The NRL are set to save $80 million a year in the biggest and most important cost overhaul in the game’s history.
The Sydney Morning Herald reports the Australian Rugby League Commission met on Thursday to create a financial strategy to ensure the game survives the impact of COVID-19.
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Shockwaves were sent through the rugby league community when it was revealed in March that the governing body had spent $181 million in the past financial year, equalling $500,000 a day in operating costs, to run the competition, finals series and State of Origin series.
When the season was suspended due to the pandemic, ARLC chair Peter V’landys revealed just how unviable the game was, saying there would be “catastrophic” financial impacts if the competition couldn’t resume.
Now, V’landys says the NRL is “not mucking around” in an overhaul of the cost structure which will change things for clubs, but will mostly affect head office.
The Herald reports the commission and interim CEO Andrew Abdo are aiming to cut spending to less than $100 million a year, which would save the game more than $200,00 a day.
“There will be considerable cost savings. It will be substantial; we’re not mucking around on the edges,” V’landys told the Herald.
“What the board and the game needs to understand is that this is a once-in-a-generation chance to get your cost structure right.
“What COVID-19 has proven to us is that the cost structure isn’t right. The clubs were making accumulated losses of $33 million per year. That’s not sustainable.
“We need to make sure that we run the game viably, so the days of spending and spending and spending are well gone.
“You won’t attack every problem by throwing money at it; you have to come up with better strategies.
“That’s what the game has done (previously), it has looked at itself and thrown money at it and hope it fixes itself. Sometimes the return didn’t eventuate, even though they threw a lot of money into it because what they wanted didn’t come to fruition.”
While spending will be pulled back across the board, V’landys is confident fans won’t notice any difference in the output. In fact, he isn’t referring to the restructured budget as cost cutting, instead it’s better efficiency, “doing the same thing for a lesser price.”
It’s expected the $9.9 million salary cap for 2021 will be decreased slightly and the $6.17 million a year football department cap will be slashed to $5 million. But the game will save the most from changes at Rugby League Central.
“(Spending) has to come down substantially, there’s not two ways about it.
“Andrew Abdo is doing an excellent job in identifying the areas we can do immediately and other areas we can do gradually.
“But no one will notice the difference. The services will be the same. We don’t regard it as cost cutting, we regard it as being efficient – doing the same thing for a lesser price.
“The fans won’t notice any difference. What our aim is with all the changes is that nobody notices any changes other than an improvement in the entertainment value of the game.
“Nobody will notice any difference because we will get the same output for a much lesser price.”