Collective Bargaining Agreement

[Brumby Jack]

A new collective bargaining agreement was announced today from RUPA and the ARU.

The major outcomes are:

• Test match payments down from $13,100 to $10,000 from 2014 (Those not on top ups will receive $12,000 per test)
• Salary cap for the Super Rugby teams will be $5 Million
• Players share of gross revenue up from 26% to 29%
• Increase in minimum player salaries for Super Rugby teams

 

[I like to watch]

RUPA have done a good job.

 

[p.Tah]

what was the salary cap previously?

 

[Hawko]

A new collective bargaining agreement was announced today from RUPA and the ARU.

The major outcomes are:

• Test match payments down from $13,100 to $10,000 from 2014 (Those not on top ups will receive $12,000 per test)
• Salary cap for the Super Rugby teams will be $5 Million
• Players share of gross revenue up from 26% to 29%
• Increase in minimum player salaries for Super Rugby teams

Based on that information, the ARU are saving four-fifths of five-eighths of fuck all.

Clearly the stuff Pulver was mouthing only a few days ago was only lip-service. Based on this there is no financial crisis at all, only a very minor downturn in the income stream. Those not on top-ups get a 7.7% paycut. Those on top-ups are hardly affected because the top-ups dwarf the match payments, you'd guess that overall the paycut was about the same as for those on match payments only. It will vary from top-up to top-up, with those on small top-ups hardest hit.

If my back-of-the-envelope calculations are correct the forecast for revenue reductions by the ARU are around 8.5%. A lot of retail outlets have been battling with similar numbers since the GFC and local manufacturing has had it much worse.

There's been an epidemic of hyperbole going around.

 

[I like to watch]

....and increased the players share of the pie from 26 to 29%
As a casual observer with no inside knowledge,it would appear RUPA have pulled his pants down.

 

[Cat_A]

I disagree Hawko - along with the stuff that BJ posted, there are also reduced assembly allowances for training camps and Test matches, and if we go back to the analysis of the ARU finances, I can't recall a lot of outrage or alarm that the players were being paid too much. We also know that ARU top ups are being cut down in number and/or size. From memory there was a LOT of discussion about executive salaries and shockingly high costs from St Leonards - unexplained expenditure not related to the high performance unit I think?

The gist of quotes from players about this over the past week or so seemed to be that they were ok with taking pay cuts if those cuts were also being made throughout the rest of the organisation. I would be shocked if this deal was struck without evidence that ARU HQ were also tightening belts.

I'm pretty excited that women have been recognised in the agreement for the first time so they will be entitled to the same minimum employment standards as the men.

I think overall it's a good deal.

 

[Gagger]

..and increased the players share of the pie from 26 to 29%
As a casual observer with no inside knowledge,it would appear RUPA have pulled his pants down.

That's exactly what we're meant to think.

Something tells me we're missing some devil in the detail

 

[It is what it is]

..and increased the players share of the pie from 26 to 29%
As a casual observer with no inside knowledge,it would appear RUPA have pulled his pants down.

Don't forget that it's a shrinking pie for everyone at the moment and Pulver did clear the decks of expensive staff at the ARU to do his bit.
Like all successful negotiations it was give and take by all parties.
You may find the RUPA "players" numbers might have increased too.

 

[Hawko]

I disagree Hawko - along with the stuff that BJ posted, there are also reduced assembly allowances for training camps and Test matches, and if we go back to the analysis of the ARU finances, I can't recall a lot of outrage or alarm that the players were being paid too much. We also know that ARU top ups are being cut down in number and/or size. From memory there was a LOT of discussion about executive salaries and shockingly high costs from St Leonards - unexplained expenditure not related to the high performance unit I think?

The gist of quotes from players about this over the past week or so seemed to be that they were ok with taking pay cuts if those cuts were also being made throughout the rest of the organisation. I would be shocked if this deal was struck without evidence that ARU HQ were also tightening belts.

I'm pretty excited that women have been recognised in the agreement for the first time so they will be entitled to the same minimum employment standards as the men.

I think overall it's a good deal.

It may well be a good deal, I would not argue that.

My point is that for some weeks now we have heard news of diabolical income forecasts that leave the game totally in tatters. But based on the increase in player payment share of income from 26% to 29% and the player payments going down about 7.7% the drop in income projected is less than 10%. Now its not any fun to be in an organisation under those circumstances (been there, done that) but with income projected to fall less than 10% you just tighten your belt and get on with it. That situation is far different from an organisation/company/whatever being on the brink of bankruptcy. The only way a less-than-10% income reduction forces you into bankruptcy is if you don't take action to reduce costs or if the costs can't be reduced (very high fixed costs or maybe too highly leveraged).

As I said, there's a lot of hyperbole going around. If the share of total income had gone to 40% and wages had been cut 30% then I might believe in doomsday coming. But not on those numbers.

