NRL clubs and players are at odds with a proposal for head office to keep a $120 million investment bucket over the duration of the next broadcast rights deal in a move designed to protect the game.
The plan has proved a major stumbling block in protracted collective bargaining agreement negotiations, which means clarity around issues such as the salary cap are still yet to be resolved despite the new contracting period being just six weeks away.
Just months after the NRL quietly bought Brisbane’s Gambaro Hotel on Caxton Street to add an asset to the game’s balance sheet, Australian Rugby League Commission boss Peter V’landys is intent on generating further revenue away from standard operations.
According to sources speaking on the condition of anonymity given they are not allowed to discuss the matter publicly, the NRL has flagged banking a figure of almost $25 million per year to be invested potentially outside rugby league.
It would amount to more than between $120 million across the five years of the next broadcast cycle, which is due to run until 2027.
“What COVID highlighted is if we needed to borrow money, we had no assets to secure it against,” V’landys said.
Australian Rugby League Commission chairman Peter V’landys.Credit:NRL Photos
“It’s important in any commercial organisation to have assets, and in particular assets which produce revenue outside your normal business. If something happens to rugby league, we can keep getting revenues from other sources.
“Our goal is for the game to have assets so if it runs into trouble, it has something to fall back on.”
The NRL has flexed significant financial muscle despite suffering through two COVID-interrupted seasons in 2020 and 2021, posting a $43 million surplus for their last financial term, and returning record club grants.
But clubs have asked for clarity over the value of the code’s broadcast rights, which will be held by Nine Entertainment Co, the publisher of this masthead, and Foxtel, which struck an extended deal with V’landys in the early months of the pandemic when the 2020 season was suspended.
Latrell Mitchell and the game’s stars are still waiting on next year’s salary cap.Credit:Getty Images
Those agreements are now firmly in the spotlight after the AFL announced a $4.5 billion television deal with Seven and Foxtel to run from 2025-31, which dwarves the NRL’s agreement starting next year.
The NRL is yet to disclose the value of the Foxtel component of the deal, citing commercially confident terms, but several sources have insisted the NRL’s total rights package is about $400 million per year from 2023.
V’landys told the Herald last week “we have a few tricks up our sleeve” with the broadcast rights, and the NRL still has four years to negotiate with its rights to align with AFL until the end of 2031.
While some clubs wouldn’t be opposed to the NRL increasing its asset base, they are debating the amount that should be used to underpin it, and whether it would be better returned to stakeholders.
The development comes as the NRL weighs in on a stoush between players and their managers, with the former set to collect a bonus $38.5 million “outperformance payment” without having to pay a commission to their agents.
The Herald revealed on Tuesday that a consortium of player agents were pushing to claw back $2.5 million in bonus payments granted to their clients for growing the game.
Under the terms of the collective bargaining agreement struck between the NRL and the Rugby League Players’ Association (RLPA), the players share in any significant upside or downside in the game’s finances and were entitled to a dividend after the game emerged from COVID in better financial shape than originally forecast.
The player agents association (RLPAA) wants a commission from the bonus payments to players which, given most traditionally charge 6.5 per cent, would take about $2.5 million from their collective pockets.
However, in a fresh memo from the RLPA to its members – obtained by the Herald – it appears head office has sided with the players, who will get the funds in their next pay cycle.
“We have also made progress in relation to the agent fees issue and we will communicate to clubs that, in our view [and supported by the NRL’s statement of position], the payment is not a playing fee and therefore there is no requirement for agent fees to be deducted by clubs,” the RLPA letter states.
“That means all players will only have tax and superannuation deducted from your gross payment.
“As we have consistently said, once you receive the payment it is up to you if you want to agree to pay something to your agent – that is a private contractual matter between you and your agent.
“Our view is that payment is not required given the payment is not a playing fee. If you want to discuss this with us, please don’t hesitate to contact us for support and advice.”
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