Collective Bargaining Agreements are the rugby league equivalent of the divorce court: players, clubs and the NRL hate attending the meetings, transparency is questionable and when a “property settlement” is finally reached, all parties harbour hard feelings.
This year’s funding talks to cover the next five years are particularly prickly because the Rugby League Players’ Association and NRL clubs are aligned. Historically, clubs have adopted an Us-versus-Them view, arguing that more for the players means less for the clubs.
After six weeks of futile negotiating, an impasse has been reached, with NRL clubs forced to guess at the size of the 2023 salary cap and make key decisions over their player rosters without knowing how much they have to spend.
Some clubs are budgeting for a cap of $11.5m, an increase on the current cap of $9.3m. NRL clubs separately seek a grant valued at $5m above the cap for their front-of-office expenditure. However, the Australian Rugby League Commission has told both the RLPA and NRL clubs there is no more money from “distributable revenue” – essentially, all income to the central body less contra and government grants.
According to a NRL document entitled Whole of Game – 5Y Financial Model, the NRL proposes a percentage split of distributable revenue of $574.4m in 2023, with the NRL taking 24.8 percent for its operations; participation and pathways allocated 11.6 percent; players 41.6 percent, clubs 17.2 percent and investment 4.8 percent.
The NRL’s proposed operating expenses next year are $142.5m, which is only $8m less than 2019’s $150.9m. Remember when a cast of critics savaged the NRL for its expenditure under the administration of Todd Greenberg? The game’s administration was portrayed as bloated, with executives swanning around in hire cars. Well, the proposed average expenditure at Rugby League Central from 2023-27 is $415,000 per day.
NRL chief executive Andrew Abdo (left) and Peter V’landys are locked in negotiations with the RLPA and clubs.Credit:Dean Sewell
NRL chief executive Andrew Abdo points out that almost all sporting administrations have operating expenses in the 40 percent range, compared to the NRL’s 25 percent. He says the planned level of expenditure over the next five years locks his administration into being the leanest of all the codes.
Furthermore, as it was in 2019, a sizeable proportion of the administration’s expenses are what is called “cost of goods sold” – that is, the expenses involved in delivering revenue. As revenue grows, so does the cost of growing it.
The distributable revenue in the last year of the old NRL administration was $504.1m, meaning Abdo’s office has grown revenue by $70m with decreased expenditure. But this has not placated his opponents, who point to the need to fund an additional club, the Dolphins, and the recent $4.5 billion AFL TV deal.
This is where the “divorce court” hearings are headed when they resume.
Given that broadcasting revenue historically represents about two-thirds of the income to the central administration and, with a stalemate reached in negotiations, both stakeholders are demanding more detail around the seven-year pay-TV deal ARLC chair Peter V’landys negotiated with Foxtel during the Covid pandemic.
It’s what could be called an “undisclosed asset” in the negotiations. V’landys has always maintained the secrecy around the Foxtel deal becomes irrelevant when the clubs and players will receive record deals and add to it when the NRL goes back to broadcasters for the 2028 contract.
The NRL clubs are only $600,000 per club short of their demand, suggesting a deal can’t be far away. (The NRL are entitled to point out that if clubs raised half of all game revenue, as is historically the case in the AFL, they could quickly find that $600,000.)
The RLPA are considerably further away than the clubs from a settlement.
A 41.6 percent share of distributable revenue to players, shared by 17 clubs produces a salary cap of approximately $14m. However, payments to NRLW players must be factored, as well as other RLPA demands such as retirement funds.
One senior player said, “Whatever way you look at it, our average salary will be $150,000 less than AFL players.”
The anticipated average AFL salary will rise to $500,000, but the code has more dependants.
When the funding talks between the NRL and its clubs and players eventually resume, debate will continue on the proposed property settlement but ultimately all comparisons will be made to a wealthy third party – the AFL and its recent mega TV deal.
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