Western Bears bid chief Peter Cumins insist they weren't low-balling the NRL as ARL boss Peter V’landys

Western Bears bid chief Peter Cumins has rejected claims his team tried to low-ball the NRL, saying it simply wasn’t feasible to pay a licence fee given all of the other start-up costs involved.

ARL Commission boss Peter V’landys dropped a bombshell this week when he formally knocked back the Bears’ expansion bid, just days before the club was expected to be announced.

The source of the issue revolves around the licence fee to enter, with NRL bosses frustrated the otherwise-impressive submission didn’t include a single cent for a licence fee.

The NRL remain adamant the issue will not mean a Bears franchise does not get up in Perth, instead hoping for state government support on the matter.

There also remains a chance the door is not entirely shut on the initial consortium, if a licensing fee could be sorted.

Regardless, Cumins said he was was left shattered upon being told his team’s bid was unsuccessful.

But the Cash Converters boss remains adamant the NRL’s demand for a fee in the vicinity of $20 million wasn’t doable given all the other costs involved.

“The initial costs were something like $16 million,” Cumins told AAP.

“Then on top of that you’ve got the $10 million for the temporary facilities, and that was going to be Ken Allen Field in Fremantle.

“So there’s $26 million before you’ve even kicked a football.

“We raised $30 million, that gave us $4 million of room as we start to get our revenues through the game and our subsidies through the NRL.

“So if we paid a $20 million licence fee, now it’s a $50 million investment.

“If you look at the Broncos, they trade on the stock exchange, they’re valued at more than $80 million and they’re the most successful club financially in the NRL by a country mile.

“From an investment point of view, people who put up money still expect to get a return eventually on their money. They don’t just donate it.

“The average net profit for an NRL club is $900,000 after tax.

“So if you stump up $50 million, the return is less than the inflation rate, so the value of your investment is going backwards.

“Commercially it didn’t add up.

“Then you read in the press that we were trying to screw the NRL and buy it on the cheap, and it’s just not the case.”

The West Australian bid also included the late backing of Sydney Kings owner Paul Smith and his business partner in former NRL commercial boss Paul Kind.

Complicating the matter is the fact the Dolphins were not forced to pay a licence fee when admitted to the league last year, given the leagues-club-backed franchise’s financial strength.

Although a start-up Perth team comes with risks, Cumins felt the value the club would add to the NRL would justify the league waiving a licence fee.

“They didn’t actually stipulate (the licence fee). That was another frustration,” Cumins said.

“In the bid document, it just said, ‘Nominate the licence fee you’re prepared to pay’ and we nominated zero.

“Our view was we were bringing more than $10 million or $20 million worth of value to the NRL.

“New eyeballs to TV, new members, new spectators, new sponsorship dollars.

“Increasing participation levels in WA in the sport, providing pathways for WA boys and girls to play at the elite level.

“All of those things in our view were our value in a licence fee.

“And we put a lot of detail into our submission as to why we elected to go with zero, and the quantity of those values.”

The West Australian government have already committed to delivering top-tier grounds, high performance facilities and development programs in schools in a bid to help the Perth bid get over the line.

But WA premier Roger Cook made a point that although the WA government was keen for Perth to have a team in the NRL, it wasn’t the government’s bid.

“This is not our bid. This is not the Western Australian government bid,” Cook said.

“It’s a bid by a WA team backed by WA NRL and we back WA NRL in that process.

“We understand the NRL have a range of concerns they want to work through.

“This is part of the negotiation process, it was entirely anticipated and I look forward to playing our role to support the WA bid.”

Cumins also raised concerns about the prospect of the NRL running a Perth-based franchise, and whether it would gain support of rival clubs.

“I’m not so sure that if it’s owned by the NRL that the clubs are going to be particularly happy about it,” he said.

“There’s a conflict of interest of the NRL owning it and competing against the other clubs.

“I see that being fraught with danger. But obviously they’ve thought about it.

“The invitation is still open from our side if whatever it is they’re trying to achieve is a no-go.”