The Business behind State of Origin

Ross Greenwood speaks to NRL CEO, Todd Greenberg, for a preview of a State of Origin preview and how sponsorship are bringing in hundreds of millions of dollars.

Introduction: The Business behind State of Origin

Ross Greenwood: Great to have your company on Money News here on State of Origin night one. It’s going to be absolutely fantastic. The MCG, 7:30 tonight. Of course, you’ll have it live here on Macquarie Radio through Channel Nine, and all that type of thing. It’s going to be brilliant. There is no doubt. Of course, a new generation for Origin. Both not only with the New South Wales Blues, but also then even with the Maroons, with new look sides. Lots of debutants coming out.

Then, remember, it’s also important for the game of rugby league itself. It is one of the great showcases of the game, one of the great events, if you’re there also. The man who is, if you like, the ringmaster to a certain extent is Todd Greenberg, the chief executive of the NRL. We generally talk to him on this night to see the state of health of the game. He’s on the line right now. Many thanks for your time, Todd.

Interview with: Todd Greenberg, CEO, NRL

Todd Greenberg: My pleasure and really nice to talk to you, particularly at such a really important moment in the rugby league season and Origin tonight in Melbourne. An enormous crowd and no doubt the ratings on regular television through our broadcast partners on Channel Nine will be pretty big as well. A big night for the sport. A big opportunity for the sport tonight.

Ross Greenwood:  It is also right to say that those ratings and the audiences that come for it and not only at the ground, but also then on those television audiences, the radio audiences, that’s the reason why you can justify the many hundreds of millions of dollars, billions of dollars these days, that basically flow into the television rights that come.

Todd Greenberg:  Yes. That’s a very good description. Importantly, that flow of funds comes into the game and then essentially is divided and distributed out to a number of important areas, the players obviously, the clubs, sustainability. As important as all of those is the grassroots of the game. We continue to make big investments in the grassroots of that sport to ensure that the next generation, both boys and girls are playing rugby league.

As I said, last year, State of Origins rugby was the highest ranking program on television bar none. I know people like watching the jungle shows and cooking shows, and reality TV shows. The reality for us is that live sport still holds very, very strongly for broadcast television.

Ross Greenwood:  I then go to the other side of the business because it’s also about the sponsorship that you can bring, not only for to the television audiences, but then for the teams and for the whole event generally. In that regard, is that an easier or more difficult thing to do these days?

Todd Greenberg:  I think the complexity of sponsorships and partnerships are changing very much in the modern era. I think digital is a very important part for people to be able to connect with consumers directly. It’s not as simple as slapping a logo on and putting it on television, there’s a lot more depth to the partnerships that we have. We’ve got some very good partners tonight who’ve invested heavily with Rugby League. They get to showcase their brands to a very, very big worldwide audience tonight. It’s very important for us again to be able to use the game’s platform commercially, to drive the value of the sport as high as we can.

Ross Greenwood:  Just explain that depth because a lot of people won’t understand that necessarily. It’s not just simply as you say, slapping on a logo and saying, “Right, there’s the audience, away you go.” It’s got to be able to prove results to those sponsors because that’s the reason why they’re ultimately coming.

Todd Greenberg:  Absolutely. There’s no better example as tonight with Holden, who are a significant partner of the game, the naming rights partner of the series. The true metric for Holden would be does their investment return more sales of cars, of Holden vehicles back to their customer base. We need to use everywhere with all the mean at the game and now meet through our assets, they’re in a digital and our customer database to make sure that for those people that we looked to purchase vehicles, we want them to purchase those vehicles through our partners, those people who are putting big investments in the sport.

It’s again, working with those partnerships, having really important dialogue to understand their objectives and using the game’s reach, voice in order to deliver on that. Ultimately, those sponsors will hold us accountable whether they get a good return on that investment.

Ross Greenwood:  We know that behavioral issues in the past have cruel sponsorships with big teams and obviously with the game in general. Do you think these days, as time goes on, that the players, the clubs themselves, are more conscious of the impact of their behavior on the commercial outcome, the sponsors and therefore even their ability to be paid, do you think that the message is finally getting through?

