ST GEORGE greats Ian Walsh and Graeme Langlands have urged the Saints' joint venture with Illawarra be protected at all costs as the State Government's poker machine tax eats into leagues clubs' coffers.

With the future of one of the game's most famous clubs under threat, suggestions have arisen the merger be abandoned after its failure to win a premiership in its 10 years.

The situation has been highlighted by the St George Leagues Club's financial woes - a $1.6 million loss in the last financial year (see News, page 14).

The club's poor financial state has resulted in a 44 per cent cut in the grant given to the football club.

Steelers chairman Peter Newell, who is also ClubsNSW chairman and on the St George Illawarra board, said he had heard rumours the joint venture was on shaky ground but said the club's immediate priority was to make up for the $2 million shortfall from the leagues club's grant.

"The Dragons have lost $2 million out of the St George Leagues Club," Newell said. "That's a 50 per cent cut which has got to be made up from somewhere - gate tickets, sponsorship or somewhere. Or you have to make cuts to accommodate it.

"It's a serious issue."

Walsh and Langlands say the

Illawarra union must be preserved.

"I believe the merger will always be in the best interests of the club," Walsh said. "The price of footballers has gone up so you have to develop your own and there is no greater nursery than the Illawarra area. For St George, around Kogarah and Rockdale, it's a restricted area so we had to move out and expand."

Langlands said: "It is the best thing for the club because it's such a big schooling area down there. It'd be silly to get rid of them. Someone else will just come along and pick them up."

Former Dragons prop Paul Osborne was stunned to learn of his old club's plight. "St George is the greatest brand in rugby league … the red V … it's priceless," he said. "It's not like we're trying to sell al-Qaeda in Washington DC."

In its annual report, St George Leagues Club forecasts the poker machine tax and smoking restrictions will continue to have a further impact on future revenue. There is also proposed legislation to make poker machines the exclusive domain of casinos and racetracks within 10 years. If passed, this is expected to have a devastating effect on leagues club profitability.

The issue of the St George Illawarra joint venture is certain to become a political hot potato for the NRL if rebel ticket R2K (Return To Kogarah) wins up to three seats on the board in the elections that start tomorrow. R2K leader Lachlan McLean said the group was not "anti-Illawarra" but that it was time to look at the viability of the joint venture.

"R2K is not against Illawarra," said McLean ahead of the election, which runs until Thursday. "It's a good nursery but it [the relationship] needs to be reviewed. Issues need to be considered if they don't contribute anything [financially] to the joint venture."

Fellow rebel Graeme Fleming, whose father John served as St George boss when they last won the premiership in 1979, told The Sun-Herald the leagues club's annual grant to the football club had shrunk from $5.6 million two years ago to $2.5 million this year.

"The pokie tax and anti-smoking rules have had an impact but the reduction in grants to the football club has been heavily disproportionate," Fleming said.

"We deserve a better explanation of where the money is going."

McLean's ticket has been built on the promise that up to half of all Dragons games would be played at Jubilee Stadium. It is also committed to helping restore the leagues club to the grand old days of being the "Taj Mahal" of Sydney's clubland.

Newell said football would have died in the Illawarra had the joint venture not gone ahead. He said it must be maintained no matter what the cost. "I've heard that talk [about the Dragons dumping the Steelers]," he said. "I've heard how it's been a takeover and it shouldn't have happened. League in the area would not have gone ahead without the merger. The money just wasn't there.

"The people who knock the joint venture don't understand that it's a genuine joint venture, not a takeover. St George have bent over backwards to help at Illawarra's end.

"They've never tried to do the wrong thing by us at all. They've supported us and I'd like to think we've treated them in the same vein. It hasn't been a dogfight at all.

"People shoot from the hip a bit. They're passionate, they're not all dills. They wear their hearts on their sleeves a bit and I suppose we all do. But facts are facts."

When the joint venture was formed in 1999 it was on the understanding the Dragons would provide the cash and the Steelers would produce the juniors. Illawarra have fulfilled their end of the bargain - the 2008 first-grade roster contains home-grown products Matt Cooper, Ben Creagh, Ben Hornby, Brett and Josh Morris, Justin Poore, Jason Ryles and Dean Young.

The Steelers' inability to provide money to the venture is a sore point. It still owes close to $2 million from an $8 million loan it needed to bail it out of trouble four years ago.

That debt was reduced thanks to the benevolence of WIN TV boss Bruce Gordon, whose company contributed an estimated $6.5 million for a 48 per cent stake in the Steelers in 2006 - or a 24 per cent stake in St George Illawarra. WIN TV, however, is not contributing to the ongoing costs of the Dragons.

Some hope Gordon, a 77-year-old Bermuda-based billionaire, might be the joint venture's white knight, following Russell Crowe and Peter Holmes a Court's lead and entertaining private ownership of the team.

But this would put pressure on the St George faction because it is believed Kogarah is not Gordon's most "favourite place in the world".

Leagues Clubs Association of NSW chief executive Peter Turnbull said the traditional model of funding an NRL team had to be examined.

Dragons boss Peter Doust declined to speak to The Sun-Herald yesterday.