It’s Thursday the 12th March 2020. The sun is setting over the western grandstand of Bankwest Stadium as the Parramatta Eels prepare to open the season and face their traditional rivals the Canterbury Bankstown Bulldogs.
Sitting in the crowd in the Ken Thornett Grandstand is Eels CEO Jim Sarantinos who was appointed to the position in November 2019 after spending three years as an administrator and Chief Operations Officer.
The clouds gather
Parramatta have been looking forward to a near-sell out crowd to begin 2020, further building on their 2019 season that saw the opening of Bankwest and an end of season demolition of the Brisbane Broncos in front of record crowds.
However, brewing in the background is COVID-19 which has reached Australian shores and whispers have begun circling of the NRL season being impacted.
Sarantinos says the uncertainty mere days before kick-off led to an unexpected drop off in the crowd with the final count being 21,000 fans.
“We were expecting a crowd of somewhere between 25,000 and 27,000. So near upon a sellout and all the ticket data leading up to the game suggested that we were going to achieve that. Then it was probably only two or three days before the game that we started to hear murmurs both through the government and then flowing through the NRL that there was potentially some uncertainty around those round one games.
“What we saw was that there was probably a good portion of people who had purchased tickets who didn’t turn up because I guess the fear had started to kick in, or at least the uncertainty had started to kick in and we ended up with a crowd of about 21,000.”
The situation unravelled quickly from there. By the Sunday night game of round one only 9,137 fans came through the gates of WIN Stadium to watch the St George Illawarra Dragons and Wests Tigers.
In fact, the only game to manage more than 11,000 fans alongside Parramatta was the match between the North Queensland Cowboys and Brisbane Broncos that welcomed 22,459 spectators to the opening of Queensland Country Bank Stadium in Townsville.
The fewest fans attended the match between the South Sydney Rabbitohs and Cronulla Sharks which saw only 6,235 supporters trickle through the gates of a cavernous ANZ Stadium.
By the following week, NRL games were being played in front of empty stadiums as Australia went into an unnerving and uncertain lockdown.
“We flew (Parramatta) up to the Gold Coast to play round two away on a Sunday night by private charter,” says Sarantinos.
“I think the AFL held a press conference that afternoon saying that they were going to be postponing their Premiership and it looked like we were going to be doing the same thing. So the guys basically went onto the field at 6 p.m. that Sunday night with us having a reasonable suspicion that that was going to be the last game they were going to play for a while.”
The NRL is postponed
The postponement of the season brought the usually runaway start to the NRL season to a shuddering halt. The administration and clubs scrambled to understand where they stood.
Cash flows had stopped, broadcast partners were threatening to walk away and the NRL was trying to work out how to protect the players from a virus that did not discriminate.
For the Parramatta Eels, they were looking at improving upon a 2019 year that saw a bounce back from the disaster of 2018. They may have bowed out in the second week of the finals, but 2020 promised an uptick both on the field and off the field.
Sarantinos says the COVID-19 lockdown severely threatened the club’s budget given it had registered a $5.2 million loss in 2019 and was hoping to break even in 2020.
“We were expecting 2020 to be a step in the right direction and probably look to halve that loss as a further step to financial sustainability. So we were certainly on a journey and the view was that by 2021, being this current year, the club would be at a break-even point.”
With the season suspended, players, staff, coaches and indeed, all of Australia in lockdown the Eels, like all professional sporting clubs and many businesses suddenly without income, had to find a way to cut down on spending to stay afloat.
“I guess as with any business there were some really difficult decisions to make and essentially from the middle of March our operations were drastically impacted and within a couple of weeks they almost ground to a halt. And as was the case with most businesses, we had to make the decisions around well, if there’s uncertainty to our revenue impact and what flows through then the only way that you can manage that is by managing the costs.
“So we really tried to pare back our expenses and our expenditure across the business as much as we could. That also involved some impact on our staff who were stood down or people took pay cuts. It was a really difficult period and many people were impacted quite significantly, but the club basically had to make a decision that all clubs were making at that time.”
Sarantinos adds that the 16 NRL clubs, in what could be seen as a rare show of solidarity, worked together to ensure they all survived. It’s something international competitions such as the English Super League and English Premier League didn’t see as clubs were often vying for outcomes that best suited them and in the case of the Super League, saw the removal of the Toronto Wolfpack.
“I was in regular dialogue with all the CEOs across the other 15 clubs. We developed a really close working relationship because we were all going through a really unfamiliar process and we were all bouncing ideas off each other as to how we best cope over a couple of months while the competition was shut down. And the reality was that the only way that you could really do that as an immediate step was to control your expenditure and then the key thing for us was communication.
“Whether that be internally or externally it was as best we could being transparent and frequent with our communication with our staff, with our sponsors, with our members. And if that meant telling people that we didn’t quite know what was going to happen next, we thought it was still important to provide that regular communication and I think that that sort of carried a lot of weight for us in being able to preserve the relationships that we had with our sponsors and our members,” he says.
As the lockdown dragged on and fans desperately clamoured to fill the live footy shaped hole in their lives that replays of classic matches couldn’t fill, the NRL was busy trying to work out how to return to the field.
The NRL had to work with Federal and State governments to abide by COVID-19 guidelines while trying to find a way to allow 272 athletes to belt each other every weekend.
From a club’s perspective, Sarantinos says the NRL was easy to work with, providing as much information as it could given the game wasn’t in control of the public health situation.
