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Big paycuts on cards as ARU seeks salary cap
Josh Rakic
March 13, 2011
THE Australian Rugby Union is set to introduce an NRL-like salary cap to curb player expenditure of more than $30 million, cracking down on third-party payments, and reducing individual player payments by as much as 25 per cent as the code continues to suffer financial pressure.
In a rebuilding phase after hitting rock bottom in 2009, Australian rugby is already resigned to a fall in profits this year due to a restriction on Wallabies' in-bound Tests as a result of the World Cup.
And while television ratings have had a big increase the ARU is following the lead of European competitions in looking to stem the outflow of cash.
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The code's biggest expenditure? Players' wages.
''The game is experiencing some financial difficulties, and as such the ARU is reviewing all of their expenditure items, player salaries included,'' a source said. ''They're looking at introducing an overall salary cap.''
It is widely accepted that players are entitled to 25 to 30 per cent of Australian rugby revenue, but with revenue down significantly, the governing body is looking to slash that share.
The Rugby Union Players' Association is understood to be unhappy with the proposed changes, its members believing if players' wages are to be reduced then so, too, should those of the officials running the game. They want a holistic approach to finances.
While RUPA chief executive Greg Harris refused to be drawn on the topic before discussions with the ARU in coming weeks, he acknowledged the ARU's income was not as strong as five years ago, and said as a result discussions were likely to get heated.
''There are two areas of discussion in which we are looking to engage with the ARU very quickly on - one is the CBA [collective bargaining agreement] and one is the contracting protocol, which they are looking at introducing,'' Harris told The Sun-Herald.
''We're now waiting on the ARU on some advice as to when we are going to discuss things.''
The ARU has been looking to renegotiate the CBA since last year when the existing agreement expired but, due to changes in the RUPA administration and that its members - the players - were on Wallabies duty and then holidays, it is has taken until now for the parties to arrange a meeting.
The CBA stipulates a bottom-line investment in players' salaries per year, which the ARU is looking to reduce before putting a limit on individual player payments, club spending and third-party deals, which would likely also even out competition between the five Australian teams. The Melbourne Rebels are not party to the collective bargaining agreement as they are new to the competition.
While the ARU refused to deny that the implementation of a salary cap and the reduction on player earning limits were being considered, it, too, opted not to weigh into the debate until official negotiations had begun.
''In terms of the CBA, we are keen for the renegotiation to get under way but until we sit down with RUPA we think it'd be inappropriate to go into any detail about what those negotiations will produce,'' an ARU spokesman said. ''We're not going to be pre-empting negotiations. We're not in a position to be talking about that [players' salaries] until all the relevant bodies are involved.''
However, some sources revealed to The Sun-Herald that several teams were already operating under the new protocol - which is believed to involve the central contracting system limiting contract lengths to just two years - although the players' union has yet to come to terms with the governing body.
''The difficulties in re-signing players are the clubs and the ARU are using new contract protocols,'' one source said. ''Obviously they've signed six or so Wallabies in the past month, but if you'd notice they're all two-year deals, and from what I can see they're stripping salaries.
''And if you're going to introduce a salary cap, surely the players' association should be involved in the process? Any football code with a cap - the players' associations have always been involved in negotiations.''
While there is tension over how the ARU is going about its financial evaluation - players believing they are being hard done by if officials' wages aren't also reduced under a holistic review of the body's financial woes - there's little argument it is a necessity for the code to survive and thrive again.
Under existing arrangements, Australian contracted players are largely earning more than their European and New Zealand counterparts - but so, too, are officials.
