Rugby League

AFL clubs feeling the pinch, act to mitigate costs of COVID-19

AFL clubs are already taking action to protect against the financial hit they will take from the coronavirus, with West Coast making their recruiting staff take annual leave.

With no state league or junior competition playing for at least a month, the Eagles have put their recruiters, and some other staff, on compulsory annual leave.

It is unknown whether other clubs are taking similar steps but all are bracing for a significant financial hit from the virus, with no crowds attending games and the season cut to a likely 17-rounds.

The Eagles are the wealthiest club in the competition, having recorded a profit last year of $22 million on total revenues of more than $100 million. The purpose of the the Eagles' forced leave is to preserve jobs rather than laying people off.

The virus is likely to force a restructure of AFL clubs and costs within them longer term, with clubs acknowledging it will take years to recoup losses that will flow from reduced revenues flowing into the game this year.

Where player contracts stand, with the push for 20 per cent wage cuts, remains unclear, as players enter a tripartite contract with their club and the AFL.

There are no provisions in the standard player contract that recognise the collective bargaining agreement or the percentage of AFL revenues underpinning the player contract.

There is a recital in the standard player contract that says: "the success of the AFL in conducting the competition is fundamental to the success of the AFL club and the AFL club's capacity to meet the reasonable demands of its players."

Players are likely to accept a pay cut, but will want to wait until the end of the year when all revenues coming into the game are clear.

One problem in applying a 20 per cent cut to salaries this year is the wide discrepancy in earnings between players. Also, some players with front or back-ended contracts that have larger amounts being paid in this year – done to help the club with their salary cap – would pay a disproportionately greater price than other players.

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