The long anticipated “exit” of the ownership of NRL clubs by News Limited is likely to begin with News reportedly selling its majority share in the North Queensland Cowboys – possibly as early as today.

If the story is true, then News Limited will hardly be impressed that it was broken this morning by the Fairfax owned Sydney Morning Herald!

The proposal to sell the stake in the Cowboys has been under negotiation for six months and will involve the Cowboys Leagues Club owning the Cowboys franchise.

But the deal will involve substantial financial backing for the Cowboys from Townsville’s two municipal authorities – the Townsville City Council and the Thuringowa City Council.

The councils are to merge in March next year under sweeping reforms to local government in Queensland. They will have a combined annual income of over $225 million.

The Cowboys, after years of making losses, are profitable, thanks to a much improved performance by the team in recent years. They are currently running fourth in the premiership, and are benefiting from having two of the game’s highest profile players in their ranks – Jonathan Thurston and Matt Bowen.

News is believed to be getting around $2 million for its stake in the Cowboys. In 2002 it sold its interest in the Canberra Raiders to the local rugby league club, but maintains a majority interest in the Brisbane Broncos and its ownership of the Melbourne Storm.

The Storm continue to operate at a substantial loss but the position will improve when its home ground, Olympic Park, is upgraded by the Victorian Government – and it wins the 2007 premiership.

The Broncos are profitable, but News has not shown any interest in selling its share – almost certainly because of the strategic importance of the Broncos in Brisbane where News has an effective monopoly. It also helps that Lachlan Murdoch, who remains a directors of News Corporation, is an ardent Broncos fan!

Despite rumblings from sources linked to the Australian Rugby League, News shows no sign of selling its 50 per cent stake in the National Rugby League.

If anything, by reducing its ownership of NRL clubs, News is taking away one of the arguments against its continued 50 per cent ownership in the NRL!