NRL 2020: Players query prospect of 40 per cent salary cap slash
With suggestions the salary cap could be slashed by 40 per cent next year ringing in their ears, the RLPA has called any changes to the 2021 competition ‘premature’ as the NRL said it would be a ‘last resort’.
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RLPA boss Clint Newton says there is no reason to rush through slashing next year’s salary cap amid suggestions the cap could drop by as much as 40 per cent.
ARL Commission chairman Peter V’landys said making further wounds to players’ pay would be a “last resort” as he oversees a drastic cost-cutting measure in the NRL’s head office.
While the players are in the midst of agreeing to a whopping 72 per cent pay cut for the rest of the year, they could be hit further in the hip pocket if the salary cap is dropped.
Club bosses have floated the potential for a 20 per cent fall in player payments next year and beyond but some have suggested that figure could be as high as 40 per cent.
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Players stand to earn $9.9 million next year per club with that number rising to $10 million in the final year of the collective-bargaining agreement.
The salary cap has doubled over the past decade on the back of broadcast money, with the 2010 cap just $4.1 million per club.
A 40 per cent cut next year would take the salary cap from $9.9 million to $5.94 million. That would save a total of $63.36 million across the 16 clubs.
Newton said it was premature to suggest players’ wages needed to come down next year but understood the game’s revenue may take a hit from this year’s events which could impact player salaries.
“The most important thing right now is the broadcast agreement is secured,” Newton said. “Next year hasn’t been impacted at the moment. We know about 65 per cent of the game’s revenue is generated through broadcast. We know there may be a downturn in additional revenues through sponsorship and whatnot. As far as the whole amount is concerned we need to have a good understanding about what’s coming in.
“The most important part is once we secure the (current) agreement is working through with the stakeholder groups – the clubs, the NRL, players and the states – about a whole costing model.
“That’s the most important thing we will work through from here moving forward. There’s a good opportunity to deconstruct the current model.
“We’ve been guaranteed a seat at the table. We want to protect what’s currently in place and work through it.”
Chairman Peter V’landys wants to avoid another cut in players pay next season and beyond.
“I’m not saying the salary cap next year will be cut because I want the players to be last affected,” V’landys said.
“I can’t ask for more than what the players have given the game and I want to support them. If we can save expenses, then there may be no need to slash player wages next year.
“In my view, I want to back the players. It may happen that yes we do have to reduce the cap, but that will be last resort for me.
“I don’t want to alarm the players and have them thinking they will lose more money next year.
“My preference is to cut expenses at the ARL and NRL … and that’s what I’ll be doing.”
The RLPA was yet to officially agree to the NRL’s proposal for player cuts this season put to them on Monday. They are seeking further information around the distribution of retirement accounts and clarity around the potential for revenue share if the game’s forecasts change for the rest of the season. The parties could agree as early as Wednesday morning.
‘Pray we start playing in August or September’
BY DEAN RITCHIE
It could now be a September to remember.
Allaying fears of imminent financial collapse, NRL clubs now claim they can survive another six months — just in time, they pray, for the footy to start.
A $2.5 million payment from the NRL to all 16 clubs on Monday has turned their concern into hope — even optimism — that they can hang on financially until September.
It appears the clubs are at least safe in the short-term.
“It’s now a matter of holding on,” one NRL CEO said.
“It’s about survival mode and then we pray to God we start playing footy in August or September.”
With prudent spending and continuing cost cuts, officials are adamant they can end fears that several clubs may be pushed into insolvency.
The NRL’s $2.5 million gift covers the club’s monthly grant ($1.185 million) over four months minus player payments, about $900,000 a month.
“It’s the gap clubs now have to run the rest of their business,” another chief executive said.
Carefully spending will be the order of the day.
“It gives us a $2.5 million buffer,” one club CEO said.
“If clubs are diligent, and if they continue ways of stopping expense, whether that’s stopping services that are no longer required, trying to reduce costs, then the money can last, probably closer to six months.
“We are all thinking and hoping the money can last until the resumption of the season.
“Every club is different. Some have money in the bank. But we at least all know now what we are dealing with. We now know what we can go back to our boards and ask for.”
The financial boost comes from existing broadcast money and cash the NRL had in reserve.
“It’s a good result, all clubs are happy,” one CEO said. “It gives us a chance to recover and keep going. It will keep everybody alive for four to six months.”
Clubs are still worried that the money will run out if the competition doesn’t get up and running this year.
They fear one or two clubs could go under.
“There isn’t any additional broadcast money and the NRL’s cash reserves are diminishing significantly,’’ one official said.
“The money is there for now but if there isn’t any footy this season, things will get dire.
“How will clubs raise revenue? There won’t be anything left.
“We just have to play this year — it could mean life or death for some clubs.
“If there’s no money left then there’s no money left. We’re OK for now but let’s all pray the footy is back this year.”