Marika Koroibete and Rugby Australia at loggerheads as new broadcast deal bites
Rugby Australia’s new broadcast deal may not leave enough cash to keep stars in Australia as further cutbacks and contract showdowns loom.
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A WhatsApp group among Australian rugby players, titled #Justice4Marika, has been discussing the predicament of the disgruntled Wallabies star who wants out of his contract to play in Japan.
Rugby Australia is not entertaining the thought of releasing Koroibete early – he’s signed until the end of 2021 – which puts in jeopardy a life-changing offer from Japanese club Panasonic Wild Knights worth a guaranteed $3 million over four years.
It is understood Koroibete is currently on a deal worth $550,000 a year.
Koroibete is the reigning John Eales medallist as Australia’s player of the year, and his best-on-ground performance last weekend in the Wallabies’ Bledisloe Cup win over the All Blacks reaffirmed his standing as the best rugby player in the country right now.
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In the #Justice4Marika chat group, others have suggested to Koroibete that he’s doing his chances of an early release no favours by producing such stellar performances.
And rugby officials are staying firm; a contract is a contract.
Even the possibility of Koroibete exploring legal options has not changed RA’s views.
This is much bigger than Koroibete, however.
The obvious way the winger can get out of his Australian contract for next year is if RA ask players to take a further pay cut, having signed a broadcast agreement with Nine Entertainment that domestically is on par with the existing deal, but overall will fall well short of the $57 million a year generated.
If wage cuts are requested, Koroibete and other contracted stars can reject the proposal and sign elsewhere.
But RA is privately confident they will be able to be able to reinstate all players back to full pay from January 1, 2021.
Super Rugby players are on 70 per cent of their full salaries, a concession agreed to during the COVID-19 shutdown, while the Wallabies players returned to full pay at the start of their Bledisloe Cup camp last month.
So, if all of the players are to be paid in full, yet less money is flowing into the game, where will the cuts come?
Already, new RA chief operating officer Adam Foulsham has slashed $15 million in costs by axing staff and streamlining departments.
Yet some within the game are unconvinced this will be enough.
Junior development programs including the under-20s, Super Rugby academies, women’s rugby and Sevens are in the crosshairs.
The NSW Waratahs, who remain $2 million under the $5.5 million salary cap expenditure for 2021, have delayed a strategy meeting until they get a clearer picture of rugby’s financial situation following their broadcast deal, announced as worth $30 million in cash a year for the next three years.
Many have questioned the Waratahs’ lack of big-name signings for next year, with Michael Hooper taking a sabbatical in Japan, Rob Simmons heading to England, Ned Hanigan to Japan and Tom Staniforth to France, while they’ve refused to re-sign Karmichael Hunt and Cam Clark.
“We’ve only got a couple of holes to fill on our roster, we think we’re travelling well, we’re balancing the competing needs of being competitive on the field, and surviving,” Waratahs chairman Roger Davis said.
“Our strategy day was deliberately changed to early December so we could understand the landscape.”
While the other four franchises have spent big on their rosters, NSW will remain ultraconservative in anticipation of belt-tightening across the board.
RA accepted less cash for the broadcast deal than what was offered by existing partners, Network Ten and Fox Sports (owned by News Corp, publisher of The Daily Telegraph).
The theory is that greater exposure on free-to-air television for Super Rugby will offset the difference in cash.
However, Sydney club rugby officials are gravely concerned that most of their games will now be played behind a paywall on Stan Sport, which is to be created next year with rugby and tennis as their two offerings.
What used to be accessible on free-to-air on the Seven network will now only be seen by paying subscribers, limiting the reach of club rugby sponsors who are asking for discounts.
Broadcast insiders say Stan Sport must triple the existing average Super Rugby audience on Fox Sports to break even next year on their investment.
But half the Super Rugby AU games will be available on free-to-air, though speculation is growing the Nine will put those Saturday night games on their less accessible GEM channel.
Wallabies Tests will be shown on the main Nine channel.
So is there a big enough audience willing to pay for a Stan Sport subscription when much of the professional rugby offerings will be available for free?
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When Nine was renegotiating its deal with the NRL this year amid the coronavirus shutdown, and reportedly saved $80 million in the revised agreement, network boss Hugh Marks made it clear that falling ratings made rugby league less valuable.
“It‘s not a given that NRL has to be part of our future,“ Marks said. “It has to just pay its way like all of our content does, and if it doesn’t, well … again, we are less reliant on that as a revenue source.”
That puts enormous pressure on rugby to deliver an audience surge for Nine and subscriber boost for Stan in 2021, as shareholders scrutinise the venture.
NRL officials are unperturbed by the rival code’s arrival on the same free-to-air network, believing the cash component Nine has given rugby is far less than the publicised $30 million annually.
While rugby’s ratings have rapidly diminished in recent years, on Fox and free-to-air on Ten, players like Koroibete – who switched from the NRL in 2017 for a better salary – have kept the faithful engaged.
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