Todd Greenberg:  I think there’s no doubt the message is through. Even to the point, Ross, that we completed a very detailed collective bargaining during the last year with players. The outcome of that was we had projected revenues of which we share with a salary cap. The players have real skin in the game now, because if we can outstrip the budgeted forecast, then we can drive additional revenues. Then the players get a dividend share through that. There’s no better way to demonstrate that if we all grow the game together, that the grassroots win, as well as the clubs and the players will win because they’ve all got skin in the game.

I think that’s a really important achievement that we made last year, so that as we all drive hard and behave well and push our revenues forward, that everyone gets a return. There’s never been a better partnership model, I don’t think in Rugby League. That’s something that I’ve impressed upon all of our senior players, that let’s grow together, and if we do, we’ll make sure we achieve our collective ambitions.

Ross Greenwood:  Even though I know you as a person would not wish ill on another sporting code. If there are problems in another sporting code taking place right now, does that open up opportunities for your code or other codes for example, to take opportunities with sponsors, if they might suddenly decide, “Well, we don’t want to be there for the time being, we’ll come here to Rugby League, we think we’re getting better bank for our buck.”

Todd Greenberg:  I think obviously the numbers and the metrics will speak for themselves. To be fair, I think it’s less an issue about taking sponsors from other sports, it’s more an issue about making sure that those brands find professional sport as a good investment tool. I’ll like to think that all the major sports can continue to drive strong commercial returns because we have a product that is more relevant than ever before.

Because we’re one of the last parts of the puzzle where live attendance and live viewing through sport is really the only thing you can’t stop and pause for your own pleasure. Sport becomes very valuable in a difficult marketplace, particularly for broadcasters at the moment. Sport, you would say, is demonstrating its return for investment for those who are actually spending strongly.

Ross Greenwood:  Just a quick one, Todd. Have you had a call from Cricket Australia at this stage yet or not?

Todd Greenberg:  No. I haven’t. I must say that I think there is a reflection on James Sutherland who I’ve got to know well over a period of time. It’s a phenomenal innings, to use an expression of cricket. 17 years in the top job there. I think he deserves enormous credit.

Ross Greenwood:  The thing is, given the way in which now, the sport of cricket is clearly going through its own challenges, somebody’s got to step into that and really cement the whole thing back together again and make certain that those sponsors come with the crowds, come with the product that’s good. It’s all the types of things that you have to deal with in Rugby League on a daily basis.

Todd Greenberg:  Yes. I think that’s a fair summary. At the end of the day, we run professional sports and the big thing that we have is about engagement. We really want people emotionally connected with our sport, which is why from time to time, there will be dramas with referees or judiciaries. People will have views on things and that’s okay because the reason they’ve got views is because they care. They care passionately about it. That ultimately, is what drives the value of professional sport. We should never lose sight of the fact that well, sometimes there are debates. Those debates are healthy because it means that people genuinely care.

Ross Greenwood:  Final debating point for you, and that is mad keen New South Welsh men and women and Queenslanders will be watching it on television tonight. Many of them will have traveled. The MCG, as a venue, or Adelaide next year, for example, as a venue as it’s been announced. Again, how do you justify that to the mad keen fans of the Blues or the Maroons?

Todd Greenberg:  Look, it has created some debate, Ross. I think it’s a simple one for us. We want to showcase the game to a broader audience. We want to bring new fans and we want to bring new participants. The only way you do that is to take your biggest and most profiled events and take them to new opportunities and new markets. That’s what we’re doing here in Melbourne tonight. We’ll have 85,000 plus at the MCG and somewhere in the vicinity of four million people watching on the broadcast.

Next year, it will be in Perth. The year after will be in Adelaide. These are important deals for the long-term health of the game. If you stand still, you’re not going to grow. For us to grow, we need to be bold and we need to be innovative. That’s exactly what we’re doing. I think it’s strategic the way about how we do that.

Ross Greenwood:  Todd Greenberg, enjoy State of Origin one and the rest of the series. We always appreciate your time here on the program.

Todd Greenberg:  My pleasure. Thanks for the support, Ross.

[00:08:26] [END OF AUDIO]

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