 

[ChargerWA]

We have seen the quality of the ARU's accounting before. You would better off sacrificing a chicken and reading the entrails to work out if this will make any meaningful contribution to the bottom line health.

 

[Cat_A]

Aahhh I think I see your point now. Sorry I misunderstood a bit.

You're looking at it from a "clearly things aren't as bad as we've been led to believe" viewpoint? Is that what you're saying?

 

[TOCC]

what was the salary cap previously?

The Salary Cap was $4.1million in 2012 and $4.5million in 2013... However the ARU Grant remained at $4.1million between 2012/2013 so it'll be interesting to see whether that has increased for 2014.

Furthermore in 2013 clubs had the ability to negotiate third-party contracts up to $500'000 and the EPS Salary Cap was $200'000, so in effect there was a total salary pool of $5.2million negotiable in 2013.

 

[Hawko]

Aahhh I think I see your point now. Sorry I misunderstood a bit.

You're looking at it from a "clearly things aren't as bad as we've been led to believe" viewpoint? Is that what you're saying?

Yep.

 

[TOCC]

I think the point is that under the previous $13'500 grant the player payments were probably exceeding 26% in many years due to falling/fluctuating revenue, by removing $3'500 from match payments it sees a drop in just under $1million annually(dependant on ARU contracted players).

 

[Hawko]

Based on that information, the ARU are saving four-fifths of five-eighths of fuck all.

Clearly the stuff Pulver was mouthing only a few days ago was only lip-service. Based on this there is no financial crisis at all, only a very minor downturn in the income stream. Those not on top-ups get a 7.7% paycut. Those on top-ups are hardly affected because the top-ups dwarf the match payments, you'd guess that overall the paycut was about the same as for those on match payments only. It will vary from top-up to top-up, with those on small top-ups hardest hit.

If my back-of-the-envelope calculations are correct the forecast for revenue reductions by the ARU are around 8.5%. A lot of retail outlets have been battling with similar numbers since the GFC and local manufacturing has had it much worse.

There's been an epidemic of hyperbole going around.

That's exactly what we're meant to think.

Something tells me we're missing some devil in the detail

From the news on the blog today, the new bargaining agreement will save the ARU 12%. My rough calculations say less than 8%. So I think Gagger is right; there are some devils in the detail that have not yet been revealed. Either that or my maths is going downhill at the same rate the rest of me is.

 

[Gagger]

Having had a chat to a few well placed sources - the bones of it is:

Yes, RUPA did cede some money

• about $1m a year on the match payments and per diems when they travel over the next 4 years
• about $3m on the "bonus" RUPA may have been entitled to due to the Lions bonanza this year (this would have been in dispute however)

In return they got

• An increase in the GPR to 29%. This won't increase the amount the players will get in the near future as the pie is shrinking - but if/when the pie grows, so will the players' pot. The trick is that up until now there had been lower limits set in dollars as to what the player GPR could be, and this turned out to be higher than the 26% RUPA had.
• A whole bunch of player payment related issues now placed within the CBA that weren't there before - Salary caps, min wages, Sevens wages, The Rebels, a draft etc. This gives RUPA far more say in the total rugby remuneration picture going forward.

In summary - Pulver got a slight reduction in the total bill and absolute clarity on what the players will cost him over the next 2 years (which he needs because the ARU are arse out). RUPA has taken a bit of a haircut in the short term, but set itself up for when the good times come again, which both parties need to work together to create.

 

[Braveheart81]

One thing I don't understand in the midst of all the cost cutting exercises is why players like Drew Mitchell and Berrick Barnes were made to stay in Australia being paid rather than releasing them early to take up their overseas contracts.

Surely a conversation could have been had with Ewen McKenzie to get his views on how many injuries were required before he was going to pick them and a decision could have been made then.

In hindsight it would appear that neither of those players were ever going to be picked so releasing them early could have saved the ARU some cash.

I don't agree that releasing them early would have set a bad precedent. It would have been a sound decision that benefited all parties.

 

[Hawko]

From the news on the blog today, the new bargaining agreement will save the ARU 12%. My rough calculations say less than 8%. So I think Gagger is right; there are some devils in the detail that have not yet been revealed. Either that or my maths is going downhill at the same rate the rest of me is.

Article in Rugby Heaven (can someone upload the link, please; I can't do it) has more detail and explains some of the discrepancy. One of the things is that the guaranteed $12K per match to players not receiving top-ups doesn't start for two years. For the next two years this portion of the payment is cut 23%, which is a significant amount.

The article is very badly written (or edited) as it is impossible to tell whether the minimum payment to core squad players is $52K or $75K. There are unspecified reductions in the living away from home allowances also.

Certainly based on this article the players have taken a deeper cut than I thought based on the previous information.