NRL threatens payback as bad boys could shrink cap

Players have been warned that even the slightest dip in NRL or club revenue could result in an instant reduction in the salary cap.

Jarryd Hayne returns to court this week in what shapes as another bad period for the game.

Player behaviour remains at the top of the agenda as NRL club bosses prepare to meet in Melbourne this Friday, the culmination of what promises to be another hellish week for the code marked by court appearances and looming sanctions against players and clubs. Players have already been put on notice that their bad behaviour may ultimately hit them in the hip pocket and The Australian can now reveal that under the agreement struck between the union and head office nearly 18 months ago, even the slightest dip in NRL or club revenue could result in an instant reduction in the salary cap.

The term sheet agreed between the NRL and players in October 2017 — remarkably, the long-form agreement is yet to be completed — included a clause contemplating “adverse changes” in the game’s financial state.

The document, sent by NRL chief executive Todd Greenberg to his players’ union counterpart Ian Prendergast and subsequently obtained by The Australian, forms the basis of the collective bargaining agreement and discusses the implications of any drop in revenue and the subsequent impact for player payments.

The agreement talks about a range of financial scenarios and mechanisms for revising player payments, the starting point if there is a $10 million reduction in NRL revenues in any one year compared with initial forecasts. NRL revenues this year are projected to exceed $500m, meaning a two per cent dip would bring the clause into effect and jeopardise existing player payments.

The term sheet also contemplates a $15m reduction in combined NRL and club revenues or a $10m reduction in the NRL’s operating surplus. Furthermore, it talks about a $20m reduction in combined NRL and club revenues due to a force majeure event — more commonly known as an Act of God. Among the events contemplated are player litigation, club bankruptcy or loss of sponsors.

It is understood sponsors at both the NRL and clubs have raised concerns over the spate of off-field issues that have dragged the code through the mud.

There seems every chance that unless players begin to toe the line, sponsors will walk away. That would have dire consequences for the code and the pay packets of the players given they have agreed to wear their share of fiscal responsibility if the game’s bottom line goes backwards.

There also remains concerns over Cronulla’s long-term financial security, although it is understood they have convinced the ARL Commission of their ability to survive another 12 months with the help of a boutique bank. Their future beyond that is contingent on the deal involving the land surrounding their base in Sydney’s southern shire.

In the event that the game’s revenue takes a hit, the “adverse changes” clause dictates that a good faith discussion can be held over the “quantum and application of downward revisions”. Should the NRL and union fail to reach an agreement, the parties would be guided by a third-party decision or potentially terminate the CBA.

Revelations of the “adverse changes” clause only heighten the stakes as the code grapples with its public image in the wake of a disastrous off-season. The bad publicity is unlikely to slow down this week given former Parramatta and NSW star Jarryd Hayne and St George Illawarra and Blues forward Jack de Belin are both due to front court this week on assault charges. Hayne is still without a contract for this season and his cause hasn’t been helped by the court case that hangs over his head. Both he and De Belin have proclaimed their innocence.

The NRL is believed to be close to reaching a decision on any potential sanctions against North Queensland forward Scott Bolton, who was handed a 12-month good behaviour bond by the courts after pleading guilty to common assault last month.

The Cowboys and the NRL were waiting on a transcript of the court proceedings but the expectation is that a decision could come as early as this week. Like Canterbury in relation to Dylan Napa and the ongoing investigation into leaked videos involving the Bulldogs enforcer on social media, the Cowboys will take a keen interest in the NRL’s handling of Bolton given their belief that his actions were at the lower end of the scale.