The NRL has long resisted the idea of an annual tax for the first time since the introduction of the franchise fee.
That means a new franchise fee is the only thing on the table that the NRL can now use as a tool to impose new taxes on the game.
In a new report, the sport’s revenue and expenditure management body has put forward a range of proposals to reform the current tax regime.
The NRL’s chief revenue officer Andrew Pivac says the new revenue and spending management framework would be designed to support the organisation’s long-term goals.
But the proposals are likely to come in for criticism from players and fans, and are likely for a while to be left to the AFL, NRL and State Government.
The key proposal is a 1.5 per cent levy on all NRL games revenue, with the rest of the money going towards the AFL and State governments’ gambling policies.
The first report from the NRL’s revenue management team has been published and it’s clear the changes are designed to address some of the major issues players have with the current taxation system.
The proposed changes include a new $250,000 annual levy on players and $75,000 for teams, to be paid out to players and their families.
There’s also a proposed $50,000 levy on clubs, to fund the NRL clubs’ sports science program.
The biggest proposal is the removal of the 10 per cent GST rate for clubs and a 10 per of the league’s revenue to be allocated to the State governments.
The changes also include a tax rate of 10 per per cent for the NRL on all players and the remaining $50 million being allocated to support state government and sporting development programs.
A separate $50m levy for the AFL’s GWS and Essendon would also be introduced.
The report recommends a 10-year period for any revenue and a new tax on the value of players’ merchandise to be introduced by the end of 2019.
This would be the last time the NRL would have to pay an annual fee for the sport, and would come into effect if the AFL can’t get its $1.5 billion stadium deal in place by 2019.
Pivac also said the new levy would apply to any club that is owned by the AFL or the NRL, and has more than $1 billion in assets, including a $50million shareholding.
The recommendations include a $1,000 per season cap on players, which would be enforced across all clubs.
Players and their family members would be able to purchase merchandise with up to $10,000 in disposable income.
This is something that has not been considered by any other major sports leagues, and it could see the NRL go from paying a tax of $1 to $2 a match to $1 per game.
The other major recommendation is the abolition of the $1 million salary cap.
This could see a return to the current cap of $6.2 million a season, but it could be adjusted by a player to be fair.
This was the only proposal from the report that made it into the final report, with no suggestion the cap should be raised, or that it should be abolished entirely.
It also suggested the NRL could use the revenue from the existing $1m cap to fund state and national health programs, and a $150,000 contribution to the Victorian Government’s sports science programme.
This proposal was included in the NRL report but was not included in any of the proposals from the revenue management teams.
The revenue management reports also proposed a change to the way players are taxed on the first $1million they make, from $3,500 a year to $3.50 a match.
Players who make $1-million a year would pay $100 a year.
Players with an average of $50 a week would pay a flat $100, and players who earn more than that would pay an increase to $5 a match or $2.50 per match.
There were no proposals from other sports organisations to include a change in the first-time salary cap, and this is the first step towards the introduction, or abolition, of the salary cap across the NRL.PIVAC says the revenue and investment management framework is the result of a thorough assessment of the current system, and the way it was established over the last 15 years.
“The NRL understands that revenue and expenditures are a key part of our business model, and that we need to change that.”
We need to get the ball rolling with our new revenue, expenditure and revenue management framework to achieve our long- term goal of improving our competitive balance, providing long-lasting value for the community and delivering greater sustainability for the game.”NRL clubs have already made changes to the existing structure in the last year.
The Gold Coast Titans have dropped the cap to $6 million and changed their salary structure to a $10 million salary pool.
The St George Illawarra Dragons have dropped their salary cap from $7