Rugby Australia has moved to ring-fence key Wallabies in its latest interim pay deal with the players, but it is hardly an equitable arrangement for the vast majority of Australia’s professional players, which may create friction in the ranks.
After taking pay cuts earlier in the year to help the game survive the financial impact of the coronavirus pandemic, the Wallabies have returned to full pay in a new deal negotiated by RA and the Rugby Union Players Association.
The return to full pay only covers the 44 Wallabies who are in New Zealand preparing for the first Bledisloe Cup Test against the All Blacks on 11 October. The remainder of Australia’s professional players will be asked to take 30% pay cuts.
The Wallabies have generously offered to donate their match payments and bonuses to their non-Test colleagues. Potentially, that could amount to a lot of money, maybe up to $1.5m, but it is likely it would still only lift the Super Rugby players’ salaries to 80 to 85% of their contracts.
RA argued the deal reflected the fact Super Rugby players’ commitments have finished for the year, while the Wallabies were about to play in the Bledisloe Cup series and the Rugby Championship. But this was already factored into to their original contracts, including Wallabies top-ups, which most Super Rugby players do not receive.
The Super Rugby players are also about to start pre-season training, which for many teams and players is the most important time of the year. A 20% pay cut across the board would have been a fairer outcome, but it may have had unpalatable consequences for RA.
If RA had not agreed to pay the Wallabies the full amount of their contracts, the deals would have become null and void and players would have been free to join rich clubs in Europe and Japan, while the non-Test players probably have nowhere else to go at this time.
It is understood at least one high-profile Wallabies player was set to leave if RA did not pay the full amount of his contract and there was likely to be more players in that situation. RA desperately needs a competitive Wallabies team to make any money at all for the game.
So from RA’s perspective the new interim pay deal was a smart play, but it is only a short-term fix. There is the danger down the road of narrowing Australia’s player base, which will already be stretched by the commitment to field five Super Rugby teams next year.
While RA has agreed to pay the Wallabies 100% of their salaries, the question is where is the money coming from? There was speculation RA would have been in serious financial trouble if the Bledisloe Cup and the Rugby Championship did not go ahead because of Covid-19.
While RA has to share the broadcast and gate revenue generated by the Rugby Championship with its Sanzaar partners, it is expected to receive a $10m to $12m fee from the NSW government for hosting the tournament.
Assuming the Rugby Championship goes ahead as planned and there are no Covid-19 outbreaks or boycotts, that will help RA get through the next three months financially, but from 1 January all of Australia’s professional players – Wallabies and non-Wallabies – will be entitled to full pay.
Twelve weeks out from that date and RA still does not have a broadcast deal or a Super Rugby competition organised for next year. The current wages bill for Australian rugby is believed to be around $30m to $33m, although it might be a little less than that because of the deliberate financial strategy of signing promising younger players to lower contracts.
How will Rugby Australia continue to pay that full amount? There are rumours long-time broadcast partner Fox Sports has lost interest in Australian rugby or simply cannot afford it any longer. If RA renews with Fox it will probably be for a bargain basement price. Amazon may bid for the broadcast rights, but there has been no indication of what they might be prepared to pay.
The only free-to-air television network which has shown any interest in broadcasting the Wallabies Tests next year is current partner Network Ten, which pays RA $3.5m a year, but it has been reported this week that Ten wants a $1m annual reduction in its broadcast fee, bringing it down to $2.5m a year. That will not feed a hungry front-row.
Also, RA has lost long-time naming rights sponsor Qantas, whose deal was worth $5m a year, in the midst of the coronavirus-induced recession. There was talk Andrew Forrest’s Fortescue Metals Group will replace Qantas, but that has been denied.
No doubt RA has the best of intentions to pay players 100% of their salaries next year, but at the moment it is only that, an intention. If RA cannot pay 100%, not only will the Super Rugby base possibly erode, but more and more Wallabies will jump the ringed fence.