“I mean they were very transparent and really once things got to a point where there was obviously a high degree of risk of the spread of covid, it was almost out of their hands because we were basically following government guidelines and anything that we were able to do was subject to government approvals.
“So I guess to some degree the NRL was following orders, and then those orders were flowing through. Obviously there was an appetite from the NRL to try and persevere as much as possible. But I think the decision effectively got taken out of their hands.”
The game returns
On Thursday 28th May 2020 live rugby league returned. The Eels launched the season for a second time, this time in front of an empty Suncorp Stadium against the Broncos. While the vision of empty stadiums was jarring for fans and broadcasters, the game was welcomed back by an entertainment-starved public.
However, after being shut down for more than two months and with fans not returning to games until 12th June, what was the impact on Parramatta’s bottom line?
“I guess through a combination of the resilience and the support of our people, some significant sacrifices being made, the game to some degree being brought to a standstill, together with some financial support from the NRL and the government, together with incredible support from our members and sponsors, we actually recorded a considerably better outcome in 2020 than what we budgeted for. So the club actually recorded a profit of just short of $1.4 million in 2020.
“Which is the first time that it’s been able to record a profit in what seems to be anyone’s memory and it gives us a really strong foundation to be able to build on. We’re hopeful that the circumstances in 2021 look very different obviously for a number of reasons and our fans are allowed to return in droves and we don’t need the government support from a COVID perspective. But we’re also expecting to generate a profit in 2021 and I think the club is well and truly on the path to that financial sustainability,” Sarantinos says.
He adds that some government funding and NRL club grants assisted in the club achieving that profit.
“Government assistance was passed on to, by some degree, to our staff and was obviously critical in helping us to retain as many of our staff as we could and that was a key focus for us to keep people in jobs for as long as we could.
“Each of the clubs kind of benefited from some additional funding from the NRL. If the governing body was ever going to dip into some cash reserves to provide support for the 16 clubs and make sure that the competition remains sustainable, this was the time for it. So that assistance has obviously contributed to the outcome, but I guess we’re planning for a somewhat normal operating environment in 2021 and the club expects to generate a profit in this period.”
2020 was a challenging year for everyone. Many people living outside of Australia and New Zealand are still facing some of those same challenges. But for Parramatta there was a silver lining that, whilst their on-field Premiership drought was extended for a further year, off the field they are in the best position they have been in decades.
“I think it’s (2020) one that was met with incredible challenges and as all other clubs and businesses experienced, but I think without question we’ve moved forward as a club and as a business. We finished the season second in membership. We managed to grow our membership base despite all the uncertainty from last year and that’s a testament to the loyalty and support of our fans. We grew our membership base by 15 percent last year, which was the largest of any Australian professional sporting organization. I think the next best was one of the clubs in the AFL at 2 percent. So that was a great achievement for the club.
“I think we’ve been able to demonstrate during the course of 2020 in terms of how we communicated with our existing sponsors and the forward progress that the club has made that’s allowed us to onboard a series of new sponsors and sponsors of a high calibre which means that our sponsorship program will grow somewhere in the order of 30 percent in 2021.
“We’re looking at refocusing our community programs to align with our key strategic objectives to make sure that we’re making a genuine difference in western Sydney. So I think off the field the club is in as good a shape as it’s ever been. It’s difficult for me to comment on that because I know I’ve only been with the club for a short while but many people that I guess have been in and around the club for a long time have made those comments to me, which are greatly appreciated and I think we’re going to build on where we are over the next couple of years,” says Sarantinos.
The Kellyville Project
Adding to the club’s off-field improvements is the Kellyville project, which is seeing the club build a centre of excellence, training precinct and community facilities that will house all of Parramatta’s junior grades through to their NRL squad.
Sarantinos says that despite the pandemic, the project remains on track.
“It hasn’t impacted things dramatically. We had always planned to undertake that project in a series of stages and work with the State and Federal government together with our local partner in the Hills Council to help drive the funding in the staging of that project. There was always an expectation that the next stage of works would take some time to plan for and also raise the funding for, so it wasn’t necessarily the case that it was a whole heap of work that was planned that suddenly ground to a halt.
“What did happen was because the government, and rightly so, needed to be focused on stimulus for immediate needs for businesses across the country the speed of the discussions that we were having around funding for our infrastructure probably slowed down a little bit which is completely understandable.
“But that’s well and truly back on track. We’re very close to finalizing our arrangement with the federal government on securing $15 million dollars for the next phase of the project which will be our community centre and we’re in advanced discussions with the state government on securing funding for our high performance centre. I wouldn’t say thatCOVID has necessarily impacted works that would have happened in 2020. It probably has delayed the planning element to some degree.”
Despite the planning delays, Sarantinos says he expects the second phase of the project to begin by the end of this year.
“We hope to commence construction on the second phase of works which is our community centre. It will incorporate a boutique grandstand so that we can host match days here at Kellyville, particularly for our Junior rep programs throughout the season together with male and female amenities, a community gym, function centre, facilities to allow us to deliver our community and education programs and other community assets like cafes, kiosks and potentially some sports medicine and commercial spaces.
“That community centre, we’re hoping to commence the works on before the end of this calendar year with a view to that hopefully being completed within 12 months. Then there’s still some work to be done to secure the funding for the high performance centre. So we’re working with the state government on that at the moment and that is likely to be a third phase of the project.”