Staying at suburban grounds in the long term will destroy at least one NRL club, according to NSW Sports Minister Stuart Ayres.
Speaking at Sydney FC's lavish season launch at the Westin Hotel in Sydney on Thursday, Ayres also responded to criticism of the $1.6 billion stadium strategy, claiming that the figure was less than one per cent of what the government will spend on hospitals over the same 10-year period.
However it was his attitude towards smaller grounds that would be of most concern to NRL clubs who refuse to move out of dilapidated venues.
"My strong view is that suburban grounds, particularly in the rugby league space, will probably kill at least one, maybe two franchises if we don't make this transition into a larger network," he said on Thursday.
NRL crowds in 2015 slumped to their lowest average in more than a decade, and Ayres believes its current batch of stadiums are to blame.
"I would say one of the biggest reason why crowds, whether it's in football or whether it's in NRL, have dropped off, is because the product we offer the customers is pretty crap at the stadium," he said.
"In fact, it's the athlete that's still bringing people through the gate. It's not the experience at the ground.
"And when you've got such fantastic competition from TV, unless you can provide a high-quality experience from the moment that person leaves their front door, to the moment they return, you're going to choose to purchase or obtain their sporting content from somewhere else."
In March, the state government pledged to spend just $600 million on stadiums.
However just last month, Premier Mike Baird unveiled a more expensive stadium strategy comprising of four new arenas, including a 55,000-seater over the current Allianz Stadium.
ANZ Stadium would also be redeveloped, while Pirtek Stadium in Parramatta will also be knocked down and rebuilt.
Asked why the money couldn't be better spent on hospitals, Ayres said: "The key point here is that we can do both.
"One of the biggest challenges that we have in communicating government policy, is the numbers are so big now, they almost mean nothing to a person in the shopping aisle of your local supermarket," he said.
"So you've got to compare the actual total expenditure. That money that we spend on stadiums is less than one per cent of what we spend on hospitals in NSW over the next ten years.
"And if I was going to be really honest with you, I reckon that's a conservative figure. I reckon it'll be closer to half a per cent by the time we get to the end of the decade."
