NRL clubs face $100m wage bill amid coronavirus crisis
Rugby league clubs could collapse and die in just eight to 12 weeks if the NRL competition is cancelled as they brace for a loss of television money, gate takings, sponsorships and the need to refund memberships.
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Rugby league clubs could collapse and die in just eight to 12 weeks if the NRL competition is cancelled because of coronavirus, concerned CEOs believe.
And The Daily Telegraph can reveal clubs, facing a financial savaging from playing games in empty stadiums, need to collectively find $100 million to meet player payments for the remainder of this season.
The 16 NRL clubs engaged in a phone hook-up on Sunday morning with ARL Commission chairman Peter V’landys and CEO Todd Greenberg to discuss the “catastrophic” impact coronavirus will have on rugby league.
All clubs are paid about $1.2 million a month from rugby league’s broadcasters Channel 9 and Fox Sports, but both networks can halt payments immediately if matches are postponed or scrapped.
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Round two will proceed next week but V’landys could not guarantee any further matches would be played. There are suggestions if games were postponed then the competition could be extended into October. That could mean the State of Origin series would be shifted and the end-of-season Kangaroo tour would be scrapped.
There is a push to keep playing in empty stadiums to satisfy the broadcast contract and keep money flowing into the game. One option is to base all clubs in one city such as Townsville or Darwin.
But clubs are already bracing for a loss of television money, gate takings, sponsorships and the need to refund memberships.
The NRL will employ a biosecurity and pandemic expert to offer advice, allowing time for the governing body consult further with players and officials.
On Sunday officials at the Sea Eagles-Storm game were disinfecting balls that went into the crowd.
“I can’t stress enough our game has never faced a challenge like this,” V’landys said.
“The longer it takes, the more pressure on our financial viability. It could have catastrophic effects on us going forward.
“Our money will only last so long, and once it’s extinguished we are in big trouble. An Australia without rugby league is not Australia.”
V’landys called for a government bailout of the NRL.
“The government has to assist us in this crisis because it is not of our own doing. Rugby league has been a fabric of our society for hundreds of years. It is people’s escape, it is people’s relaxation.
“And we have to do everything we can to continue the tradition of rugby league.”
He said the NRL would review all its options including isolating players and suspending the season.
“Any decision we make today may change tomorrow. This situation is fluid and is changing by the hour,” he said.
One CEO claimed clubs could survive for only two or three months if matches were abandoned.
“If player wages don’t change and there isn’t any revenue coming in, it would be a matter of weeks — eight to 12 weeks. You can’t keep paying $13 million in wages to players if you don’t have revenue coming in,” he said.
“If you stopped the broadcast money, refunded membership and (factored in) loss of gate takings, hospitality and sponsorship, clubs would only survive a few weeks. Reimbursing membership would cost the game millions of collars. It is dire if you take out all your revenue streams out.”
To help initial financial costs, the NRL on Sunday issued each club with $425,000 from a “distress fund” which contains $6.8 million. A $30 million profit from last year wouldn’t last long, according to officials.
“If one club goes down, we’re all f … ed because the broadcast deal states we have to play eight games a week,” said one senior official.
“It’s scary for all of us. Lots of businesses will collapse.”
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V’landys will lobby the federal government for emergency funding with suggestions that figure needed could be around $200 million. Clubs have already paid players for five months of rugby league’s financial year, which started at the end of October. That would leave around $100 million for the rest of the year — a figure that does not include staff wages.
“The game doesn’t have $100 million — the only way that could be paid was if the government stepped in,” said one official.
Players may be forced to shoulder some financial burden with the game’s salary cap expected to be reduced.
With New Zealand’s government imposing a 14-day quarantine on anyone arriving in the country, the NZ Warriors have relocated to Kingscliff for a week to prepare for their home game against Canberra, which will now be played on the Gold Coast.
Lower grade games in round two won’t be played.
“We will pray and hope we play round two and then we will pray and hope we play round three,” said one Sydney chief executive.
“It’s simple – if there’s no games then the broadcasters don’t pay then footballers don’t get paid. And they all have contracts.”
Officials fear traditional Leagues Club grants may also be slashed if trade decreases. Sponsors could also walk away through lack of exposure while football club staff are being told to take holidays.
Clubs are wondering whether to quarantine players – or even the team bus – before matches next weekend and whether hotel rooms will be cleaned to the necessary standard.
Former NRL boss David Gallop said it appeared certain that NRL games would be suspended.
“I think it’s inevitable we’re going to see games stopped,” Gallop said on Sports Sunday.