NRL concern over the Collective Bargaining Agreement

The National Rugby League has expressed its concern that players had been presented with false information as they prepared for the 2006 Collective Bargaining Agreement discussion.

Former RLPA Chief Executive Tony Butterfield wrote an article last Sunday outlining his assessment of game revenues and expenditure.

It presented the first public insight into how Mr Butterfield had formulated his demands for a $5million salary cap.

The article overstated 2005 revenues, overstated future revenues and understated running costs and expenses (by $37million) while ignoring payments made to ARL Development and the ARL’s grass roots competitions.

“If this has been the basis for his position than it is important that the players know that it is wrong,” NRL Chief Executive Mr David Gallop said today.

“We expect players should share in the success of the game but it has to be based on a realistic set of numbers.

“Figures that we provided to all clubs and players at the annual conference, which Tony attended, have either been ignored or altered to provide an expectation that is simply not achievable.”

Tony Butterfield has asserted that:

“The salary cap had gone backwards in real terms since 1997.”

In real terms in 1998 (there was no cap in ’97) the salary cap was $3.25m dollars, with some notional values, for the top 25 and $500,000 for every other player in the club.

In real terms in 2006 the Salary Cap is ahead of CPI increases when you include the $3.366m for the top 25, a further $200,000 for sponsorship servicing, a further $100,000 for veteran players, a further $100,000 for third party sponsors and the $1million average spend by clubs on players outside the top 25.

“The NRL stated at this year’s conference that it grossed $107m in 2005.”

The NRL stated to clubs, players, Chief Executives and Chairmen at its Annual Conference that the projected gross revenue for 2006 (not 2005) was $107million. Tony has somehow moved the projected 2006 revenue back to 2005 and double counted any increases.

“... the NRL should be forecasting gross revenue of about $145-$150m by 2008 and growing.”

Tony has made a number of miscalculations. His suggestions of gross revenue by 2008 are not supported by current forecasts.

“Beyond that are the yet untapped prospects for broadband, internet, 3G phones ...”

The NRL already receives broadband and 3G rights revenue and does hope to increase this going forward, but to suggest it is a new revenue stream not yet filtering into the game is wrong.

“... it costs about $70m a year to run the game. We know that because the NRL told us.”

In an open room in front of clubs and players (including Tony) at the Annual Conference the NRL demonstrated that it will spend $107m to run the game in 2006. Tony’s figure is out by $37m.

“As part of that the NRL grants $2.5m a year to each club”

The 2006 grant is $2.75 and the 2007 grant has been agreed at $3m.

“Therefore, the new broadcast deal will provide the NRL with a surplus of around $70-80million by 2008.”

Given the inaccuracy of the information used to arrive at this figure it is simply incorrect.

“... you give it to junior clubs who get nothing”

The NRL funds the ARL $8m for representative football and junior development, a further $3.5m goes directly to ARL development from the NRL, and a further $6.5m is budgeted by the NRL partnership this year for extra payments to assist grass roots projects. Furthermore the NRL and Telstra provide a $200,000 assistance fund to support individual clubs to purchase equipment.

“... The grant to clubs should match the salary cap”

On this we agree, indeed we are pleased that Tony has moved away from a previously stated position that the cap should go up regardless of the grant. The NRL believes the gap should first be narrowed and then eliminated. This is part of our strategic plan.

The NRL has met with the RLPA and explained these issues.

“We are talking about important issues for players and for the game at every level as we try and capitalise on the success of 2005,” Mr Gallop said.

“It’s just as important that we plan the way ahead on the basis of facts.”