
b) A gate of 20,000 paying £10

Do you think Bradford have the lowest operating cost in the league? Wakefield have shown this year how, when there are holes in the budget, don't get the charity buckets out, and try and cover it, but sort it out by cutting back. If Bradford had done that the first time round they wouldn't be in this mess now imo.

Instead, they continued to live beyond their means, with no way of covering the hole. No doubt incompetence, lies and deceit have made things worse. But can you say they have made an attempt to live within their means?

Within a year? Very unlikely given that they were losing 500k - 1million before this reduction, they'd have had to shed over £1 million, maybe £1.5 million in a year, a quarter to a third of their turn over, that's just not possible when the main cost (players) have contracts

However crazy the deal was, whereby Bradford agreed to sacrifice a substantial chunk of their TV income, OK did "agree" to it (having said that, I'm not sure that they were given too many other options)

Having said that, it was crazy,l to share these monies between the other SL clubs and nobody seems able to explain the reasoning behind it.
It would have been understandable if the cash was used to pay off certain creditors or taken as some kind of bond but, nobody has ever tried to publicly explain the why's and where's.
Equally, there seems to have been too many heads in the sand and to "find" such a huge hole in the finances with just a few weeks to the start of the season seems either a clever plan (as it is too late to replace them in the comp) or, just plain stupid.

No one actually knows the ins and outs of it. Not on these boards anyway. Oh there's plenty on here who'll tell you they know when really all they're doing is pulling things out of the air and calling them facts.

TBH, I'm not sure the parties involved know what is actually going on.

As for wire, wigan et all saying this is madness, I'm told they did but were ignored.

As for what seems to have happened, just looking at what's been put out in the public domain, OK said he wanted to sell, he and his people lied to the incoming owners about the financial state of the club when agreeing the sale. Once the new owners elect actually got their hands on the club, they found out the actual state of play and were not happy and refused to pay back any money OK said he put into the club. Because of this OK refused to agree the transfer of ownership so the new owners elect (who'd been doing their best to try and reverse the damage done under the short reign of OK) said "Right, bugger you then and left on Xmas Eve.

So, from what I gather, the club is still ticking along but as to what happens next? Your guess is as good as mine

And when ok bulls was formed, they chose to take on those player contracts when they could of released the players (like London) and built a team whose wage fit better with the budget they had. There was no relegation, they could of played their u18s for a year, whilst they rebuilt. Instead they chose to go with the exact same business plan as the previous administration ... Which went bust ... With less sky money ... And then blamed the sky money for getting in trouble ... Even though they copied a failed regime ...

A 20k gate paying £10, as you can then sell them programmes, food etc to bring the spend per customer up.

However, if you can show me any hard evidence that halving ticket prices doubles attendances I'd be pleasantly surprised.

I doubt it has happened, in fact the Bulls after copying Cougarmania are probably the nearest example in this country without cutting the admittance fee.

Even if you gave FREE admittance to some grounds it is doubtful if the attendance would increase by many.

The game needs to sell itself, as do the clubs. Too many take the easy option of SKY money, Ta and that's it.

A new business model is required and aiming for option B must be a part I would suggest.

You have to know the elasticity of demand before you start altering price.

How many fans are sat at home saying if it was £10 cheaper I would go???
I would think if you halved the price at most RL clubs you would get an increase of 1 - 2 thousand.

There is also the danger of underselling a product. Once you under sell it's hard to get any price back into it. You could say part of the problem at Bradford the first time round was the £99 season tickets. Once the initial novelty factor wore off, it was hard to get as many back next year for the same price. But then increasing the price to cover this puts more people off again.

Most products look at trying to maximise the profit from each sale. I don't think SL clubs rip off fans at the moment.

As for the £500,000 I've no idea of the purpose of that. I thought when it was initially announced that it was a round about way of the RFL getting back it's loan money and returning the Odsal lease to the club. Now it just seems to have gone into the black hole of the clubs. No doubt helping some, but will they have increased their costs to matched increased revenue. Then when the extra money stops next year, will they find themselves in more difficulty??

It doesn't. Bradford tried the cheap ticket route and in theory, it's a good idea in that you can make up the shortfall with concessions. The trouble is, what if those people don't turn out for every game and just show up for the big matches? Which is what a lot of the people who bought the 10k season cheap tickets at Bradford did and there were plenty of games where the gate was announced at over 10k but there were definitely less.