NRL chief executive Todd Greenberg has confirmed the game has a 'material adverse change provision' in players' contracts that could affect salaries in a catastrophic situation.
Continuing the competition without crowds in round two, and faced with the potential shut down of the competition due to the coronavirus pandemic, the NRL is staring at a financial black hole and is desperately working to avoid it.
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Greenberg has already revealed that the league has begun exploring ways of continuing this year's season without the Warriors, whose side is currently in northern NSW preparing for their round-two match against Canberra.
With travel restrictions in New Zealand, Warriors have yet to commit to staying in Australia post-game, raising concerns about their possible exclusion for the rest of the season.
Both New Zealand and Australian governments have required all international arrivals to self-quarantine for at least a fortnight due to the coronavirus.
The NRL has also already begun looking into cutting costs in the central administration, and while renegotiating with the Rugby League Players Association (RLPA) over contracts is still a way off, Greenberg admitted it is an option.
"Let me be really clear. No one is saying at the moment that players are taking pay cuts. That's not what we're saying," he told media on Monday.
"What we're saying is, in the funding agreements with every constituent in the game, when the revenues drop there's an ability for us to renegotiate some of those deals.
"We're not suggesting at the moment that's what we're doing, we're saying that's what's in our contracts.
"Of course everyone's looking to tighten their belt. We are looking in the central administration where we can stop costs, save costs, and we're doing all of those things as you would expect, and as I would expect all 16 clubs would be doing right now too."
On Sunday the RLPA confirmed to AAP that the extraordinary measure would only be eligible to come into effect in 2021, and only after other costs to players, such as marketing payments and injury-hardship funds, were cut.
The provision exists under the collective-bargaining agreement with the RLPA that was formed in 2017.
Greenberg said it would allow the NRL to renegotiate the salary cap if - as is likely if competition is suspended for an extended period - revenues drop significantly.
It would effectively force players to take a pay cut as equal partners in the game.
"Potentially. It may be that in any industry where your revenues don't exceed your costs, you have to have another look at how those costs are fixed," Greenberg said.
Phil Gould slams NRL bosses over coronavirus
Gus Gould has questioned NRL’s bosses after Todd Greenberg and ARLC chairman Peter V’landys said the game would be in dire straights if the NRL season is cancelled due to the coronavirus.
On Sunday, the NRL confirmed it would forge ahead with the competition in round two in the interest of keeping the game alive financially despite the growing pandemic which has forced the shut down of other major sports.
Without insurance or assets to produce income outside of the games themselves, ARLC chairman Peter V'landys said the NRL would not take long to collapse if the season was suspended without financial assistance from the government.
But Gould has blasted the NRL after pointing out the game was supposed to be saving money for a ‘rainy day’.
“When the ARL Commission was first formed in 2012, Commission member Gary Pemberton stressed to all that $50m per year should be banked in a future fund, for a rainy day,” he tweeted.
“By 2020 we should have at least $450m in reserve. It’s now pouring rain. How much is there in the future fund?”
Gould then expanded on the Today show on Monday after claiming the NRL needed to shut down the game and reflect on why the code is so vulnerable.
“The fact that it could cause such financial hardship to our clubs and to our game, I don’t think is an excuse enough to be separated from what the rest of society is doing,” he said.
“It’s going to have them look at the whole financial model and philosophy of the governing body in our code,” he added.
“We’ve got to learn from what we’ve done in the past and ask ourselves why we are so vulnerable as a code right at the moment because we have to close down for a season. It shouldn’t be that way.”
With Yahoo Sport Staff