NRL players may share cost burden of COVID-19
Players may be forced to carry some of the financial burden for the coronavirus under an agreement with the NRL.
Players may be forced to carry some of the financial burden for the coronavirus under an agreement with the NRL that allows the game to negotiate a reduction in the salary cap if COVID-19 has the devastating impact that has been widely predicted.
The Australian has obtained the term sheet that was negotiated between the NRL and the Rugby League Players Association in late-2017, the document eventually forming the basis for the collective bargaining agreement between the game and the players.
The agreement includes an adverse changes clause – otherwise known as an act of God clause – that comes into effect in the event of extraordinary circumstances that lead to a significant reduction in the revenue of the clubs or the game itself.
Under the relevant clause in the term sheet, the salary cap would be subject to a downward revision if there is a $10 million reduction in NRL revenues in any one year compared to initial forecasts.
The same applies to a $15 million reduction in NRL and club revenues, or. $20 million reduction in any one year due to a force majeure, also known as ‘act of God’.
The term sheet contemplates club bankruptcy, broadcaster insolvency, loss of sponsors or a natural disaster – the spread of COVID-19 would no doubt fall into this category.
Alternatively, the agreement contemplates a $30 million reduction in revenue over the term of the agreement – it runs from 2018-2022 – due to an act of God.
“Each of these scenarios will result in good faith discussions between the parties over the quantum and application of downward revisions …” the term sheet reads.
The game is bracing for financial devastation as games go into lockdown from Monday. ARL Commission chair Peter V’landys has warned the financial damage could be measured in the tens of millions, which would potentially bring the act of God clause into effect.
The commission is considering a range of measures to mitigate the damage caused by the coronavirus, including the prospect of moving all the teams to one city and playing all games out of the venue.
The theory is that by housing the players in one place, you can cocoon them from the virus and potentially prevent a player falling foul of the disease.
The game has already survived one scare after Cronulla centre Bronson Xerri underwent tests for COVID-19. The Sharks released a statement this morning confirming he had been given the all-clear.
“After presenting with flu-like symptoms on Thursday, in following full precautionary measures Xerri underwent the COVID-19 test in accordance with NRL and health authority protocols,” the Sharks said.
“No other Sharks player has been tested for the virus.”
The players union has vowed to work in conjunction with the NRL as they look to ensure the games go on – the alternative would be devastating for the game and the clubs.
Already, playing behind locked doors is likely to cost the clubs a combined $4 million each weekend.
“The RLPA has been in close contact with the NRL regarding its approach to COVID-19,” union chief executive Ian Prendergast said.
“The NRL has satisfies itself that the matches being played this weekend will not expose players to an unreasonable risk of catching the virus.
“As things are changing rapidly, we will continue to collaborate with the NRL to ensure our members remain informed of the steps being taken to protect their health and safety.”
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