New Zealand Rugby will freeze half of its forecast player spend for the remainder of the year with professional players to take significant pay cuts as a result.
NZR and the New Zealand Rugby Players Association announced their plans on Thursday to freeze half of their player spend overall, an amount roughly equating to $NZ25 million.
The New Zealand body is forecasting losses in the hundreds of millions in the event no rugby is played for the rest of 2020.
Already this year's July Tests are in major doubt and it is not clear what pandemic restrictions will mean for international rugby further down the track.
As part of that freeze, players earning more than $NZR50,000 in salary will have 15 per cent freezes on their base retainers starting on May 1, with that amount rising to 30 per cent beyond September.
The deal covers the All Blacks, Super Rugby players, national Sevens players and the Black Ferns, with provincial contracts going through a separate process.
Outside of player salaries, New Zealand Rugby is freezing team assembly and tournament fees for all teams bar the Black Ferns.
Contributions to the players' retirement fund, outside New Zealand's superannuation scheme KiwiSaver, will be frozen as well.
Player appearance fees and the majority of performance incentives are also set to be frozen.
New Zealand Rugby is forecasting a huge loss in revenue should no rugby be played but should financial conditions improve, freezes across the board could be reviewed.
"Like most businesses, people are your greatest asset, and our staff and players are most certainly our number one priority," NZR chief executive Mark Robinson said.
"We wanted to come up with solutions that worked for all our players and ensured that all sectors of our game were sharing in the financial pain we are currently enduring.”
NZRPA Chief Executive Rob Nichol said the plan was conceived with the outlook that no professional rugby would be played in 2020.
"The players are committed to playing their part in ensuring the long-term future of the sport and to ensure the game best manages the financial implications of Covid-19," he said.
“In contemplating a scenario based on no professional rugby in 2020, NZR and the NZRPA together recognised the need to act now to prepare the game and the players for this, even if there is every intention of doing all we can to avoid it.
“As a result, we have agreed to immediately freeze approximately $25 million, or 50 percent, of the remaining forecasted player spend in 2020.
“In the event that this financial scenario eventuates, the frozen payments and benefits would become waived permanently.
"Alternatively, if professional rugby can resume and the financial outlook improves, then some of the frozen payments and benefits could be reinstated."
Nichol said the time it took to finalise the plan was in large part due to the difficulties of ensuring that it was fair for players across the board.
"Our payment model is complex and it has taken time to determine a model that treats all players equitably," he said.
"The model we have agreed protects those on retainers of less than $50,000. While not all players are being treated exactly the same, we felt these changes were the fairest way to address player payments and benefits, considering all the different ways our players are remunerated.”
New Zealand's announcement on Thursday follows the organisation's decision to cut salaries in their administration staff by 20 per cent.
