O'Neil warns on expansion

IN the face of a “terrifying” recession, sporting codes might not only have to forget about expansion but actually contract in certain areas.

That's Australian rugby boss John O'Neill's warning to rival football codes eyeing sport's next great battleground in western Sydney, despite the fact that rugby itself is contemplating an expansion.

“This recession is terrifying,” O'Neill told a gathering of administrators from the big five sports - the four football codes as well as cricket.

“So when you are thinking about broadcasting deals, you've got to be realistic about the market,” he said.

“We are all in ambitious mode, but you might need to contract in certain markets.

“The AFL showed great courage years ago, causing pain in their own backyard in Melbourne to expand nationally.

“But it might be there are certain markets where you are saturated.

“It's not just about expansion for expansion's sake.

“It's about getting competition sizes right, and living within your means.

“Like every other business in Australia, sport has enjoyed a 15-year run of an economic boom.”

O'Neill said broadcasters and sponsors would not necessarily have “purely pessimistic” glasses on when it came to renegotiating contracts.

“We will come out the end of it (the global recession),” he said.

“But there is an adjustment to be made, to be realistic about it.”

The AFL, meanwhile, is taking the long view in its plans to start up an 18th team in the rugby league heartland of western Sydney in 2012.

Insiders say the venture could cost up to $20 million a year to subsidise it for 10 years.

“In the strategic context, it's 20 years in the making,” said the AFL's NSW/ACT general manager Dale Holmes.

“At the end of the day you can't buy hearts and minds.

“You have to build up from the grass roots; you have to build grounds and goal posts.”

NRL chief executive David Gallop warned that protecting the quality of a competition was crucial.

“We put a lot of work into ensuring there are no easy games (in the NRL) and that supporters know their teams are a chance against anyone in the competition,” he said.

O'Neill added: “It took the Swans a long time to become part of the tapestry in Sydney - 15 years, a lot of money and ultimately a premiership.”

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